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ESS DEE ALUMINIUM
UNRATED (RS427, MCAP: RS13.7BN / US$303.6M)
• Ess Dee Aluminium Ltd. (EDAL) is India’s premier manufacturer of aluminium foil and foil products catering to the
pharmaceutical and FMCG sectors. It derives 70% of its revenues from the pharma sector and the rest from FMCG.
• Revenues and EBITDA witnessed 64% and 35% CAGR over the past four years on the back of aggressive capacity
additions (acquired India Foils Ltd. recently) and buoyant offtake from end-user industries (given limited competition
in domestic markets).
• EDAL’s product range can be broadly classified into aluminum-foil-based flexible packaging laminates and PVCbased
thermo forming products, including aluminium strip foil, blister pack foil, PVC and PVdC coated film,
laminates and cold forming Alu-Alu packaging products. The company supplies these products to various reputed
domestic and international pharmaceutical and FMCG companies based in India.
• Raw material costs account for 86% of EDAL's revenues. EDAL imports aluminium from the Gulf Aluminium Rolling
Mill Co in Bahrain every quarter at market prices. It manages volatility in gross margins by maintaining low
inventory days and any gain/ loss in inventory is passed on to customers (packaging accounts for a small amount of
the final product price), which helps absorb higher raw material prices by producers.
• EDAL’s business model is characterized by the following:
o Hub & spoke model – the company remains in close proximity to the customer, ensuring lowest lead time/
freight cost
o Ability to execute a wide range of order sizes
o Strong designing capability helps provide clients with appropriate solutions
o Comfortable with long receivable cycles, which eliminates competition from smaller players.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ESS DEE ALUMINIUM
UNRATED (RS427, MCAP: RS13.7BN / US$303.6M)
• Ess Dee Aluminium Ltd. (EDAL) is India’s premier manufacturer of aluminium foil and foil products catering to the
pharmaceutical and FMCG sectors. It derives 70% of its revenues from the pharma sector and the rest from FMCG.
• Revenues and EBITDA witnessed 64% and 35% CAGR over the past four years on the back of aggressive capacity
additions (acquired India Foils Ltd. recently) and buoyant offtake from end-user industries (given limited competition
in domestic markets).
• EDAL’s product range can be broadly classified into aluminum-foil-based flexible packaging laminates and PVCbased
thermo forming products, including aluminium strip foil, blister pack foil, PVC and PVdC coated film,
laminates and cold forming Alu-Alu packaging products. The company supplies these products to various reputed
domestic and international pharmaceutical and FMCG companies based in India.
• Raw material costs account for 86% of EDAL's revenues. EDAL imports aluminium from the Gulf Aluminium Rolling
Mill Co in Bahrain every quarter at market prices. It manages volatility in gross margins by maintaining low
inventory days and any gain/ loss in inventory is passed on to customers (packaging accounts for a small amount of
the final product price), which helps absorb higher raw material prices by producers.
• EDAL’s business model is characterized by the following:
o Hub & spoke model – the company remains in close proximity to the customer, ensuring lowest lead time/
freight cost
o Ability to execute a wide range of order sizes
o Strong designing capability helps provide clients with appropriate solutions
o Comfortable with long receivable cycles, which eliminates competition from smaller players.
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