AGI Greenpac is a leading packaging products company that has shown a strong growth in revenue, EBITDA, and profitability in the past few years. The company has also diversified its product portfolio, expanded its market reach, and invested in innovation and sustainability. However, there are many factors that can affect the future performance of the company, such as the demand and supply dynamics, the raw material prices, the regulatory policies, the consumer preferences, and the competitive landscape. Therefore, it is not possible to predict with certainty whether the company can give 20% CAGR (compound annual growth rate) in the next five years. However, based on the historical data and the current trends, one can estimate the potential growth rate of the company using some assumptions and calculations.
One way to estimate the growth rate of the company is to use the historical CAGR formula, which is:
CAGR = (Ending Value / Beginning Value)^(1 / Number of Periods) – 1
Using this formula, we can calculate the historical CAGR of the company’s revenue, EBITDA, and PBT for the past five years, using the data from the web search results12345. The results are as follows:
- Revenue CAGR = (2281 / 1430)^(1 / 5) – 1 = 0.097 or 9.7%
- EBITDA CAGR = (488 / 307)^(1 / 5) – 1 = 0.097 or 9.7%
- PBT CAGR = (274 / 102)^(1 / 5) – 1 = 0.221 or 22.1%
These results show that the company has grown at a consistent rate of 9.7% in revenue and EBITDA, and at a higher rate of 22.1% in PBT, in the past five years. However, these rates may not reflect the future growth potential of the company, as they are based on the past performance, which may not be indicative of the future trends. Therefore, another way to estimate the growth rate of the company is to use the forecasted CAGR formula, which is:
Forecasted CAGR = (Expected Ending Value / Current Value)^(1 / Number of Periods) – 1
Using this formula, we can calculate the forecasted CAGR of the company’s revenue, EBITDA, and PBT for the next five years, using some assumptions and projections based on the current trends and market conditions. The assumptions and projections are as follows:
- The company’s revenue is expected to grow at a rate of 15% per year, based on the company’s guidance and the industry outlook24.
- The company’s EBITDA margin is expected to improve from 21% in FY23 to 25% in FY28, based on the company’s operational efficiency and product mix23.
- The company’s PBT margin is expected to increase from 12% in FY23 to 15% in FY28, based on the company’s financial management and tax benefits23.
Using these assumptions and projections, we can calculate the expected ending values of the company’s revenue, EBITDA, and PBT for FY28, and then use the forecasted CAGR formula to estimate the growth rates. The results are as follows:
- Revenue in FY28 = 2281 * (1 + 0.15)^5 = 5830 crore
- Revenue CAGR = (5830 / 2281)^(1 / 5) – 1 = 0.15 or 15%
- EBITDA in FY28 = 5830 * 0.25 = 1458 crore
- EBITDA CAGR = (1458 / 488)^(1 / 5) – 1 = 0.243 or 24.3%
- PBT in FY28 = 5830 * 0.15 = 875 crore
- PBT CAGR = (875 / 274)^(1 / 5) – 1 = 0.264 or 26.4%
These results show that the company has the potential to grow at a higher rate of 15% in revenue, 24.3% in EBITDA, and 26.4% in PBT, in the next five years, based on the current trends and market conditions. However, these rates are based on some assumptions and projections, which may not be accurate or realistic, as they are subject to various uncertainties and risks. Therefore, one should do their own research and analysis before investing in any company.
To answer your question, AGI Greenpac may be able to give 20% CAGR in the next five years, depending on the performance of its revenue, EBITDA, and PBT, which are influenced by various factors. However, this is not a guarantee, as there are many challenges and opportunities that can affect the company’s growth potential. Therefore, one should be cautious and prudent when making any investment decisions.
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