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    EPACK Durable Q1 FY27 earnings call

    EPACK
    Consumer Durables·12 Aug 2026
    Management Summary

    EPACK Durable reported a strong Q1 FY27 with record revenue of ₹886 crores, driven by robust growth in both RAC and domestic appliance segments. While EBITDA margins saw compression to 6.21% due to the absence of PLI income and forex losses, the company is actively diversifying its product portfolio, expanding customer base, and improving capacity utilization. Management is focused on converting scale into operating leverage and achieving PAT positivity in historically weak Q2/Q3 quarters.

    Highlights

    5

    • Highest ever quarterly revenue of ₹886 crores, reflecting a 34% YoY growth.

    • Strong growth in core RAC business (44% total, 30% volume, 14% value) and 68% YoY growth in domestic appliances.

    • Successful diversification strategy, now serving 72 customers across 19 product categories, reducing customer concentration.

    • Sri City plant utilization significantly improved to nearly 50% in Q1 FY27.

    • Hisense partnership delivered 60,000 AC units, contributing ₹65 crores revenue in Q1 FY27.

    Concerns

    4

    • EBITDA margin compressed to 6.21% from 8.24% YoY, primarily due to absence of PLI income (₹13.31 crores in Q1 FY26) and forex losses.

    • Net profit was ₹11.8 crores, impacted by higher depreciation and finance costs.

    • Q2 and Q3 historically have been loss-making quarters due to seasonality, though efforts are underway to neutralize this.

    • Disputed sales receivable of ₹19 crores mentioned in notes and accounts.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue from Operations₹886 Cr+34%YoY
    2. 02EBITDA₹55 Cr+0.7%YoY
    3. 03EBITDA Margin6.2%
    4. 04Net Profit₹11.8 Cr
    5. 05Finance Cost Increase₹3 Cr

    Segment breakdown

    Room Air Conditioners (RAC)
    ₹660 Cr Revenue44% Total Growth30% Volume Growth14.0% Value Growth
    Small & Large Domestic Appliances (SDA & LDA)
    68% Revenue Growth₹80 Cr Revenue (FY26)₹130 Cr Revenue (Q1 FY27)
    List

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹10 crores this quarter · ₹450 crores (FY26) planned

    Debt

    Debt disclosed

    Guidance & targets

    10
    CategoryTargetPriority
    Volume
    AC Industry Growth
    20%
    		High
    Volume
    SDA/LDA/Components Growth
    faster than AC
    		High
    Margin
    EBITDA Margin (normalized)
    normalized EBITDA
    		High
    Capacity
    Overall Plant Utilization
    more than 60%
    		High
    Revenue
    Hisense Partnership Cumulative Revenue
    8,000 crores
    		High
    Product Launch
    Front Load Washing Machine Production
    mass production
    		High
    Profitability
    PAT Positive (Q2/Q3)
    PAT positive
    		Medium
    Customer Base
    Total Customers
    closer to 75
    		High
    Product Lines
    Total Product Lines
    20
    		High
    Capex
    Additional Capex for FY27
    60-70 crores
    		High

    What to watch in Q2 FY27

    5

    Q2/Q3 PAT Positive Status

    next 4-6 quarters
    CurrentHistorically loss-making quarters
    TargetProgress towards PAT positive status

    Why it matters

    Demonstrates success of diversification strategy in neutralizing seasonality and improving overall profitability.

    So 4 to 6 quarters, definitely, we believe we should be in a situation wherein we can completely stop this bleeding situation.

    Risks & concerns

    6
    RiskSeverity

    Forex exchange rate volatility

    Forex loss impacted margins in Q1 FY27, though prices are typically updated quarterly. — Management acknowledged

    medium

    Commodity price inflation

    Commodity price increases are typically passed on with a time lag, impacting margins temporarily. — Management acknowledged

    medium

    Seasonality of demand (Q2/Q3)

    Q2 and Q3 have historically been loss-making quarters due to heavy dependence on air conditioners. — Management acknowledged

    high

    Working capital management and inventory levels

    Inventory levels have been escalated in past quarters, leading to higher working capital requirements and finance costs. — Management acknowledged

    medium

    Cessation of PLI benefits

    FY27 is the last year for PLI benefits, requiring reversal of discounts passed to customers to maintain normalized EBITDA. — Management acknowledged

    medium

    Disputed sales receivable

    INR 19 crores in disputed sales receivable mentioned in notes and accounts. — Analyst acknowledged

    low

    Q&A highlights

    8

    “air conditioners is having -- the tailwinds still continue, and we see long-term growth story for air conditions, our core manufacturing product category. On top of it, the other appliances in which we are expanding very aggressively like the small and the large domestic appliances, each of the newer categories, whichever we are adding, we see strong growth momentum, a lot of customer traction.”

    Analyst sought clarity on strategic priorities and risk management, to which management reiterated focus on AC growth and aggressive expansion in other high-growth, high-margin categories.

    asked by Sucrit Patil

    3 min read7 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    EPACK Durable reported its highest ever quarterly revenue from operations at ₹886 crores in Q1 FY27, marking a significant 34% year-on-year growth. EBITDA for the quarter stood at ₹55 crores, a modest 0.70% increase YoY, with the EBITDA margin at 6.21%. Net profit was ₹11.8 crores. The margin was impacted by the absence of PLI income, which was ₹13.31 crores in Q1 FY26, and a forex loss of ₹6-7 crores in the current quarter.

    02

    Diversification Strategy & Growth Drivers

    The company's diversification strategy is yielding results, with core RAC business growing strongly at 44% (30% volume, 14% value) and domestic appliances (SDA & LDA) showing a robust 68% YoY growth. SDA and LDA revenues increased from approximately ₹80 crores in Q1 FY26 to ₹130 crores in Q1 FY27. EPACK now serves 72 customers across 19 product categories, having added 3 new categories in Q1 FY27, significantly reducing customer concentration and de-risking revenue streams.

    03

    Margin Dynamics & PLI Impact

    The reported EBITDA margin of 6.21% for Q1 FY27 compares to 8.24% in Q1 FY26. However, adjusting for the PLI income of ₹13.31 crores in Q1 FY26, the like-to-like EBITDA margin for Q1 FY26 was closer to 6.4%. This implies a 15 basis points improvement in the underlying margin for Q1 FY27. Management is actively negotiating with customers to roll back PLI discounts, aiming to fully reverse them by the end of FY27 to achieve normalized EBITDA margins as PLI benefits cease.

    04

    Capacity Utilization & Operational Efficiency

    Overall plant utilization across all three facilities (Dehradun, Bhiwadi, and Sri City) is targeted to exceed 60% for FY27. In Q1 FY27, Dehradun and Bhiwadi operated at nearly 90% utilization, while Sri City saw significant improvement, reaching almost 50% utilization compared to less than 25% previously. The company's focus on ramping up non-AC business is intended to improve utilization during non-AC seasons and enhance overall operational efficiency.

    05

    Hisense Partnership & New Product Categories

    The partnership with Hisense is progressing well, with EPACK delivering approximately 60,000 air conditioners, contributing ₹65 crores in revenue during Q1 FY27. The company projects a cumulative revenue of ₹8,000 crores from the Hisense partnership over the next five years. Additionally, EPACK is on track to begin pilot production of front-load washing machines by the end of Q2 FY27, with mass production expected by the end of October, further expanding into higher-margin categories.

    06

    Capital Expenditure & Working Capital Management

    Capex for Q1 FY27 was approximately ₹10 crores. Out of the previously announced FY26 capex plan of ₹450 crores, ₹330-340 crores have already been booked, with ₹40-50 crores in CWIP. An additional ₹60-70 crores in capex is planned for the balance of FY27. Finance costs increased by ₹3-4 crores due to higher working capital requirements driven by 40% growth. Management aims to normalize inventory levels to reduce finance costs and improve working capital efficiency.

    07

    Outlook & Future Priorities

    EPACK Durable is confident in surpassing the industry's projected 20% growth for ACs in FY27, with SDA/LDA/Components expected to grow even faster. The company aims to achieve PAT positivity in historically loss-making Q2 and Q3 quarters within the next 4-6 quarters through continued diversification and operational improvements. By the end of FY27, EPACK expects to expand its customer base to 75 and product lines to 20, reinforcing its position as a leading ODM in living appliances.

    This is an AI-generated summary of a publicly available earnings call transcript.