EPACK Durable Limited — Q4 FY25 earnings call

Call held 28 May 2025

Management summary

Epack Durable delivered a strong Q4 and full-year FY25 performance, driven by strategic initiatives and favorable industry tailwinds. The company reported significant growth across all segments, particularly RAC, components, and large domestic appliances. Despite short-term concerns regarding Q1 demand due to unseasonal rains and inventory, management remains bullish on FY26, projecting over 35% revenue growth and continued margin expansion, supported by substantial capex for new facilities and product categories.

Highlights

  • Q4 FY25 Revenue from operations stood at ₹643 crores, marking a 22% YoY increase.

  • Q4 FY25 EBITDA was ₹72 crores, up 30% YoY, with an EBITDA margin of 11.21%.

  • Q4 FY25 Net Profit increased by 36% YoY to ₹38 crores.

  • Full Year FY25 Revenue from operations reached ₹2,171 crores, a 53% YoY growth.

  • Full Year FY25 EBITDA was ₹158 crores, up 36% YoY, with an EBITDA margin of 7.26%.

  • Full Year FY25 Net Profit grew by 56% YoY to ₹55 crores.

  • The company plans to invest ₹450-500 crores in capex over the next 12-18 months.

  • FY26 revenue growth is targeted at over 35%, with an EBITDA margin of 7.5% plus.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹643 Cr
    YoY +22%
  • EBITDA
    ₹72 Cr
    YoY +30%
  • EBITDA Margin
    11.2%
  • Net Profit
    ₹38 Cr
    YoY +36%

FY25

  • Revenue
    ₹2,171 Cr
    YoY +53%
  • EBITDA
    ₹158 Cr
    YoY +36%
  • EBITDA Margin
    7.3%
  • Net Profit
    ₹55 Cr
    YoY +56%
  • Net Debt
    ₹355 Cr
  • Net Debt to Equity Ratio
    0.37×

What they filed

Q1 FY27: revenue up 33.8%, net profit down 47.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue377 377 643 662 213 −44%428 +14%591 −8%886 +34%
EBITDA9 23 71 54 -1 −111%29 +26%24 −66%53 −2%
Net profit-8 3 38 23 -22 −175%3 +0%0 −100%12 −48%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • RAC Business
    64% Q4 Operating Revenue Contribution50% FY25 Revenue Growth
  • Product Business
    78% Q4 Overall Revenue Contribution
  • Small Domestic Appliances (SDA)
    20% FY25 Revenue Growth
  • Components
    124% FY25 Revenue Growth
  • Large Domestic Appliances
    — FY25 Revenue Growth

Guidance & targets

Capex

  • Total Investment Capex · next 12-18 months · High confidence ₹450-500 crores
    We plan to invest approximately INR450 crores to INR500 crores over the next 12 to 18 months to expand manufacturing capabilities and support our wholly owned subsidiary to cater to increasing market demand for FY '27 and onwards.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 7.5% plus
    So, we'd like to maintain our EBITDA margins at 7.5% plus. So that's the kind of EBITDA margin guidance we'd like to give, while maintaining the overall PAT.

    — Ajay Singhania, Managing Director and Chief Executive Officer

  • EBITDA Margin Profitability · next 2-3 years (medium term) · Medium confidence 8% plus/minus
    Overall, if you look at medium term for next 2 to 3 years, we are looking at an EBITDA margin of around 8% plus/minus.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Revenue

  • Overall Top Line Growth Revenue · FY26 · High confidence >35%
    So, in terms of top line at EPACK, we are definitely looking to grow overall by more than 35%.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Market Growth

  • Room AC Market Growth Market Growth · FY26 · Medium confidence 15-20%
    See, for the room AC category, the market is looking at a growth of anywhere between 15% to 20% is the kind of growth which the industry is talking about currently.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Asset Turnover

  • Net Asset Turn Asset Turnover · FY27 · High confidence 4x

    From 3.2x (FY26) today

    Our net asset turn has improved from 2.6x in FY '24 to almost 3.2x in FY '26. So, it has improved almost 25% in FY '26. And this year, again, we are looking to further improve it. And our objective is to achieve an asset turn of at least 4x for FY '27.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Customer Base

  • Number of Customers Customer Base · current financial year (FY26) · High confidence 55 to 70

    From 55 today

    So, we are looking to increase plant from 4 to 6 in the current financial year, increase customers from 55 to 70 again in this financial year and also increase product categories and reduce newer product categories as well.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Manufacturing Facilities

  • Number of Plants Manufacturing Facilities · current financial year (FY26) · High confidence 4 to 6

    From 4 today

    So, we are looking to increase plant from 4 to 6 in the current financial year, increase customers from 55 to 70 again in this financial year and also increase product categories and reduce newer product categories as well.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Gross Block

  • Total Gross Block Gross Block · end of Q4 FY26 · High confidence ₹1,050 crores

    From ₹850 crores (FY25) today

    FY '25 INR850 crores and for FY '26, going forward we are looking the gross block of anywhere between INR1,050 crores.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Debt

  • Average Cost of Borrowing Debt · current financial year · High confidence 7.9-8%
    As far as the cost of borrowings is concerned, tentatively, the average cost is around 7.9% to 8%.

    — Rajesh Mittal, Chief Financial Officer

Air Cooler Business

  • Revenue Growth Air Cooler Business · FY26 · High confidence twofold

    From ₹60+ crores (FY25) today

    So, cooler, especially if we look at has grown significantly for us and the revenue contribution from cooler in the complete financial year was INR60-odd crores. And we are definitely looking coolers to grow twofold in this year.

    — Ajay Singhania, Managing Director and Chief Executive Officer

Risks & concerns

  • Q1 FY26 demand slowdown due to unseasonal rains

    medium

    May was a bad month for AC sales, leading to market inventory buildup, but management expects overall positive growth for FY26.

    Management acknowledged

  • Increased trade inventory levels

    medium

    Roughly 2-3 weeks of additional inventory in the trade channel, but customers are positive on Q2 movement.

    Management acknowledged

  • Impact of QCO for copper and compressor availability on inventory and payment terms

    medium

    Supply chain disruptions forced additional inventory carrying and a shift to domestic buying impacted payment terms, affecting overall payable days.

    Management acknowledged

  • Uncertainty regarding BEE rating standards implementation

    low

    BEE rating from January 1 is still under discussion (formalized/deferred), but EPACK is ready with products for upgraded ratings.

    Management acknowledged

Q&A highlights

3 direct
Q1 FY26 demand outlook and trade inventory levels for ACs Direct
So, in short-term, definitely for Q1, there seems to be some concern. But overall, we are very positive with the kind of outlook we have received and with the kind of customer diversification and growth we have embarked on, we are very positive that we would be able to deliver a positive growth in FY '26 and the market also seems to be on track to deliver overall positive growth in this FY '26.

Addresses immediate seasonal challenges and management's confidence in overcoming them for the full year.

Asked by Aniruddha Joshi

BLDC motor capacity, market size, and competitive landscape through Epavo JV Direct
So, in terms of the joint venture company, Epavo, the installed capacity once the greenfield plant comes into operation would be close to 3 million units for air conditioner motors... For BLDC motors, there are already 3 to 4 established players in the country. But still, the AC industry has been importing almost close to 50% plus motors from -- has been imported from foreign market from China and other countries. And as BIS regulations and others kick in, this all is going to get localized.

Provides crucial details on a significant new growth vertical, its market potential, and the company's strategic positioning.

Asked by Yug

Cash flow and inventory management challenges in FY25 and outlook for improvement Direct
So, Jagadish, especially in terms of inventories and payment terms, there are two significant impact that the industry has faced in FY '25, being the QCO for copper and like everybody was talking about the compressor availability. So, on both the fronts, because of the supply chain disruptions, we were forced to carry additional inventories to meet the peak season demand... But with domestic buyers and a lot of them being MSMEs that in the short term has impacted the overall Payable days.

Explains the reasons behind cash flow pressure and inventory buildup, linking it to industry-wide supply chain and regulatory changes, and outlines expected improvements.

Asked by Jagadish Sharma

2 min read 5 chapters

Detailed narrative

Strong Q4 and Full Year FY25 Financial Performance

Epack Durable reported robust financial results for Q4 FY25, with revenue from operations growing 22% YoY to ₹643 crores. EBITDA saw a 30% YoY increase to ₹72 crores, achieving an 11.21% margin, and net profit rose 36% YoY to ₹38 crores. For the full fiscal year 2025, revenue surged 53% YoY to ₹2,171 crores, while EBITDA grew 36% YoY to ₹158 crores, with a margin of 7.26%. Net profit for FY25 increased by 56% YoY to ₹55 crores, demonstrating strong operational leverage and profitability.

Strategic Expansion into New Categories and Subsidiaries

The company is aggressively expanding its product portfolio and manufacturing footprint. The wholly-owned subsidiary, EPACK Manufacturing, dedicated to Hisense products, is under construction with production expected by Q4 FY26, catering to both domestic and export markets. Mass production for washing machines under the ODM business is aligned from end of June. New product categories in Small Domestic Appliances (SDA) like air fryers and coffee makers are being localized due to QCO implementation, driving multifold growth in these segments and adding new customers.

BLDC Motors and Component Localization Initiatives

Through its joint venture, Epavo, Epack Durable is establishing a significant presence in BLDC motors. The greenfield plant will have an installed capacity of 3 million units for AC motors, with production commencing from Q2 FY26. The company notes that over 50% of AC motors are currently imported, and BIS regulations will drive localization. Epavo has already committed ₹75 crores out of ₹85-90 crores capex for this venture, with machines received and installation underway, positioning Epack as a competitive domestic player.

Ambitious Capex Plans and Funding Strategy

Epack Durable plans a substantial capital expenditure of ₹450-500 crores over the next 12-18 months. This investment is allocated across the parent company, wholly-owned subsidiary (₹100 crores for Hisense facility), Sri City (₹150 crores for washing machines and components), and a new greenfield facility in Bhiwadi (₹125 crores for cooling products and other categories). Funding will primarily come from unutilized IPO proceeds (₹230 crores), a new term loan (₹100 crores), and internal accruals (₹100-150 crores), with an average borrowing cost of 7.9-8%.

Market Outlook, Inventory Management, and Margin Trajectory

While Q1 FY26 faces short-term concerns due to unseasonal rains and an estimated 2-3 weeks of additional trade inventory, management is confident in achieving over 35% top-line growth for FY26. The company aims to maintain an EBITDA margin of 7.5% plus for FY26, with a medium-term target of 8% plus/minus over the next 2-3 years, driven by product mix efficiency and price increases. Asset turnover is targeted to improve from ~3.2x in FY26 to 4x by FY27. Challenges in FY25 related to inventory buildup due to QCO for copper and compressor availability, impacting payment terms, are expected to normalize.

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