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    Epack Durable

    EPACKGood
    Consumer Durables·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

    8

    • 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.

    What Changed2

    vs Q1 FY26

    Guidance items19 → 11 (-8)Risks discussed3 → 4 (+1)
    Key financials

    Metrics

    10

    Periods

    2

    Q4 FY25

    4
    • Revenue
      ₹643 Cr
      YoY+22%
    • EBITDA
      ₹72 Cr
      YoY+30%
    • EBITDA Margin
      11.2%
    • Net Profit
      ₹38 Cr
      YoY+36%

    FY25

    6
    • Revenue
      ₹2,171 Cr
      YoY+53%
    • EBITDA
      ₹158 Cr
      YoY+36%
    • EBITDA Margin
      7.3%
    • Net Profit
      ₹55 Cr
      YoY+56.0%
    • Net Debt
      ₹355 Cr

    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
    List

    Guidance & targets

    11
    CategoryTargetPriority
    Capex
    Total Investment
    ₹450-500 crores
    		High
    Profitability
    EBITDA Margin
    7.5% plus
    		High
    Profitability
    EBITDA Margin
    8% plus/minus
    		Medium
    Revenue
    Overall Top Line Growth
    >35%
    		High
    Market Growth
    Room AC Market Growth
    15-20%
    		Medium
    Asset Turnover
    Net Asset Turn
    4x
    		High
    Customer Base
    Number of Customers
    55 to 70
    		High
    Manufacturing Facilities
    Number of Plants
    4 to 6
    		High
    Gross Block
    Total Gross Block
    ₹1,050 crores
    		High
    Debt
    Average Cost of Borrowing
    7.9-8%
    		High
    Air Cooler Business
    Revenue Growth
    twofold
    		High

    Risks & concerns

    4
    RiskSeverity

    Q1 FY26 demand slowdown due to unseasonal rains

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

    medium

    Increased trade inventory levels

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

    medium

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

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

    medium

    Uncertainty regarding BEE rating standards implementation

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

    low

    Q&A highlights

    3

    “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

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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%.

    05

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.