Concall AI

EPack Prefab Technologies Limited — Q2 FY26 earnings call

Call held 24 Oct 2025

Management summary

EPACKPEB delivered a strong H1 FY26, with revenue and EBITDA growing 36% and 46% respectively, driven by robust order execution and strategic capacity expansions. The company's order book remains healthy at ₹920 crores, ensuring future revenue visibility. While the packaging segment faced headwinds, the core prefab business continues to outperform, supported by positive operating cash flows and a focus on market penetration in sunrise sectors. Significant investments in Brownfield and Greenfield expansions are underway to further boost capacity and growth.

Highlights

H1 FY26 revenue growth of 36% YoY, demonstrating strong performance.
H1 FY26 EBITDA growth of 46% YoY, indicating improved profitability.
Prefab business achieved a robust 46% CAGR from FY22 to FY25, consistently beating industry growth.
Current order book of ₹920 crores provides clear revenue visibility for 7-8 months.
Operating cash flow turned positive in H1 FY26 due to effective working capital management, with net working capital at 21 days.

Concerns

Packaging business performance in H1 FY26 was impacted by unseasonal rains across India.
Q2 FY26 saw 'little nervousness' in capital investment decisions due to US tariffs, affecting the broader industry sentiment.

Key financials

2 periods

Headline

Net Working Capital Days
21 days

H1

FY26 Revenue Growth
36%
FY26 EBITDA Growth
46%

What they filed

Q1 FY27: revenue up 24.1%, net profit up 12.5% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	268	266	331	295	434 +62%	325 +22%	471 +42%	366 +24%
Expenses	241	239	295	264	384	293	425	331
EBITDA	27	27	35	31	50 +85%	33 +22%	46 +31%	34 +10%
Margin	10%	10%	11%	10%	12%	10%	10%	9%
Other income	3	0	4	3	3	6	6	4
Interest	6	6	7	7	8	8	8	8
Depreciation	5	5	4	5	6	6	6	6
Profit before tax	19	16	28	21	39 +105%	24 +50%	38 +36%	24 +14%
Tax rate	25%	27%	28%	25%	25%	30%	20%	25%
Net profit	14	12	20	16	29 +107%	17 +42%	30 +50%	18 +13%
EPS	1.86	1.50	2.58	2.07	2.93	1.68	3.01	1.81

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.

Order book

high confidence

Total value

₹920 Cr

as of 2025-10-24 quantified

Execution

gives clear visibility of the revenue for the next 7 months to 8 months

Composition

Marquee Customers (client type)
Solar, Renewable, Semiconductor, FMCG, Warehousing, Auto (sector) ₹650 Cr

Pipeline

deal pipeline tcv

Very robust pipeline, strong tailwinds, much better order booking in H2

The company has a strong order book providing good revenue visibility, with significant new orders booked from diverse sectors in the last six months, and anticipates even stronger order booking in the second half of the fiscal year.

Source: Prepared remarks

Capital allocation

high confidence

Capex ₹160 Cr IPO proceeds
- Brownfield expansion for structural steel fabrication in Mambattu ₹58 Cr
- Greenfield expansion for insulated Sandwich Panel Line in Ghiloth, Rajasthan ₹102 Cr
And going forward with the IPO proceeds, money which we have got around Rs. 160 crores for the CAPEX, so again very happy to inform you that the Rs. 58 crores which we are putting for the Brownfield expansion of structural steel fabrication in Mambattu... And also very happy to inform you that the Greenfield expansion which we are doing for setting up an insulated Sandwich Panel Line in Ghiloth, Rajasthan. So, work there has also started.
Debt Debt disclosed Cost 1.5%
- Repayment Repaid term loan, reducing outstanding from ₹122 crores to ₹50 crores. ₹70 Cr
So, look, what we have done is we have repaid Rs. 70 crore term loan, which was about Rs. 122 crore at the beginning of the month. So, we have paid that. So, we are remaining with about Rs. 50 odd crore of term loan. And WCDL at the moment, as I speak, is in the range of Rs. 60 crore. But depending on business scenario, it can go up and down according to situation. So, however, let me also tell you that the interest cost that we have is one of the best in the industry. So, it should be in the range of about a couple of 1.5% going forward as well, the finance cost, 1% to 1.5%.
Liquidity Liquidity disclosed Company generates substantial interest income from FDs, offsetting interest costs.

However, there is a substantial income that we are also generating from the FD that we have currently in hand. In H1, we generated about 0.73% out of the total interest going forward. For the next half, it will be a little better. So, that should square off. The interest cost should almost square off the interest income in the next H2.

Guidance & targets

Profitability

EBITDA Margin Profitability · Going forward · High confidence 10.5% to 11.5%

for the margin expansion, we will continue to maintain at 10.5 to 11.5.

— Sanjay Singhania
EPS Packaging Margin Profitability · Going forward · High confidence Sustainable

And this margin expansion is sustainable, and it will continue to remain in that range.

— Sanjay Singhania
PBT Improvement from Debt Repayment Profitability · Annualized · High confidence 0.4%

On a revenue cycle of let's say INR 1500 crores this translates to about 0.4%. So, yes, I mean that's the kind of expansion, PBT level will improve

— Rahul Agarwal
PAT Improvement from Debt Repayment Profitability · Annualized · High confidence 0.3%

and post-tax another 75% will get added to PAT. So, that's about 0.3% expansion should happen on account of that.

— Rahul Agarwal

Market Share

Market Share Market Share · Going forward · Medium confidence 10%

From 5%-5.5% today

Our market share is around 5%-5.5% right now, which we want to take it to say 10% kind of a level, minimum.

— Sanjay Singhania

Capacity

Brownfield Expansion Commercial Production Capacity · FY26 · High confidence Q4 FY26

We are very hopeful to start the commercial production from this Brownfield expansion in the 4th Quarter of this financial year.

— Sanjay Singhania
Greenfield Expansion Commercial Production Capacity · FY27 · High confidence Q2 FY27

And the target is to start commercial production in that plant as well from second quarter of next financial year.

— Sanjay Singhania
Structural Steel Fabrication Capacity Capacity · Post IPO proceeds utilization · High confidence 170,000 tons

From 133,000 tons today

the capacity for the structural steel fabrication for us right now is around 1,33,000 tons, which is increasing to 1,70,000 tons post the utilization of the IPO proceeds for the structural steel.

— Sanjay Singhania
Structural Steel Capacity Utilization Capacity · Annualized basis · High confidence at least 80%

At this time, in this financial year, we assume that you'll be able to utilize at least 80% of the capacity overall on an annualized basis for structural steel fabrication.

— Sanjay Singhania
Sandwich Panel Capacity Utilization (Mambattu) Capacity · Annualized basis · Medium confidence 50%-55%

And once we get this project, so I understand that we will be able to utilize that capacity on an annualized basis by about 50%-55%.

— Sanjay Singhania

Volume

EPS Packaging Business Growth Volume · Going forward · Medium confidence 6% to 7%

You are correct that the EPS Packaging business has not grown substantially in the last 3 years, and going forward also we believe that it will continue to grow at 6% to 7% because as I said like this Packaging business about 50% of the revenue is coming from one single customer, that is LG Electronics.

— Sanjay Singhania

Working Capital

Working Capital Days Working Capital · Going forward · High confidence around 35 days

Although we have given guidance to the market of around 35 days.

— Sanjay Singhania

Debt

Cost of Debt Debt · Going forward · High confidence 1% to 1.5%

it should be in the range of about a couple of 1.5% going forward as well, the finance cost, 1% to 1.5%.

— Rahul Agarwal

Operations

Order Conversion Time Operations · Going forward · High confidence 6 to 8 weeks maximum

Yes. So, it is around I would say 6 to 8 weeks maximum.

— Sanjay Singhania

Order Inflow

H2 Order Booking vs H1 Order Inflow · FY26 · High confidence H2 is much better (55% of annual)

From H1 (45% of annual) today

for us, the first half is around 45% of the annual revenue and the second half contributes about 55%. Reason being that in the Q3 and Quarter 4, the weather conditions are much better. So, the delivery and the execution at the site can be done easier. And this robust performance which has come, it has been backed by first of all order book, then the utilization of the capacities.

— Sanjay Singhania

Revenue

Export Sales as % of Revenue Revenue · Current · High confidence 1.5%-2%

So, at this moment, our export sales are miniscule. They are in the range of 1.5%-2% of the revenue.

— Sanjay Singhania

What to watch in Q3 FY26

Mambattu Brownfield expansion commercial production

Q4 FY26

Current Work commenced, hopeful for start

Target Commercial production started

Why it matters

This expansion will add 28,000-32,000 tons of structural steel capacity, significantly contributing to future revenue and growth.

We are very hopeful to start the commercial production from this Brownfield expansion in the 4th Quarter of this financial year.

Risks & concerns

Raw material price volatility (steel)
medium

Steel constitutes 80-85% of raw material cost, and most contracts are fixed-price, but company mitigates risk through inventory, forward orders, and natural hedging.

Analyst acknowledged
Competition replicating execution speed
low

Management recognizes the possibility of competitors copying processes but asserts that speed is ingrained in their company culture and DNA.

Analyst acknowledged
Impact of unseasonal rains on packaging business
low

Unseasonal rains in H1 FY26 affected the consumer durable market, impacting the packaging business performance.

Management acknowledged
Global economic uncertainty (US tariffs) impacting capital investment
low

US tariffs created 'little nervousness' in capital investment decisions in Q2 FY26, affecting broader industry sentiment.

Management acknowledged

Q&A highlights

7 direct

Sustainability of 40% CAGR growth Partial

It's a very difficult and tricky question for us to say, but the comfort in our business comes from the order book... I am very much sure that we can continue this momentum of robust growth and beating the industry at least for the next 18 to 24 months.

Analyst questioned the sustainability of the high growth rate, and management linked it to order book visibility and industry outperformance.

Asked by Subhanu Bangal

Asset turnover and revenue potential from new capacities Direct

in the structural steel segment, we can do about 6.5x to 7x of asset turn. So, this Rs. 58 crores which is going into the Brownfield, there we can expect the revenue of Rs. 300 plus crores... in insulated sandwich panels, we can do asset turn of 2.5. So, maximum Rs. 250 crores kind of revenue can come from there as well.

Provides specific financial projections for the revenue generation from the new Brownfield and Greenfield capacity investments.

Asked by Balasubramanian

Strategies to mitigate steel price fluctuation Direct

First of all, we have an inventory of raw material of close to 35 to 40 days... Secondly, when we issue a purchase order to our steel vendors... the purchase order is for delivery for the next 8 to 10 weeks... And thirdly, there's a process of natural hedging that happens in our business because we book orders almost every week.

Details the company's multi-pronged approach to manage raw material price volatility, a critical risk in the capital goods sector.

Asked by Subhanu Bangal

Factors contributing to positive operating cash flow Direct

This year has been really well for us in terms of managing our working capital as well. And that has been the primary reason why we were able to generate cash flow from operation positive.

Highlights improved working capital management as the key driver for the shift to positive operating cash flow, indicating better financial health.

Asked by Umang Parekh

Impact of debt repayment on profitability (PBT/PAT) Direct

The loan that we repaid was to the tune of INR 70 crores at even an 8.25 percentage kind of an interest rate... this translates to about 0.4%... PBT level will improve and post-tax another 75% will get added to PAT. So, that's about 0.3% expansion should happen on account of that.

Quantifies the direct positive impact of debt reduction on the company's PBT and PAT margins.

Asked by Sravan

Competitive advantage of execution speed and risk of replication Direct

See there is no process in this universe now which cannot be copied or replicated by any other company... So, there is a possibility that competitors will sooner than later try to catch up, but how we are different is the speed is in our DNA.

Addresses a core competitive differentiator and management's view on its sustainability against potential competitive imitation.

Asked by Axay Shah

PEB industry performance in H1 FY26 and future demand drivers Direct

See this first half of the year was a little challenging in terms that in the first quarter there was this India-Pakistan situation, and then in second quarter this US tariff created little nervousness in the capital investment decisions. But still I would say the industry has done around 10% to 12% of growth in the first 6 months, and most of the growth is coming right now from Renewables, and from Auto, and FMCG...

Provides crucial context on the broader industry environment, challenges faced in H1, and the key sectors driving current growth.

Asked by Vaibhav Gupta

Data centers as a new growth opportunity Direct

we are already happy to say that we are already working on a couple of data center projects wherein we are doing sandwich panel installation... overall data center is looking a promising market for us in the future.

Identifies a high-potential, emerging sector where the company is already gaining traction, indicating future diversification and growth avenues.

Asked by Mayur Patel

3 min read 7 chapters

Detailed narrative

Robust H1 FY26 Performance and Prefab Business Momentum

EPACK Prefab Technologies Limited reported a strong H1 FY26, with revenue growing 36% year-on-year and EBITDA increasing by 46% year-on-year. The core prefab business has demonstrated a consistent 46% CAGR from FY22 to FY25, significantly outperforming industry growth. This performance is attributed to strategic investments in infrastructure, team development, digitalization of processes, and a healthy order book, which provides clear revenue visibility for the coming months.

Healthy Order Book and Future Visibility

As of October 24, 2025, the company's order book stands at approximately ₹920 crores, ensuring revenue visibility for the next 7 to 8 months. In the preceding six months, new orders totaling ₹650 crores were secured from key sectors including solar, renewable energy, semiconductor, FMCG, warehousing, and automotive. Management anticipates that the second half of FY26 will be a stronger period for order booking, typically contributing 55% of annual orders compared to 45% in H1, driven by favorable weather conditions for project execution.

Strategic Capacity Expansions and Project Timelines

The company is actively utilizing ₹160 crores from its IPO proceeds for capacity enhancements. A ₹58 crore Brownfield expansion for structural steel fabrication in Mambattu has commenced, with commercial production targeted for Q4 FY26. Additionally, a ₹102 crore Greenfield expansion for an insulated Sandwich Panel Line in Ghiloth, Rajasthan, is underway, with commercial production expected by Q2 FY27. These expansions are projected to increase structural steel fabrication capacity from 133,000 tons to 170,000 tons and are expected to generate significant additional revenue.

Improved Financial Management and Working Capital Efficiency

EPACKPEB has demonstrated improved financial management, with operating cash flow turning positive in H1 FY26. The company successfully repaid ₹70 crores of its term loan, reducing the outstanding amount to ₹50 crores, which is expected to improve PBT by 0.4% and PAT by 0.3% annually. Net working capital currently stands at 21 days, significantly lower than the guided target of around 35 days, reflecting efficient management of receivables and payables. The cost of debt is projected to remain low at 1% to 1.5%.

Market Penetration and Emerging Sector Opportunities

The company aims to expand its market share from the current 5-5.5% to 10% by focusing on larger, big-ticket projects and deepening its presence across India. EPACKPEB is actively pursuing opportunities in sunrise sectors such as data centers, where it is already executing sandwich panel installations and sees a promising future market. The company is also evaluating export possibilities to the Middle East and Africa, leveraging the geographical advantage of its Mambattu facility.

Execution Speed as a Core Competitive Advantage

EPACKPEB highlights its execution speed as a primary competitive differentiator, enabling it to complete projects significantly faster than peers. This capability has led to increased customer trust and repeat orders, particularly from new-age industries requiring rapid construction. While acknowledging the potential for competitors to replicate processes, management asserts that speed is integral to the company's 'DNA,' driven by automation, digitalization, and robust internal processes developed over years.

EPS Packaging Business Performance and Margin Outlook

The EPS Packaging business, contributing 6-7% of total revenue, experienced headwinds in H1 FY26 due to unseasonal rains impacting the consumer durable market. However, the segment's margins have expanded and are deemed sustainable, primarily due to investments in multi-fuel turbine technology that reduced power and fuel costs. The business's growth is closely tied to its major customer, LG Electronics, and is expected to continue growing at 6% to 7% going forward.

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

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