EPACKNSEJuly 25, 2025

EPACK Durable Limited

9,130words

157turns

19analyst exchanges

5executives

Download PDF ↗EPACK stock page →

Management on call

Bajrang Bothra

CHAIRMAN AND WHOLE-

Ajay Dd Singhania

MANAGING DIRECTOR

Rajesh Kumar Mittal

CHIEF FINANCIAL

Narayan Lodha

EXECUTIVE DIRECTOR AND

Bhoomika Nair

DAM CAPITAL ADVISORS LIMITED

Key numbers — 40 extracted

INR662 crore

and the period under review. For the first quarter under review, revenue from operations stood at INR662 crores, climbed by 14% on a year-on-year basis. EBITDA was around INR55 crores which increased by aro

14%

For the first quarter under review, revenue from operations stood at INR662 crores, climbed by 14% on a year-on-year basis. EBITDA was around INR55 crores which increased by around 6% on a year-on

INR55 crore

om operations stood at INR662 crores, climbed by 14% on a year-on-year basis. EBITDA was around INR55 crores which increased by around 6% on a year-on-year basis with EBITDA margin reported at 8.24%, which

limbed by 14% on a year-on-year basis. EBITDA was around INR55 crores which increased by around 6% on a year-on-year basis with EBITDA margin reported at 8.24%, which expanded by 156 basis points

8.24%

INR55 crores which increased by around 6% on a year-on-year basis with EBITDA margin reported at 8.24%, which expanded by 156 basis points on a year-on-year basis. The net profit was around INR23 cror

156 basis point

ased by around 6% on a year-on-year basis with EBITDA margin reported at 8.24%, which expanded by 156 basis points on a year-on-year basis. The net profit was around INR23 crores, which declined by 2% on a year-

INR23 crore

d at 8.24%, which expanded by 156 basis points on a year-on-year basis. The net profit was around INR23 crores, which declined by 2% on a year-on-year basis. However, net profit mar

6 basis points on a year-on-year basis. The net profit was around INR23 crores, which declined by 2% on a year-on-year basis. However, net profit margin expanded by 43 basi

43 basis point

d by 2% on a year-on-year basis. However, net profit margin expanded by 43 basis points to 3.46%, reflecting better quality of earnings and disciplined execution even in a challenging

3.46%

n-year basis. However, net profit margin expanded by 43 basis points to 3.46%, reflecting better quality of earnings and disciplined execution even in a challenging environmen

34%

profitability on a year-on- year basis. From a segmental perspective, our RAC business witnessed a 34% decline year-on- year, mainly due to suboptimal seasonal demand, reflecting broader market challen

16%

arket challenges. However, other segments demonstrated stronger momentum. The SDA segment grew by 16% on a year-on-year basis, led by healthy order inflows across both existing and new products, pa

Guidance — 20 items

Ajay DD Singhania

opening

“With a strong foundation in place and focused execution, we remain confident in achieving our full year targets and sustaining healthy revenue growth going forward.”

Vishal Dudhwala

“My first question is, now that EPAVO is supplying BLDC motors, what bump in revenue and margin do you expect versus buying motors from outside?”

Ajay DD Singhania

“And in the efforts, going forward, the RFQs are very strong.”

Ajay DD Singhania

“And in terms of the margin mix, we remain firmly on track to deliver strong financial performance, targeting at an EBITDA margin of 7.5%.”

Raj Sarraf

“So how can we take FY '26 going forward?”

Deepali Bansal

“Or is there some changes that you expect that can happen this year?”

Arshia Khosla

“And for the full year, are we guiding some EBITDA margin or we maintain the previous guidance?”

Ajay DD Singhania

“So, in terms of EBITDA margin, we are still targeting an EBITDA margin of 7.5% plus in FY '26 with a medium-term ambition of achieving 8%.”

Bhoomika Nair

“Now given that 1Q has been fairly weak and inventories still remain in the system, do you think that 3Q, 4Q will be able to make up for the decline because 2Q will also likely see a decline on the high base of last year.”

Ajay DD Singhania

“So we see an early -- I mean, we believe that there will be an early start of season and Q3, Q4 should definitely see most of the production for the next year being done in advance.”

Risks & concerns — 9 flagged

From a segmental perspective, our RAC business witnessed a 34% decline year-on- year, mainly due to suboptimal seasonal demand, reflecting broader market challenges.

— Ajay DD Singhania

This diversification is a deliberate move to reduce concentration risk and position ourselves in adjacent high-growth industries.

— Ajay DD Singhania

So, like we have seen a temporary slowdown in Q1 FY '26, primarily due to unseasonal rains that have impacted secondary sales, especially for air conditioners, however, this appears to have been a short-term disruption.

— Ajay DD Singhania

Past quarter, yes, we performed, but it would be difficult to say that if we have taken away any share from any competitor.

— Ajay DD Singhania

See, like I shared, the market is definitely expected to outgrow FY '25 overall despite the slowdown in Q1.

— Ajay DD Singhania

Now given that 1Q has been fairly weak and inventories still remain in the system, do you think that 3Q, 4Q will be able to make up for the decline because 2Q will also likely see a decline on the high base of last year.

— Bhoomika Nair

The exact inventory levels are very difficult to estimate.

— Ajay DD Singhania

So any direct number, both what is the normalized number and what is the high is really difficult to estimate.

— Ajay DD Singhania

A year-on-year number is really difficult to estimate at this point of time.

— Ajay DD Singhania

Q&A — 19 exchanges

So, I have a couple of questions. My first question is, now that EPAVO is supplying BLDC motors, what bump in revenue and margin do you expect versus buying motors from outside? And how quickly will you see cost benefit once the plant is running at full speed?

Ajay DD Singhania

In terms of our new greenfield plant coming up at Bhiwadi for EPAVO, the JV facility, like we shared in our earlier con call, we are putting up a capacity of 3 million motors, BLDC motors, which is almost 10% of the total India market demand. So, with this kind of capacity, we look forward to strong margins and revenue growth both in the subsequent years. The current year being first year, we will focus more on ramping up the capacity, getting the approvals from the customers and also utilizing both for our captive requirement EPACK Durable as well as servicing the other clients in the market.

Thank you for the opportunity. Sir, 2, 3 questions from my side. One, how was the industry growth and at least what -- in June quarter, and we heard the growth has recovered to some extent in June and maybe slightly in July also. So, is that a fair understanding or do you see there is no recovery in sight? That is question one. Question two, what would be the inventory in the market higher than the normal inventory of RAC. Also, lastly, in terms of -- actually, there is no reason -- there was no reason for the brands to buy out the air conditioner considering there was excess inventory at the

Ajay DD Singhania

Thanks, Aniruddha. First of all, like you shared, yes, the industry growth was challenging in Q1, especially April and May, there was substantial loss of sales and revenue for all the brands. The channel inventory was at its peak beginning of June. However, June witnessed the channel inventories being liquidated largely. And now we see a situation wherein the inventories are normalizing. The secondary sales happened in June month and then currently continuing. So definitely, the inventories are slightly higher, but still manageable and quite close to the normal levels, especially now with the

Sir, first of all, I have 2 questions. Like do you see any major recovery in the RAC segment in this financial year, keeping in view all this -- and the second is what is the margin mix of RAC and the rest of the segments we have, which is estimated -- we estimate it to have our rest of the segment by 15% for FY 2026. So these are the questions, sir.

Ajay DD Singhania

See, as we have been discussing, definitely, there was a softened demand in Q1 due to unseasonal weather. However, like I've been sharing with evolving EE standards, the current trend shows a healthy rebound in channel pull-through as inventories align. The RAC market for FY '26 is expected to be still a growth. So definitely, FY '26, we will still see growth and a strong demand is what most of the brands and customers are still expecting with this story -- with the tailwind still being strong on a long- term basis. So the market is definitely destined to grow overall for FY '26. So that's the

My first question is, could you explain the whole company structure now as we are getting -- as we are growing actually, we are taking over, and Hisense is going on, Sri City old expansion is going on. Would you be able to explain the whole structure now, like where washing machines are produced or AC is produced, what is the capacity utilization? What's the time line we're looking at for Hisense or maybe EPAVO or maybe a new organization that we have just started Bumjin, what are we expecting from that? And the Energy Meter sector, which is mentioned in your PPT that you recently entered into

Ajay DD Singhania

Yes, the overall structure for EPACK Durable Limited is that currently we have 4 associate companies, 2 of them being the wholly- owned subsidiary, namely EPACK Manufacturing, which is a dedicated facility for Hisense. Therein, like we have shared earlier, the lines for AC are being set up. The construction is ongoing in full swing. And currently, the lines are being set up and the production ramp-up is expected to start from end of Q3 and then mass production from Q4 onwards. So that's largely the Hisense plant for the OEM product, whereas the Hisense ODM production already commenced from end

Sir, I just want to understand on the margin side. I mean we've expanded our margins, so what's the sustainability on these margins? And any new clients that we've added in the SDA and LDA part of the business?

Ajay DD Singhania

So Arshia, in terms of margins, like we shared, the margin improvement is largely driven by the product mix. So as we can see compared to the Q1 of previous financial year, our overall revenue from other areas of diversification, especially the component business has grown substantially and phenomenally. So wherein the margins are comparatively better. So that is one thing, which is resulting in a better overall margin. In terms of new clients, like I shared, we have added close to 14 new clients in the Q1 of this year, from which 3 clients, the supplies have already commenced. And almost all

Sir, I just wanted to actually just touch upon the RAC bit a little more to understand. You spoke about broadly the year still seeing some growth of about 10-odd percent or maybe more depending on how things pan out. Now given that 1Q has been fairly weak and inventories still remain in the system, do you think that 3Q, 4Q will be able to make up for the decline because 2Q will also likely see a decline on the high base of last year. So, in your opinion, do you think that RAC segment revenues will actually grow for the full year and see that kind of traction versus the second half of last year

Ajay DD Singhania

So Bhoomika, yes, definitely, Q1, the market degrowth and the spillover to Q2 will impact the first half of the year. But with the BEE revision -- upcoming revision and the higher energy efficiency norms coming in, most of the brands are aligning production to begin with somewhere around end of September or October And start ramping up capacities and start ramping up inventories in the channel for the upcoming new season. So we see an early -- I mean, we believe that there will be an early start of season and Q3, Q4 should definitely see most of the production for the next year being done in a

Sir, I have a couple of questions. So my first question is regarding the washing machine, sir. Sir, what kind of revenue are we targeting for the full year? And what will be the realization per unit for washing machine? Sir, my second question is regarding Hisense. Sir, the Hisense capacity in the Phase 1, what will be that units, like how many units are we targeting in the Phase 1? And in the Sri City, I can see that the capex is split between the old plant and the new plant for Hisense. So both the plants are in the same facility?

Ajay DD Singhania

So, Siddhant, first of all, about the Hisense capacity. So for Hisense, we are putting up a capacity of almost 0.5 million air conditions in Phase 1 for assembling of air conditions and making heat exchangers. Yes, there is -- the investment is partly done in the Hisense company as well as there is some investments being done in the mother company, EPACK Durable because the mother company would be supplying all the other components like the copper tubings, controllers, plastic parts, steels, fans, etcetera. So all components, except heat exchangers will be manufactured and supplied by the pare

So, sir, first of all, congratulations on the set of numbers. And my question is regarding like for Hisense, when do you plan to start your washing machine manufacturing?

Ajay DD Singhania

Yes. So like I shared in the earlier question just now, for Hisense, the washing machine trial production is already being done. And this month onwards, the mass production is scheduled to start. So end of -- actually, last week is when the first set of mass production would start for Hisense and then continue. So basically, the AC part and the washing machine part will be in the one plant only, and they will be -- both will be starting the production and with one thing will start together only? So AC production, there are 2 kinds of ACs, what EPACK is supplying to Hisense. One is we call the

Actually, I wanted to ask a few questions, but they are already answered.

Management

Just on the RAC front, the industry has degrown by around 25%, and we have degrown by around 35%. So is there any market share loss? I mean, your peers are yet to report numbers, but I believe they'll be reporting kind of better numbers. That is what the estimates are. So I just want to understand how does it work? Is there any lag effect? Or like how are we placed on this front?

Ajay DD Singhania

Yes. So Nirav, as an ODM OEM manufacturer, there is definitely a lag of numbers between what gets manufactured and what gets sold in the inventory. So, with like June being the fag end of the season, obviously, the brands did not want to pursue any further production and focus more on liquidating whatever was there in the trade. So probably even if the secondary sales recovery was there, fresh production was being curtailed to maintain inventory levels within acceptable limits. So probably there could be some lag. But largely, yes, the industry has degrown to the extent of around 30%, and this

Some bookkeeping questions. What was the PLI that we would have booked in Q1 FY '26 versus Q1 FY '25? Question one. In terms of the revenue guidance that you have shared in the PPT on Slide 10, AC growth, I guess, we are building in somewhere around 15% to 20%. The number is not very clear, but is that understanding correct?

Rajesh Mittal

Aniruddha, this PLI number on quarter-on-quarter on a year-on-year basis is around INR14 crores to INR15 crores. It is almost same number on a year-on-year basis. Maybe -- almost same number, INR14 crores to INR15 crores. Yes. So this is for Q1. Overall, if we see last year, the total PLI, which has been accrued is INR36 crores, whereas for the current financial year FY '25, '26, we are eligible for a PLI of INR56.25 crores. Okay. That's super, sir. And the revenue growth that we are building in from RAC in this year FY '26? So like I just shared in the earlier question, we are looking at the

So, what's the current status of that customs issue, sir? I mean, is there any clarity on whether the industry will have to bear a retrospective penalty? And could it also impact the industry supply side?

Ajay DD Singhania

So the customs issue is linked to imports of copper tube, which the industry does from the ASEAN country and a show-cause notice has been sent to, as per some news articles, to more than 2,000 importers. So that's an industry-wide issue, which is jointly taken up by all the industry associations, both with the Ministry and the Government. It is today unresolved. So the industry continues to give bank guarantees on the copper it imports from the ASEAN country. But the overall view is that definitely, as the domestic capacities are getting built up, going forward, definitely, copper tubings will

So, I had a few questions regarding the recent management activity that was given. On the copper import issue, I think you've clarified already. Just on the inventory level, at the time you said that in the beginning of June, the inventory level is about 5 million units. So can you give me an estimate of what is the number of units in inventory right now?

Rajesh Mittal

Your voice is not clear. Can you repeat the question? It's not loud. I'm just asking regarding inventory levels in the industry, you had said in the beginning of June, it was about 5 million units, which is about 33% of the overall market. So what is the estimate for now -- right now? What is the inventory levels like? So Pratap, I don't have the numbers. So, I don't recall having sharing a 5 million kind of a number. But yes, channel inventories were high. The exact inventory levels are very difficult to estimate. But based on discussions across customers and brands, we understood that becaus

So, sir, I see that on a consol level, our revenues have declined on a year-on-year basis, but there is some 150 bps of margin expansion. So, what is driving this margin expansion on a Y-o-Y basis? Is it product mix or some other reason?

Ajay DD Singhania

Yes. So on a consol basis, yes, Samyak, the margin improvement is largely driven by the product mix. Okay. And sir, secondly, when we say that we will grow in line or outgrow the industry in the RAC segment, so are we going to add any new customers in RAC? Or it's largely the increased demand from the existing set of customers? So it's a mix of all the factors. Definitely, gaining the wallet share from the current customers as well as new customer acquisition has been the strategy, and we continue to work on the strategy, coupled with the kind of pricing discipline and taking advantage or leve

I hope I Sir, just a question on the RAC front. So because we have seen a subdued demand coming out in Q1, so do you see that in the long term, there will be some changes in the procurement strategy by the OEMs? Like will they shift more towards the contract manufacturing side rather than focusing on in-house development of the consumer durables?

Ajay DD Singhania

So Bharat, a decision for in-sourcing and outsourcing, I think, this is a debate which has been going on for ages. But overall, if we see -- so there is -- this is a largely accepted norm wherein brands don't intend to manufacture 100% products in-house. And depending on their overall market share, there is definitely a thrust or a push to derisk in-house manufacturing by outsourcing. And over the last couple of years, if we see outsourcing is something, which has been gradually increasing from an earlier 20% kind of overall market being outsourced to 25%, 30%. And currently, it is anywhere be

Just wanted to check upon the LDA segment. So we have reported about 29% year-on-year growth, and I presume that is likely to be due to the low base and expansion into washing machines. So just wanted to check the growth into other segments like air cooler and how has been the other segments doing?

Ajay DD Singhania

So Nilesh, like I shared earlier, the SDA segment grew almost 15% on a year-on-year basis, and the growth has been largely like the new product addition. And obviously, Q1 being a low season for the small domestic appliances, still there was a growth. Component grew at 556%. And LDA, yes, cooler has been one driving force behind it. And as our washing machine models are now approved and we are ramping up production from the current month onwards, we will see LDA even growing phenomenally from Q2 -- end of Q2 to Q3 onwards. So, delivering the kind of numbers we are talking about, yes, will be d

Thank you for taking my questions again, sir. Actually, for the last 2, 3 quarters, we had been facing a lot of problem with the Sri City plant that we were not running at optimum capacity utilization levels. What is the position right now? Can you point some light on that?

Ajay DD Singhania

Yes. So Deepali, Sri City facility, I mean, we believe was slightly ahead of time. And so there were some challenges in -- for utilization of the capacities. But as the component business is now scaling up, a good bit of utilization has started happening. And Q3 onwards, we definitely see even ACs being manufactured in the South facility. So utilization is bound to improve, and we see that positive momentum already gaining up.

Sir, just wanted to check, most of the bigger players are now going for in-house component manufacturing. So what sort of confidence do we get in terms of scaling up the components, especially in the RAC industry basically? So that was the first question. I have 1 or 2 more, if you can answer this first.

Ajay DD Singhania

Yes. So, Hemang components of RACs, yes, right, some of brands have put up capacities for manufacturing some of the components in-house, but the kind of backward integration, which we at EPACK, claim to have is that we manufacture almost all the components, be it plastic parts, fans, controllers, motors, heat exchangers, copper tubing. So, this is one unique combination we have created. So that gives us an opportunity to supply almost any component to a brand customer. And whatever is -- so a different customer would need a different set of components, and we are leveraging our bandwidth with

Yes, I would like to thank the management and all the participants, particularly the management for giving us an opportunity to host the call. Thank you very much, sir, and wish you all the very best. Any closing comments on your side?

Ajay DD Singhania

Yes. So first of all, thank you, Bhoomika and DAM Capital for doing the con call today. And thank you all the participants who participated, and we hope that we have been able to answer your queries. In case, there are any further queries, we will clarify them on an e-mail or something. So I hope we have been able to answer your questions satisfactorily. Thank you so much.

Speaking time

Ajay DD Singhania

Moderator

Bhoomika Nair

Aniruddha Joshi

Hemang Kapasi

Deepali Bansal

Rajesh Mittal

Siddhant Kanodia

Sujal

Pratap Maliwal

Opening remarks

Bhoomika Nair

Yes. Thanks, Ryan. Good morning, everyone, and a warm welcome to the Q1 FY '26 earnings call of EPACK Durable. We have the management being represented by Mr. Bajrang Bothra, Chairman and Whole Time Director. At this point, I'll hand over the floor to him, and he'll introduce the rest of the management and take the call forward. Thank you very much, sir, and over to you.

Bajrang Bothra

Thank you, Bhoomika. Thank you very much, and good morning, everyone. I am Bajrang Bothra, Chairman of EPACK Durable Limited, and I warmly welcome you all to our Q1 FY '26 earnings conference call. The Board of Directors approved our Q1 FY '26 results on July 19, and I trust you have all had the opportunity to review them. As many of you know, EPACK Durable is India's one of the largest ODM for room air conditioners. We are steadfastly executing our strategy to diversify beyond our core room air conditioners business into higher growth, more profitable categories, namely small domestic appliances and large domestic appliances, namely washing machines and air coolers and components. Joining me on today's call are Mr. Ajay DD Singhania, our Managing Director and CEO; Mr. Rajesh Kumar Mittal, our Chief Financial Officer, EPACK Durable; and Mr. Narayan Lodha, Executive Director and Group CFO, EPACK Group. They will take you through the details of our operational and financial performance f

Rajesh Mittal

Thank you, sir. Welcome to our earnings conference call of the first quarter of financial year 2026. Let me first thank you, our host of today's earnings call, that is DAM Capital. Now let me give you some of the key financial highlights for the quarter ended and the period under review. For the first quarter under review, revenue from operations stood at INR662 crores, climbed by 14% on a year-on-year basis. EBITDA was around INR55 crores which increased by around 6% on a year-on-year basis with EBITDA margin reported at 8.24%, which expanded by 156 basis points on a year-on-year basis. The net profit was around INR23 crores, which declined by 2% on a year-on-year basis. However, net profit margin expanded by 43 basis points to 3.46%, reflecting better quality of earnings and disciplined execution even in a challenging environment. Now I would request our Managing Director and CEO, Mr. Ajay DD Singhania, to brief you on the operational highlights. Over to you, sir.

Ajay DD Singhania

Thank you, Rajesh ji. And once again, good morning, everyone. The first quarter was a bit subdued due to headwinds in the market, primarily driven by unseasonal rains and surplus finished goods inventory in the industry carried over from Q4 FY '25. Despite these external challenges, we delivered a resilient performance. We continue to strengthen our core business fundamentals and added 14 new customers during this quarter with supplies already commenced to 3 of them. Additionally, a more optimized product mix contributed to improved EBITDA margins and stronger profitability on a year-on- year basis. From a segmental perspective, our RAC business witnessed a 34% decline year-on- year, mainly due to suboptimal seasonal demand, reflecting broader market challenges. However, other segments demonstrated stronger momentum. The SDA segment grew by 16% on a year-on-year basis, led by healthy order inflows across both existing and new products, particularly with encouraging preseason demand for

← All transcripts EPACK stock page →

EPACK Durable Limited

Market Movers