EPACK Durable Limited — Investor Meet, 07-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** EPACK Durable Limited reported a robust performance for the third quarter, with revenue from operations at INR 377 crores, marking a 35% increase year-over-year. EBITDA was INR 24 crores, reflecting a slight rise of 1.3%, resulting in an EBITDA margin of 6.37%. For the nine-month period, revenue reached INR 1,528 crores, a significant jump of 71%, and EBITDA was about INR 86 crores, up 41% year-over-year. The company achieved a net profit of INR 2.5 crores for the quarter and INR 17 crores for nine months, a 132% rise compared to the previous year.

2. **Future Outlook and Growth Drivers:** Management highlighted strong demand across segments, especially in the room air conditioner (AC) market, which constitutes 66% of total revenue. The company plans to ramp production at its new facility in Sri City and expects to start manufacturing Hisense ACs by Q3 of FY26. Diversification into washing machines and domestic appliances is also a strategic focus.

3. **Order Book and Operational Updates:** The company’s management indicated a healthy order book for the current season, backed by government support for discretionary income, anticipating continued growth in consumer demand.

4. **Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** Analysts queried the implications of rising operational costs from the new Sri City facility. Management anticipates normalization in capacity utilization by the end of this calendar year, predicting EBITDA margins to stabilize at 7.25%-7.5%.

- **Market Position and Competitive Landscape:** Analysts expressed concerns about competitors outperforming in revenue growth. Management attributed their steady performance to supply chain challenges, particularly in copper rather than a lack of demand.

- **Operational Challenges or Risks:** Supply chain issues, particularly concerning copper and potential compressor shortages, were discussed. While current shortages have mostly stabilized, some risks may persist in Q4.

- **Capex and Capital Allocation:** Management confirmed existing cash reserves would adequately support forthcoming capital expenditures without needing additional debt.

- **Strategic Priorities and Long-Term Vision:** There is a clear shift toward enhancing product diversification to reduce dependency on ACs, aiming for 60-65% revenue contribution within two to three years.

5. **Market or Regulatory Updates:** There were no significant regulatory updates discussed that would impact the company's operations directly.

6. **Strategic Focus Areas:** A strong emphasis on diversification, cost management, and enhancing capacity utilization was noted. The strategic tone indicates optimism about overcoming current operational hurdles while capturing market share from competitors.

7. **Investor Insight:** Considering EPACK Durable Limited's compelling revenue growth, strategic outlook, and management's confidence in operational enhancements, it aligns favorably for a ‘buy’ position, contingent on continued execution of growth strategies and resolution of operational issues. However, potential volatility from supply chain dependencies warrants cautious monitoring.