EPACK Durable Limited, incorporated in 2003, has evolved from a contract manufacturer into a prominent Original Design Manufacturer (ODM) for consumer durables in India. The company made a pivotal shift in 2012 to focus on ODM services for air conditioners, small domestic appliances (SDA), and large domestic appliances (LDA). Today, it stands as the second-largest Room Air Conditioner (RAC) ODM in India, commanding a significant 24% market share in terms of units manufactured domestically in Fiscal 2023. Founded and led by the Singhania and Bothra families, the management team brings over two decades of deep-rooted experience in the consumer durables manufacturing sector.

The company's operational strength is anchored by three strategically located and highly backward-integrated manufacturing facilities in Dehradun, Bhiwadi, and Sricity. This vertical integration allows for the in-house production of critical components such as heat exchangers, copper tubing, and Printed Circuit Board Assemblies (PCBAs), providing a distinct cost advantage and control over the supply chain.

EPACK's business is diversified across several product categories. As of the first half of Fiscal Year 2026 (H1-FY26), the RAC segment is the largest contributor, accounting for 57% of operating revenue. The Small Domestic Appliances (SDA) and Components segments each contribute 17%, followed by Large Domestic Appliances (LDA) at 6% and Others at 3%. This portfolio diversification demonstrates a strategic shift to reduce dependency on any single product category. The company serves a marquee list of clients, including industry leaders like Voltas, Haier, Philips, Panasonic, Godrej, Daikin, Havells, and Blue Star, underscoring its reputation for quality and reliability in the market.

Official Website: http://www.epackdurable.com/

• Q3-FY26 Performance:

• Operating Revenue: Grew 13.5% year-over-year (YoY) to INR 4,278 million.

• EBITDA: Increased by 31.5% YoY to INR 317 million, with the EBITDA margin expanding by 102 basis points to 7.41%.

• Net Profit (PAT): Grew by 4.0% YoY to INR 26 million. The PAT margin saw a slight contraction of 5 basis points to 0.61%.

• 9M-FY26 Performance:

• Operating Revenue: Declined by 14.7% YoY to INR 13,034 million. This was primarily driven by a 36.2% YoY fall in the AC segment revenue.

• Segmental Growth: The decline in ACs was partially offset by strong growth in other segments. SDA & LDA revenue grew 36.1% YoY, and Components revenue surged by 158.4% YoY.

• EBITDA: Increased by 3.0% YoY to INR 881 million, with the margin improving by 116 basis points to 6.76%.

• Net Profit (PAT): Declined significantly by 81.6% YoY to INR 32 million, primarily due to higher interest and depreciation costs associated with ongoing capital expenditures.

• Historical Performance (FY22-FY25):

• Revenue Growth: Revenue from Operations grew from INR 9,242 million in FY22 to INR 21,709 million in FY25.

• Profitability: EBITDA increased from INR 688 million in FY22 to INR 1,576 million in FY25. Profit After Tax grew from INR 174 million to INR 551 million over the same period.

• Balance Sheet and Key Ratios:

• Leverage: The Net Debt to Equity ratio improved significantly from 2.95 in FY22 to 0.37 in FY25. However, it increased to 0.71 as of H1-FY26, reflecting borrowings for capital expansion.

• Working Capital: The Cash Conversion Cycle increased from 57 days in FY25 to 112 days in H1-FY26, driven by higher inventory and receivable days and lower payable days, indicating increased working capital requirements.

While 9M-FY26 revenue was impacted by a slowdown in the core RAC segment, the company demonstrated strong growth in its diversifying segments and improved its operational profitability.

• Advanced Vertical Integration: The company manufactures a high percentage of critical components in-house, including plastic molding parts, sheet metal, heat exchangers, PCBAs, copper tubing, and universal motors. This backward integration provides significant cost advantages, better quality control, and supply chain resilience compared to competitors who rely on external sourcing.

• Long-Standing Customer Relationships: EPACK has built deep and trusted relationships with a majority of the leading consumer durable brands in India, such as Voltas, Haier, Philips, and Daikin. These established partnerships provide a stable revenue base and opportunities for cross-selling new products.

• Robust Product Development Capabilities: As an ODM, the company possesses strong in-house design, development, and optimization capabilities. This allows it to offer a full spectrum of products within the RAC and SDA value chains, catering to the specific needs of its diverse clientele.

• Experienced Leadership: The founding promoters have over two decades of experience in the consumer durables manufacturing industry, providing proven leadership and a deep understanding of market dynamics.

The company's core strength lies in its highly integrated manufacturing operations and established partnerships with blue-chip customers, which creates a competitive moat.

• Room Air Conditioner (RAC) Market:

• The Indian RAC market is projected to grow at a Compound Annual Growth Rate (CAGR) of 16% between 2025 and 2030.

• Market volumes are estimated to reach 28 million units by 2030, driven by low household penetration, rising disposable incomes, increasing temperatures, and a growing middle class.

• The market is shifting towards energy-efficient smart cooling solutions and more eco-friendly refrigerants.

• Small Domestic Appliance (SDA) Market:

• Demand is strong for kitchen appliances (mixer grinders, air fryers), home comfort products (air purifiers), and cleaning technology (vacuum cleaners).

• Growth is fueled by the rise of nuclear families, urbanization, aspirations for smart homes, and government initiatives like the Production Linked Incentive (PLI) schemes.

• Regulatory Environment:

• The mandatory implementation of Bureau of Indian Standards (BIS) certification for RACs, SDAs, and key components has created significant entry barriers for imports, particularly from China and Thailand. This policy directly benefits domestic manufacturers like EPACK by creating a more favorable competitive landscape.

The outlook for the domestic consumer durables market is robust, supported by strong demand drivers and a favorable regulatory environment that promotes local manufacturing.

• Product Diversification: The company is successfully reducing its reliance on the RAC business. The contribution of the RAC segment to operating revenue has decreased from 80% in FY23 to 57% in 9M-FY26, while the share of SDA, LDA, and Components has increased from 20% to 43% in the same period.

• Customer Diversification: Dependency on the top two customers has been significantly reduced, falling from 72% of revenue in FY23 to 38% in 9M-FY26. The total number of customers has grown from 55 in FY25 to 67 in 9M-FY26, indicating a broadening client base.

• Strategic Partnerships:

• Hisense: A strategic partnership has been established to manufacture air conditioners and other appliances for Hisense in India. This collaboration is anticipated to generate $1 billion in incremental revenue over five years and includes plans for exports to SARC and MEA markets.

• EPA VO Electricals Private Limited: A 50:50 joint venture with the Ram Ratna Group to manufacture Brushless DC (BLDC) motors and other HVAC components. This move strengthens backward integration and capitalizes on the demand for energy-efficient products.

• New Product Development: The company has a clear roadmap for new product launches. Products launched in FY26 include air fryers and nutri blenders, with plans for infrared cooktops, coffee makers, vacuum cleaners, and personal care items like hair dryers in the near future.

Growth is being propelled by a deliberate strategy of de-risking the business through product and customer diversification, complemented by high-impact strategic JVs.

• Production Linked Incentive (PLI) Scheme: The company is a participant in the government's PLI scheme for RACs and components. This scheme provides financial incentives for increased domestic production and enhances manufacturing competitiveness, creating a significant growth opportunity.

• Entry into Electronics Manufacturing Services (EMS): EPACK is leveraging its component manufacturing capabilities to enter the EMS business. It has secured tie-ups with major brands like Panasonic and Daikin to produce PCBA controllers and copper components, optimizing its capacity and tapping into a new revenue stream.

• Export Market Expansion: The incorporation of Epack Durable Global Sales LLC-FZ in the UAE signals a clear intent to expand its footprint into the Middle East & Africa (MEA) markets, tapping into international demand.

• New Market Verticals: The company has successfully diversified beyond consumer durables by entering the energy meter sector as a component supplier for Genus. This move opens up new industrial verticals for its component business.

EPACK is strategically leveraging government incentives and its core manufacturing strengths to expand into new business segments and international markets.

• Existing Installed Capacity:

• RAC: 1.60 million indoor units, 2.05 million outdoor units, and 0.62 million window AC units.

• LDA: 0.60 million air coolers and 0.65 million washing machines.

• SDA: 2.00 million induction stoves, 0.62 million mixer grinders, and 0.11 million water dispensers.

• Capital Expenditure (Capex):

• A strategic capex of INR 4,500 - 5,000 million is planned, to be completed by the end of Q2 FY27. This investment is aimed at ramping up capacities and adding new products to meet market demand for FY27 and beyond.

• In the first nine months of FY26, the company invested INR 2,185 million, with significant allocations towards the Sricity facility (INR 936 million) and the new plant for the Hisense partnership (INR 720 million).

The company is undertaking a significant capex program to expand its manufacturing capabilities, reflecting a confident outlook on future growth and demand.

• Strategic Focus: The SDA, LDA, and Components segments are identified as the primary growth catalysts for the future, complemented by sustained growth in the core RAC segment.

• Growth Roadmap for FY26: The company's expansion strategy is built on a three-pronged approach:

• NCNP: New Customer–New Product

• NCEP: New Customer–Existing Product

• ECNP: Existing Customer–New Product

• ODM Portfolio Expansion: There is a targeted focus on expanding the ODM business for high-growth categories, including Washing Machines, Mixer Grinders, Air Fryers, Infrared Cooktops, and Nutri Blenders.

• Client Relationship Optimization: The company plans to leverage its strong, established client relationships to deepen engagement, increase wallet share, and enhance its overall market position.

The future strategy is clearly defined, focusing on aggressive expansion in non-RAC product categories through a structured customer and product acquisition framework.

• EBITDA Margins: Margins have shown resilience and improvement. The 9M-FY26 EBITDA margin stood at 6.76%, an improvement of 116 basis points YoY from 5.60%. The Q3-FY26 margin was 7.41%, up 102 basis points YoY. Historically, the margin has fluctuated, with 8.19% in FY24 and 7.26% in FY25.

• PAT Margins: Net profit margins are currently under pressure. The 9M-FY26 PAT margin was 0.25%, a sharp decline from 1.14% in 9M-FY25. This compression is primarily due to a 23.4% YoY increase in finance costs and a 13.7% YoY increase in depreciation, both resulting from the ongoing large-scale capital expenditure.

• Expense Structure: For 9M-FY26, while raw material costs as a percentage of revenue have been managed effectively, the increase in fixed costs related to interest and depreciation is impacting bottom-line profitability.

While operational efficiency is improving EBITDA margins, elevated finance and depreciation costs from strategic investments are temporarily compressing net profit margins.

• Customer & Product Concentration (Mitigating): The company has successfully addressed historical risks related to over-reliance on a few customers and a single product category. Dependency on top customers and the RAC segment has been systematically reduced through strategic diversification efforts.

• Execution Risk: The company is concurrently managing multiple large-scale projects, including a significant capex plan of INR ~5,000 million and two major joint ventures (Hisense and EPA VO). There is an inherent risk associated with executing these complex projects on time and within budget to realize their projected financial benefits.

• Working Capital Management: The Cash Conversion Cycle has more than doubled from 57 days in FY25 to 112 days in H1-FY26. This deterioration indicates potential pressure on liquidity and highlights the need for disciplined working capital management as the business scales up.

While historical concentration risks are being actively managed, the company now faces execution risks tied to its aggressive growth strategy and challenges in working capital management.

• Shareholding Pattern (as of Dec 31, 2025):

• Promoters: 47%

• Public: 40%

• Domestic Institutional Investors (DII): 7%

• Foreign Portfolio Investors (FPI): 6%

• New Facility Commissioning:

• The greenfield facility in Bhiwadi for the EPA VO joint venture commenced commercial production in Q2 FY26.

• The new manufacturing facility in Sri City, established for the Hisense partnership, is on schedule to begin commercial production in Q4 FY26.

• New Customer Acquisition: In Q3-FY26, the company added 2 new customers, including a strategic entry into the energy meter component segment with Genus, expanding its industrial footprint beyond consumer durables.

The company is making tangible progress on its strategic initiatives, with new facilities coming online and a continuous expansion of its customer base into new sectors.