01 — At a Glance
The AC Manufacturer That Can’t Keep Its Stock Cool
- 52-Week High / Low₹421 / ₹216
- Q3 FY26 Revenue₹428 Cr
- Q3 FY26 PAT₹2.59 Cr
- Q3 EPS₹0.27
- Annualised EPS (Q3 × 4)₹1.08
- Book Value / Share₹99.4
- Price to Book2.26x
- Gross NPA~0%
- Debt₹724 Cr
- Equity₹952 Cr
Flash Summary: EPACK just delivered Q3 FY26 revenue of ₹428 crore — up 13.5% YoY — and EBITDA jumped 31.5% to ₹31.7 crore. But the stock is down 35.9% in 6 months, trading at 52.9x P/E on annualised earnings. The company manufactures air conditioners with the efficiency of a window AC in summer heatwave — technically it works, but everything feels hot, contested and confused. And it’s paying zero dividend to console the suffering shareholder.
02 — Introduction
Making Other People’s Air Conditioners, Minus the Respect
Imagine this: you’re Voltas. You want to make air conditioners. But you don’t want to build factories, hire engineers, or deal with manufacturing headaches. So you call EPACK and say, “Build these for us, and we’ll slap our brand on it.” That’s contract manufacturing. EPACK is the invisible hand that keeps millions of Indian families cool every summer — and gets absolutely none of the brand love for it.
Founded in 2003, EPACK Durable Limited is India’s second-largest room air conditioner ODM (Original Design Manufacturer), with 24% market share in H1 FY25. They manufacture complete room ACs, small appliances like induction cooktops and mixer grinders, and components like heat exchangers and copper tubing. Their customers? Blue Star, Voltas, Haier, Havells, Godrej, Whirlpool, Philips. The who’s-who of Indian consumer durables. And yet, most Indians have never heard the name EPACK.
Q3 FY26 was supposed to be triumphant. Revenue grew 13.5% YoY to ₹428 crore. EBITDA soared 31.5% to ₹31.7 crore. But PAT barely budged — just ₹2.59 crore, up 4% YoY. The reason? Finance costs and depreciation hit hard. The company is in full capex mode, building new factories in Sri City (₹30 million investment, commissioned Feb 2026) and Bhiwadi, getting ready for a Hisense JV that launches in Q4 FY26. All while the RAC segment itself had negative growth in Q3. Welcome to the paradox of growth through pain.
ICRA Rating (Jan 2026): A (Stable) / A2+ — reaffirmed and upgraded borrowing limits to ₹1,369.58 crore from ₹1,243.11 crore. The rating agency clearly believes in EPACK’s trajectory. Investors? They seem to be betting the opposite. The 35.9% 6-month decline tells you all you need to know about mood swings in the Indian market.
03 — Business Model: WTF Do They Even Do?
You Make Voltas, We Build It. You Take Credit, We Take Debt.
Contract manufacturing is the ultimate middle-child business. You get the technical challenge, the capital requirement, and the operational headache. The OEM gets the brand equity, the pricing power, and the customer love. EPACK gets ₹428 crores in quarterly revenue and a 52.9x P/E multiple. Life is fair.
Here’s the flywheel: OEMs need factories for seasonal products (like ACs). Building your own is capital-intensive and risky. Outsource to EPACK. EPACK builds factories, trains engineers, invests in tooling, bears commodity risk, and passes through margins via pass-through clauses. When demand peaks (summer heatwave), EPACK runs 24/7. When demand crashes (monsoon + weak consumer spending), EPACK has idle capacity and fixed costs still running. RAC segment is 70-75% of revenue and 72% of that comes from the top customer. That’s Voltas, folks.
But EPACK is diversifying into non-RAC verticals: Small Domestic Appliances (SDA) like air fryers, mixer grinders, cookers (up 30% YoY in Q3); Large Domestic Appliances (LDA) like washing machines (up 74% YoY); and Components for third parties (up 61% YoY). The thesis is clear: de-risk RAC concentration through adjacency plays. And it’s working operationally — Q3 showed EBITDA growth despite RAC being down. But equity market doesn’t reward work-in-progress stories.
RAC Revenue70-75%concentrated risk
Top Customer~70%Voltas is king
SDA Growth+30% YoYAir fryers tracting
Components+61% YoYMulti-appliance play
Fun fact from the concall: EPACK management noted that “revenue mix is becoming more balanced and dependence on top customers are steadily reducing.” Translation: they’re aware the market hates concentration risk. They’re diversifying. But Rome wasn’t built in a quarter, and neither is a de-risked business model. Air fryers and washing machines are growing, but they’re still footnotes in the story. The story is still RAC. And RAC had negative growth in Q3.
04 — Financials Overview
Q3 FY26: The Paradox of Profitable Growth That Made Stock Sad
Result type: Quarterly Results | Q3 FY26 EPS: ₹0.27 | Annualised EPS: ₹0.27 × 4 = ₹1.08
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 428 | 377 | 213 | +13.5% | +101% |
| EBITDA | 32 | 24 | -1 | +31.5% | NM |
| EBITDA Margin % | 7.4% | 6.4% | -0.5% | +100 bps | +790 bps |
| PAT | 2.6 | 2.5 | -22 | +4% | NM |
| EPS (₹) | 0.27 | 0.26 | -2.31 | +3.8% | NM |
The Growth That Confused Everyone: Revenue up 13.5% YoY, EBITDA up 31.5% YoY — looks good on paper. PAT up 4% — already suspicious. But here’s the choke point: net margins are 0.61% (down 5 basis points YoY). Why? Higher depreciation from the new Sri City plant. Higher finance costs from debt-funded capex. Welcome to the capital-intensive manufacturing game, where growth eats your profit before you can celebrate it.
💬 At 52.9x P/E on ₹1.08 annualised EPS, is EPACK a value trap or a grooming bull? The stock fell 35.9% in 6 months while fundamentals improved. What’s your call?
05 — Valuation: Fair Value Range
Pricing an Invisible Manufacturer in a Visible Crisis
