Epack Durable Ltd Q2FY26 Results: From Air Conditioners to Air-Tight Margins — How India’s 2nd Largest ODM Caught a Chill
1. At a Glance
The thermostat at Epack Durable Ltd seems to have frozen somewhere between ambition and arithmetic. The company — India’s 2nd largest room air conditioner ODM — reported a chilling Q2FY26 consolidated revenue of ₹2,133 million and a net loss of ₹222 million, implying a net margin of -10.4%. That’s not “cool,” that’s cryogenic.
At a market cap of ₹3,210 crore and a stock price of ₹334, Epack trades at a P/E of 78.6, which makes sense only if you’re pricing optimism, not profit. Its ROCE is 9.7%, ROE just 5.98%, and interest coverage barely 1.91× — that’s like trying to cover a king-size bed with a handkerchief.
The Q2FY26 numbers were brutal — revenue down 43.4% QoQ and profit swinging from ₹23 crore to a ₹22 crore loss. While the company blames seasonality (the monsoon ruins the AC party every year), investors aren’t feeling the breeze.
Still, with marquee clients like Daikin, Blue Star, Voltas, and Godrej, and diversification into small domestic appliances, the company isn’t exactly melting down. It’s more like an air-conditioner in fan mode — working, but not cooling enough.
2. Introduction
Epack Durable’s story is the desi manufacturing dream wrapped in an inverter compressor. Incorporated in 2019 but operationally born way back in 2003, the company transitioned from contract manufacturing to Original Design Manufacturing (ODM) for air conditioners — essentially meaning: “we design it, we make it, you slap your brand on it.”
ODM is the sweet spot between genius and ghostwriting — you do all the work, and someone else gets all the branding glory. And Epack has played this game well, quietly capturing 24% of India’s RAC ODM market share in H1FY25.
But as every desi engineer knows — making an AC is easier than keeping your financials cool. Q2FY26 saw Epack’s sales collapse from ₹662 crore to ₹213 crore. Seasonality is real, but so is the pain of thin margins. With an OPM of just 7.77%, the company is essentially earning pocket change while running heavy machinery.
Still, Epack’s vision is grand: expand capacity, diversify into small appliances, and play the “Make in India for the world” card — preferably without the tax raids that hit its Dehradun plant in August 2025. (Yes, those happened. ₹25L CGST + ₹25L SGST paid — a costly audit indeed.)
The story is a blend of scale, sweat, and slightly singed optimism — the perfect mix for a 2,000-word financial thriller.
3. Business Model – WTF Do They Even Do?
Epack Durable is an Original Design Manufacturer (ODM) of room air conditioners and small domestic appliances. Think of them as the Foxconn of Indian home cooling — they make ACs for almost every big brand you’ve heard of: Blue Star, Daikin, Voltas, Haier, Godrej, Croma, and Havells.
They don’t sell under their own name (the ‘Epack’ trademark actually belongs to their group company, EPACK Polymers), but under OEM brands who put their stickers and claim the glory. Epack just manufactures and ships — but designs, tooling, and assembly are theirs.
Their product lineup includes:
Room Air Conditioners (RACs) – both window and split, inverter and fixed-speed.
Small Domestic Appliances (SDA) – induction cooktops, mixer grinders, water dispensers, and now domestic air coolers (since Feb 2024).
Components – copper tubing, fans, and heat exchangers — basically the internal organs of your AC.
Three vertically integrated manufacturing facilities — at Dehradun, Bhiwadi, and Sri City — churn out:
1.6 million indoor units (IDUs),
2.05 million outdoor units (ODUs), and
0.62 million window ACs annually.
Plus, 2 million induction cooktops and 0.62 million mixer grinders. The plants employ over 920 workers and have 4 R&D centers with 70+ engineers, ensuring no compressor remains unoptimized.
However, 80% of Epack’s revenue still comes from RACs, and the top 5 clients contribute over 80% of total sales — a dependency that would make even your clingiest ex look independent.
4. Financials Overview
Source table
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue (₹ Cr)
213
377
662
-43.5%
-67.8%
EBITDA (₹ Cr)
5
9
54
-44.4%
-90.7%
PAT (₹ Cr)
-22.2
-8
23
Loss
Loss
EPS (₹)
-2.31
-0.88
2.39
Loss
Loss
Annualised EPS = -₹9.24 → P/E not meaningful this quarter.
Commentary: That’s not a cooling cycle — that’s a meltdown. Revenue fell faster than the temperature in an Arctic blizzard, and profits evaporated like refrigerant gas. While the company blames “seasonal slowdown,” the magnitude of the drop hints at more: high inventory, pricing pressure, and brutal working capital dynamics.
5. Valuation Discussion – Fair Value Range Only
Let’s run the numbers (and yes, this is purely educational):
Method 1: P/E Approach
TTM EPS = ₹4.27
Industry P/E = 55.9
Epack’s P/E = 78.6 (clearly overpriced for its performance)
Fair Value Range (P/E Method): At 50× → ₹213 At 65× → ₹278
