1. At a Glance
Epack Durable Ltd is India’s 2nd largest air conditioner ODM with 24% market share. Q1FY26 was a mixed bag—sales fell 14.4%, but EBITDA margin improved. Investors are asking: short-term blip or long-term chill?
2. Introduction with Hook
Imagine you’re the backstage designer of an IPL stadium—never on camera, but without you, the show collapses. That’s Epack Durable in India’s RAC (Room Air Conditioner) story: the invisible hand that builds 1 in every 4 ACs sold in India.
- 96% profit CAGR in last 5 years
- 24% market share in Indian ODM RAC segment
- Yet, Q1FY26 sales fell 14.4%—is the party over or just reloading?
3. Business Model (WTF Do They Even Do?)
Epack is an Original Design Manufacturer (ODM) for:
- Room Air Conditioners: 2nd largest ODM player in India
- Small Domestic Appliances: Water dispensers, coolers, induction cooktops
- Components: AC heat exchangers, PCBA, motors
They manufacture for brands, not directly for consumers—think of them as the Foxconn of ACs.
Revenue Sources:
- RACs: ~70%
- Components: ~20%
- Appliances: ~10%
4. Financials Overview
Revenue and Profit Snapshot (Standalone)
| Metric | FY23 | FY24 | FY25 | TTM |
|---|---|---|---|---|
| Sales | ₹1,520 Cr | ₹1,420 Cr | ₹2,171 Cr | ₹2,060 Cr |
| EBITDA | ₹95 Cr | ₹116 Cr | ₹158 Cr | ₹161 Cr |
| PAT | ₹31 Cr | ₹36 Cr | ₹58 Cr | ₹59 Cr |
| OPM | 6% | 8% | 7% | 8% |
Key Trends:
- Strong topline recovery in FY25
- OPM steadily improving
- Q1FY26: Sales drop of 14.4%, but margins rose 156 bps
5. Valuation
Fair Value Range Estimate (FY26 Projections):
| Method | Basis | FV (₹) |
|---|---|---|
| DCF | FY26 EPS ₹8.5, 15% discount | ₹330–360 |
| P/E Multiple | 45x FY26 EPS | ₹383–400 |
| EV/EBITDA | 20x FY26 EBITDA | ₹400–430 |
Fair Value Range: ₹360–430
Stock is currently around ₹381.
Is it expensive? Not yet. But market’s expecting flawless execution.
6. What’s Cooking – News, Triggers, Drama
- Q1FY26 Result: Revenue down, margin up. Management blames “seasonal effect + channel inventory”.
- New Client Wins: Expanding ODM relationships beyond RACs
- Backward Integration: Scaling component manufacturing = better margins
- IP Creation: Plans to design their own small appliance lineup
- IPO Hangover? Listed in Jan 2024; still under institutional microscope
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity | ₹52 Cr | ₹96 Cr | ₹96 Cr |
| Reserves | ₹261 Cr | ₹798 Cr | ₹861 Cr |
| Debt | ₹525 Cr | ₹386 Cr | ₹416 Cr |
| Total Assets | ₹1,425 Cr | ₹1,770 Cr | ₹2,018 Cr |
Key Points:
- Comfortable debt/equity (~0.48x)
- Asset-heavy due to in-house manufacturing
- ₹861 Cr in reserves gives ammo for capex
8. Cash Flow – Sab Number Game Hai
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | ₹17 Cr | ₹257 Cr | ₹31 Cr |
| CFI | -₹216 Cr | -₹377 Cr | -₹94 Cr |
| CFF | ₹239 Cr | ₹167 Cr | -₹29 Cr |
| Net Flow | ₹40 Cr | ₹47 Cr | -₹93 Cr |
Observations:
- Huge spike in FY24 CFO due to working capital efficiencies
- FY25: Capex phase cooling off, net cash flow negative but not alarming
- Debt-funded expansion under control
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 5.86% | 3.81% | 6.07% |
| ROCE | 10% | 8% | 10% |
| OPM | 6% | 8% | 7% |
| Debtor Days | 113 | 55 | 50 |
| Inventory Days | 75 | 116 | 117 |
Takeaways:
- ROE is still weak for a manufacturing-heavy business
- Inventory days creeping up = channel risk?
- But debtor days improving sharply = operational control
10. P&L Breakdown – Show Me the Money
| Year | Sales | EBITDA | PAT | EPS |
|---|---|---|---|---|
| FY22 | ₹916 Cr | ₹65 Cr | ₹24 Cr | ₹4.64 |
| FY23 | ₹1,520 Cr | ₹95 Cr | ₹31 Cr | ₹5.86 |
| FY24 | ₹1,420 Cr | ₹116 Cr | ₹36 Cr | ₹3.81 |
| FY25 | ₹2,171 Cr | ₹158 Cr | ₹58 Cr | ₹6.07 |
YoY growths:
- Revenue: +52.9% in FY25
- PAT: +61.1% in FY25
- EPS: Inching toward double digits by FY27?
11. Peer Comparison
| Company | CMP (₹) | ROE | OPM | P/E | MCap (Cr) |
|---|---|---|---|---|---|
| Voltas | 1377 | 13.3% | 6.4% | 55 | ₹45,563 Cr |
| Blue Star | 1845 | 20.6% | 7.3% | 64 | ₹37,942 Cr |
| Amber | 7603 | 11.2% | 7.3% | 105 | ₹25,762 Cr |
| Crompton | 344 | 17.4% | 11.3% | 39 | ₹22,139 Cr |
| EPACK | 381 | 6.3% | 7.8% | 62 | ₹3,658 Cr |
Conclusion:
Still a small cap baby among blue-chip cousins. But valuation is not cheap anymore.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 48.04% (stable)
- Public Holding: Up from 32% to 43% in last 4 quarters
- FIIs + DIIs: Dropping—maybe short-term fatigue post IPO?
Also…
- IPO was Jan 2024—listed at ₹230, touched ₹674
- Current price: ₹381
- Strong public interest = still widely tracked
13. EduInvesting Verdict™
Epack Durable is India’s ODM darling for ACs, growing rapidly with improving margins and backward integration. However, Q1FY26 shows the first signs of operational digestion after rapid scaling. The good news?
Margins held strong.
The bad news?
Demand might not be as sweaty-hot as 2024.
Watchlist-Worthy? Absolutely.
Noisy quarter or canary in the coal mine? Time will tell.
Metadata
– Written by EduInvesting Research | July 20, 2025
– Tags: Epack Durable, ODM Stocks, Q1FY26 Results, Air Conditioner Sector, Manufacturing, IPO Watch, Consumer Durables
