Epack Durable Q1 FY27 Earnings Call — Analysis (NSE: EPACK)
EPACK Durable delivers record quarterly revenue of ₹886 Cr (+34% YoY) driven by RAC volume growth and sharp SDA/LDA ramp-up; underlying margins steady as PLI absence masks the true picture and management targets full PLI discount rollback by FY27-end to unlock normalized EBITDA.
Result quality: watch — Margin pressure. Management sentiment: optimistic.
The take
Q1FY27 Revenue from operations ₹886 Cr ( +~34% YoY ) . New guidance — FY29 fy29 revenue target ₹5,000 Cr . New story: Revenue diversification beyond RAC .
Results
Q1FY27 revenue ₹886 Cr, +34% YoY; EBITDA ₹55 Cr, +0.7% YoY; reported margin 6.21% vs 8.24% (adjusted for nil PLI, like-to-like margin improved ~15 bps); net profit ₹11.8 Cr.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue from operations | ₹886 Cr | +~34% | yoy · Q1FY27 |
| EBITDA | ₹55 Cr | +~0.70% | yoy · Q1FY27 |
| EBITDA margin | 6.21% | -203 bps | yoy · Q1FY27 · Reported vs 8.24%; ex-PLI like-to-like margin ~6.21% vs ~6.4% |
| Net profit | ₹11.8 Cr | point_in_time · Q1FY27 · No YoY change stated; Q1FY26 net profit not disclosed on call | |
| PLI income accrued | ₹0 Cr | point_in_time · Q1FY27 · Q1FY26: ₹13.31 Cr; nil this quarter as no PLI accrued |
Guidance
PLI discounts passed to customers to be fully reversed by FY27-end, enabling normalized EBITDA from FY28; overall plant utilization targeted above 60% in FY27.
What management committed to
- PLI discounts passed on to brand customers will be fully reversed by the end of FY27. — fully reversed, FY27
- Normalised EBITDA (without PLI drag) to be visible from FY28 onwards. — normalized EBITDA, FY28
- Overall capacity utilisation across all three plants will exceed 60% in FY27. — more than 60%, FY27
- [EPACK] will achieve 75 customers and 20 product lines by the end of FY27. — closer to 75 customers and 20 product lines, FY27
- Front-load washing machine mass production will start by the end of October 2026. — begin, Q3FY27
- Depreciation will not see a significant increase over the next three quarters of FY27. — no significant increase, Q2FY27–Q4FY27
- Additional capex of ₹60–70 Cr will be booked for the balance of FY27. — ₹60 crores to ₹70 crores, FY27
- The cumulative revenue from [EPACK's] Hisense partnership will exceed ₹8,000 Cr over 5 calendar years starting FY26-27. — INR8,000 crores, FY31
- [EPACK] remains on track to achieve the INR5,000 Cr revenue target by FY29. — INR5,000 crores, FY29
Key themes
Revenue diversification and PLI roll-off margin recovery
How the narrative shifted
- Revenue diversification beyond RAC: Management positions SDA, LDA, and components as faster-growing, higher-margin categories that de-risk the business from RAC seasonality and customer concentration.
- PLI benefit expiration & margin normalisation: The company is actively unwinding PLI discounts shared with brands; full reversal by FY27-end is presented as the key unlock for EBITDA margins reverting to a sustainable band.
- Hisense strategic partnership scaling: The collaboration is on track in both AC (60,000 units Jan–Jun) and washing machines (front-load pilot Oct-2026); cumulative ₹8,000 Cr target over 5 years emphasises long-term anchor-customer visibility.
- Capacity utilisation and operating leverage: Sri City utilisation doubled QoQ to ~50%; management expects combined utilisation to cross 60% in FY27, converting fixed-cost absorption into margin gains, especially as non-AC fills the seasonal trough.
- Working capital & inventory normalisation: Inventory levels remain slightly elevated due to pre-building for BIS/QCO transitions; working capital days at 50–60; management aims to normalise stock, which would reduce finance cost.
- Commodity and forex headwinds: Quarter-on-quarter commodity costs are contractually passed through, but forex losses (₹6–7 Cr) emerged as a one-off drag without corresponding pricing protection, compressing reported margins.
- Industry tailwinds & inventory health: RAC industry seen growing ~20% in FY27 with channel inventory at a multi-year low (3.5–4 mn units) and old BEE-rated stock largely flushed out, supporting fresh order flow.
Operational commentary
- Non-RAC (SDA + LDA + components) revenue ~₹226 Cr; SDA/LDA segment grew 68% YoY, driving mix shift.
- Capacity utilisation: Dehradun & Bhiwadi plants >85% in Q1, Sri City improved to ~50% vs <25% earlier, fuelling operating leverage outlook.
- Hisense partnership: 60,000 ACs delivered Jan–Jun (~₹120 Cr); Q1 contribution 35,000 units / ₹65 Cr. Front-load washing machine pilot production on track for Oct 2026.
- Customer & product expansion: 73 active customers across 19 product lines; 2 more customers in pipeline, target 75 customers / 20 product lines by FY27-end.
- Working capital: inventory slightly elevated due to pre-building for BIS/QCO compliance; focus on normalising stock levels to reduce finance cost.
- Commodity & forex: contractually prices are reset quarterly; forex loss of ₹6–7 Cr booked in other expenses was the primary unhedged margin drag.
Analyst Q&A
Q. Will Q2FY27 be PAT-positive, signalling a structural turn in the business model?
That would be a forward-looking statement. Historically Q2 and Q3 have been loss-making quarters. We are working on this and expect the bleeding situation to come largely under control over the next 4 to 6 quarters.
Q. Details on the disputed sales receivable of ~₹19 Cr noted in the accounts
Management was unable to hear the question clearly and did not provide an answer despite the analyst repeating.
Q. Can we expect 35%+ revenue CAGR to achieve the INR5,000 Cr target by FY29?
We are largely on track in terms of our overall guidance. Every quarter we are working to minimize seasonality and maintain the revenue mix.
Q. What is the split of the 44% RAC growth between volume and value?
Approximately 30% volume growth and 14% value growth (price pass-through).
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