Epack Durable Q1 FY27 Results (NSE: EPACK)
Signal: Margin pressure
The read
The operating recovery is not yet translating into earnings: consolidated revenue rose 33.8% YoY to ₹88,602.35 lakh, but material cost increased 37.8%, gross margin compressed approximately 159bps, EBITDA fell 6.0% and PAT fell 48.4%; the standalone-versus-consolidated gap and recurring qualified conclusion on ₹1,961.00 lakh of disputed receivables are the key thesis risks.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹886.02 Cr | 33.8% | +50.0% |
| EBIT | ₹40.11 Cr | -15.7% | |
| Net profit | ₹11.82 Cr | -48.4% | |
| EPS | ₹1.23 | -48.5% | |
| EBIT margin | 6.4% |
P&L walk
Consolidated revenue increased 33.8% YoY to ₹88,602.35 lakh, but gross margin compressed 159bps to approximately 14.1% as material costs rose to 82.61% of revenue, while EBITDA margin fell 181bps to 6.4%; higher finance costs, depreciation and a ₹229.18 lakh JV loss left PAT down 48.4% at ₹1,181.79 lakh.
Segments
The group reports one operating segment, but standalone PAT of ₹2,201.48 lakh was 86.3% above consolidated PAT of ₹1,181.79 lakh, with the gap reflecting subsidiary/JV drag including a ₹229.18 lakh JV loss.
Key positives
- Consolidated revenue increased 33.8% YoY to ₹88,602.35 lakh and 50.0% sequentially, recovering materially from the prior quarter's ₹59,104.68 lakh.
- Standalone EBITDA grew 5.5% YoY to ₹64.13 Cr equivalent despite 33.6% revenue growth, showing the parent business remained profitable even as consolidated earnings weakened.
- Gross margin improved approximately 79bps sequentially to 14.1%, although it remained 159bps below the year-ago level.
Key concerns
- Consolidated EBITDA declined 6.0% YoY while revenue grew 33.8%, and EBITDA margin fell 181bps to 6.4%, indicating that growth is currently margin-dilutive.
- Raw material cost rose to 82.61% of revenue from approximately 80.17% a year earlier; revenue growth of 33.8% lagged material-cost growth of approximately 37.8%, indicating incomplete cost pass-through.
- Finance costs increased 27.6% YoY to ₹2,021.91 lakh and depreciation increased 30.6% to ₹1,660.68 lakh, weakening EBITDA-to-PAT conversion.
- Consolidated PAT of ₹1,181.79 lakh was 46.3% below standalone PAT of ₹2,201.48 lakh, with the group result including a ₹229.18 lakh JV loss.
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