The shares of the second largest room air conditioner Manufacturer hit 5 percent upper circuit after the company announced a partnership to setup an advanced dedicated manufacturing facility in India.
With a market capitalization of Rs 3,911.64 crore, the shares of EPACK Durable Ltd were trading at Rs 407.60 per share, increasing around 5 percent as compared to the previous closing price of Rs 388.20 apiece.
Reason for rise:-
The shares of the company have seen positive movement after EPACK Durable Ltd announced a partnership to set up an advanced dedicated manufacturing facility in India to produce Hisense range of Air conditioners and Home Appliances using Hisense’s proprietary technology & designs.
Moreover, EPACK Durable Limited will invest in advanced production lines for air conditioners and home appliances under a new agreement with Hisense. Leveraging its expertise and existing infrastructure, EPACK will manufacture key components and products, while Hisense contributes technological expertise and premium design capabilities.
Additionally, EPACK Durable’s partnership with Hisense will expand global reach by manufacturing products for both the Indian market and international strategic markets. This cooperation is expected to generate an additional $1 billion in revenue over five years, strengthening their positions in the global home appliances market.
Financial Analysis:-
Examining the company’s financial performance, revenue magnified by 77 percent from Rs 437 crore in Q1FY24 to Rs 774 crore in Q1FY25, and during the same time frame, net profit zoomed multifold times by 155 percent from Rs 9 crore and Rs 23 crore.
Acquisition and Expansion:-
EPACK is acquiring a 50% stake in Epavo, a BLDC motor company, with a new facility under construction to start mass production by year-end. Epavo will produce BLDC motors for ACs, ceiling fans, and HVLS fans, managed jointly with Ram Ratna Wires Limited under equal equity.
Future Outlook:-
The company anticipates 45%+ revenue growth this financial year, driven by an expanding product portfolio with new launches like washing machines, air fryers, and hair dryers. With low AC market penetration in India and ongoing R&D, the company expects continued product innovation and market growth.
Margin and Cost Analysis:-
The company’s margins have been affected by fluctuating commodity prices, but stabilization is anticipated in upcoming quarters. Finance costs are expected to decrease in Q2 and Q3 due to lower sales, while gross margins are projected to remain consistent with FY24 levels.
Company Overview:-
EPACK Durable Ltd is a leading Original Design Manufacturer (ODM) that manufactures room air conditioners. EPACK Durable Ltd also manufactures critical components such as sheet metal, injection molded parts, cross-flow fans, and PCBA components.
Written by:- Abhishek Singh
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