This article first appeared on GuruFocus .
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Revenue (Q2 FY27):INR439 crore, up 106%+ YoY vs INR213 crore in Q2 FY26.
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Revenue (H1 FY27):INR1,325 crore, highest ever first half, up 51.3% YoY.
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EBITDA (Q2 FY27):INR7.1 crore vs INR0.5 crore in Q2 FY26; improvement of ~INR6.6 crore.
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EBITDA Margin (Q2 FY27):1.62% vs 0.23% in Q2 FY26.
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PLI Income:Nil accrued in Q2 FY27 vs INR8 crore in Q2 FY26 (which directly flowed into EBITDA).
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EBITDA Ex-PLI (Q2 FY27):Positive INR7.1 crore vs negative INR7.5 crore in Q2 FY26; comparable improvement of ~INR14.6 crore YoY.
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Like-for-Like EBITDA (H1 FY27):Grew 77%.
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Non-RAC Business Revenue:Contributed 63% of Q2 FY27 revenue.
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SDA & LDA Revenue:Grew 57% in Q2 FY27; 62% in H1 FY27 (washing machines and air coolers led growth).
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RAC Revenue:Grew 61% in Q2 FY27 (partly on low base); 58% in H1 FY27.
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Components Revenue:Grew 45% in Q2 FY27.
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Customer Base:72 customers across 19 categories; top-2 customer concentration reduced to 32% from 72% earlier in FY26.
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Epavo JV:50% stake transferred to Ram Ratna Group; share of losses was INR12 crore for FY26 and H1 FY27.
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Subsidiaries:Winding up Bumjin India Audio Products and EPACK Electronic Components (no operating facilities).
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Release Date: October 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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EPACK Durable Ltd ( NSE:EPACK ) reported a 106% YoY revenue growth in Q2 FY27 to INR439 crore, with H1 FY27 revenue up 51.3% to INR1,325 crore, the highest ever first half.
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EBITDA improved significantly to INR7.1 crore in Q2 FY27 from INR0.5 crore in Q2 FY26, and excluding PLI income, EBITDA improved by INR14.6 crore YoY, reflecting stronger underlying operations.
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Diversification efforts are paying off: non-RAC business contributed 63% of Q2 revenue, with small and large domestic appliances growing 57% and components growing 45%.
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Customer concentration has reduced, with top 2 customers now at 32% of revenue (down from 72% in FY26), and the company now serves 72 customers across 19 categories.
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The company is expanding its product portfolio and partnerships, including front-load washing machine production for Hisense starting December 2026, and has a robust pipeline of new products like monsoon heaters and air purifiers.
Negative Points
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EPACK Durable Ltd ( NSE:EPACK ) continues to face margin pressure, with EBITDA margin at 1.62% in Q2 FY27, though improved from 0.23% YoY, but still low compared to peers.
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The company reported a ForEx loss of approximately INR10 crore in H1 FY27, which impacted gross margins and profitability.
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There is a lag in passing through commodity cost increases to customers, which compresses margins, especially in a volatile commodity price environment.
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PLI income, which contributed INR8 crore in Q2 FY26 and INR30 crore in H1 FY26, was not accrued in Q2 FY27, and the future of the PLI scheme is uncertain, potentially affecting margins.
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The company's debt position remains high at INR770-775 crore, and finance costs, though stable, continue to weigh on profitability, with no significant reduction expected in the medium term.
Q & A Highlights
Q: With PLI benefits ending this year, how do you see margins going forward? Will further price hikes be needed to maintain margins? A: Ajay Singhania (MD & CEO) said this is the last PLI year for EPACK Durable, and no PLI income has been accrued in Q2 FY27. The company has represented to the Ministry and DPIIT for an extension, given that roughly INR5,000 crore of the AC PLI budget remains largely unutilized. Historically, PLI income was largely passed on to customers as discounts to stay competitive; these discounts will be reversed quarter-on-quarter, supporting margin normalization from next year onward.
Q: Despite strong revenue growth, why are your margins the lowest in the peer group (around 6% versus 8%-9% for peers), and what can be done to improve the margin profile? A: Ajay Singhania (MD & CEO) acknowledged margins are stressed, partly due to the large backward-integration investments and their associated costs, and because Q2 is seasonally weak for an AC-heavy company. He expects normalization as new capacities are utilized and the non-AC mix risesSDA and LDA now contribute about 63% of Q2 revenue, up from roughly 45%with washing machines and small appliances being more margin accretive.
Q: Is any commodity cost pass-through still pending, and what is the margin and earnings outlook for H2 and next year? A: Ajay Singhania (MD & CEO) said pricing agreements with large customers are set quarter-to-quarter, so some lag always exists, but no significant gap remains in passing on commodity inflation. The biggest drag has been ForEx fluctuation (about INR10 crore loss booked), which cannot be passed on in real time. Margin levers are the phased rollback of PLI discounts given to brands and an improving product mix; no definitive guidance was provided.
Q: Can you break down the RAC revenue growth into volume and pricing? A: Ajay Singhania (MD & CEO) said RAC revenue grew 160% year-on-year in Q2 (from about INR61 crore to INR161 crore) on a weak base. Pricing rose approximately 15%-20% model-to-model due to commodity and forex movements; for H1, RAC value growth was 58.4%, with volume growth estimated at 40%-45%.
Q: On a like-to-like basis, have gross margins actually improved given the sharp YoY contraction reported? A: Ajay Singhania (MD & CEO) clarified that excluding PLI income (INR8 crore in Q2 FY26 and about INR30 crore in H1 FY26), gross margin improved to 12.8% from 12.4% last year, helped by model mix toward SDA and LDA. The reported optics were also dented by the roughly INR10 crore ForEx loss; without the pass-through lag and forex loss, margins would have been meaningfully better.
Q: What are the current channel inventory levels for the AC industry? A: Ajay Singhania (MD & CEO) estimated trade inventory at roughly 40%-50% lower than last year, when about 5.5-6 million units were stacked up at the end of Q2 due to unseasonal rains. Healthy secondary sales and a good pull in Q3/Q4 give confidence that channel inventory is at a comfortable level, providing a clean starting point for the coming season.
Q: What is the status of the Hisense partnership, including sales and the washing machine ramp-up? A: Ajay Singhania (MD & CEO) said Hisense sourced close to 18,000 air conditioners in H1 FY27, its first year as a mass player, with H1 revenue of approximately INR90 crore. For front-load washing machines (technology transferred from Hisense), pilot production is ongoing and will be completed by end-November 2026, with mass production starting December 2026taking the Sri City subsidiary from a single product to multiple categories.
Q: What is the debt position and finance cost outlook given the strong growth projected? A: Ajay Singhania (MD & CEO) said gross debt stands at about INR770-775 crore, roughly 0.8x equity. In Q2, inventory was reduced by about INR125 crore and roughly INR225 crore was paid to suppliers. About INR100 crore of the planned capex remains, to be staggered over 6-12 months, with no significant new capital raise planned. Absolute finance costs have stayed flat YoY despite revenue doubling, and better payment terms in SDA/LDA should keep working capital requirements within current limits.
Q: Why is EPACK exiting the Epavo Electricals BLDC motor joint venture, and what is the consideration? A: Ajay Singhania (MD & CEO) said the 50% stake is being sold to Ram Ratna Group (RRWL) for INR15 crore, framed as capital discipline rather than a retreat. Epavo posted losses of about INR12 crore over FY26 and H1 FY27, reducing its equity from about INR22 crore to INR10 crore. EPACK retains in-house capability for controllers, heat exchangers, cross-flow fans and moldings, and can source motors from multiple suppliers while continuing to co-develop customized BLDC motors with Epavo.
Q: What is the capex roadmap and visibility on utilization of the newly created capacity? A: Ajay Singhania (MD & CEO) said of the roughly INR270 crore capex announced about 18 months ago, about INR170 crore has been spent through September 2026, with the balance INR100 crore to be staggered over 6-12 months for washing machine capacity and new AC models. The Dehradun and Bhiwadi plants are running at good utilization; the newer southern capacity should ramp with Hisense production and additional business from brand customers setting up in the region.
Q: How is the compressor supply situation for the full year? A: Ajay Singhania (MD & CEO) said India is now largely self-reliant in compressor capacity, with tie-ups in place with the two large domestic players, Highly and GMCC, who have ramped up capacity. No shortfall is expected, and sourcing will be done on a competitive basis.
Q: What is the outlook for the AC industry
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
