EPACK Durable Limited (EPACK) Earnings Call Transcript
August 12, 2026
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the EPACK Durables Limited Q1 FY '27 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to [ Mr. Manan Goel ] from ICICI Securities Limited. Thank you, and over to you, sir.
Thank you. Good morning to all. On behalf of ICICI Securities, we welcome you all to Q1 and FY '27 Results Conference Call of EPA Durable Limited. Today, we have with us senior management represented by Mr. Ajay DD Singhania, Managing Director and CEO; and Mr. Rajesh Kumar Mittal, CFO. Now I hand over the call to the management for their initial comments on the quarterly performance. Then we will open the floor for Q&A session. Thank you, and over to you, Mr. Rajesh sir.
Thank you, Manan. Good morning, everyone. Welcome to our earnings conference call for the first quarter of financial year 2027. I would like to thank ICICI Securities for today's earnings call. The key financial highlights for the quarter 1 of financial year '27 are as follows: -- for the first quarter under review, revenue from operations stood at INR 886 crores, which grew by around 34% on a year-on-year basis. During the current quarter, the company has not accrued any PLI income. However, the company had accrued the PLI income of INR 13.31 crores during the first quarter of financial year 2026. The EBITDA for the quarter was INR 55 crores increased by 0% on a year-on-year basis. The EBITDA margin reported at 6.21% as against 8.24%. The net profit was INR 11.8 crores. important comparability on PLI income. Before going further, I would like to flag one item that affects how should we read the margin comparison. The company has not accrued any PLI income in the current quarter of financial year '27, whereas we had accrued around INR 13.3 crores of PLI income for the previous quarter on a year-on-year basis. This margin was in the quarter revenue and because it carries no associated cost flowed almost entirely into EBITDA. If you strip that INR 13.3 crores out of both the revenue and EBITDA base for financial year 2026, last year, underlying EBITDA margin was closer to 6.4% and not 8.24%. On a like-to-like basis, our year-on-year margin improvement this quarter is closer to 15 basis points and not 203. Now I would request our Managing Director and CEO, Mr. Ajay DD Singhania, to brief you on the operational highlights. Over to you, sir.
Thank you, Rajeshji. Good morning, everyone. EPC Durable continues to strengthen its position as a leading living appliances original design manufacturer. While room night conditions remain an important part of our portfolio, we are steadily expanding into higher growth, better margin categories as part of our long-term diversification strategy. Over the last few quarters, we have made significant progress scaling our small domestic appliances and large domestic appliances as well as component businesses, which are seeing encouraging customer traction and growing order pipeline. This is gradually delivering a more balanced revenue mix and reducing our dependence on limited set of customers for finished product. Our focus remains on broadening the customer base, deepening relationships with existing customers, scaling new product categories, improving resilience, supporting margin stability, lowering the stage and building a stronger foundation for sustainable profitable -- as results are already shared by Rajesh ji. I'm pleased to report a strong start to FY '27, which company delivering its highest ever quarterly revenue of INR 886 crores with a growth of almost 34% year-on-year. This reflects healthy momentum across the portfolio. Our core RAC business continued to grow strongly, while small and large domestic appliances as well as components scaled up encouraging fees led by airfreight and motion machines. The growth was broad-based and reflects continued benefit of our densification strategy. We now serve more than 72 customers across 90 product categories, thereby sharply reducing our customer repetition and maturity derisking our revenue base even as absolute revenue from this customer has grown significantly. We have nice 2 new product categories in this quarter alone, while 4 new categs are in pipeline for later in the year. On ended side, our partnership prices continues to build well through the season of up to June, which is genuine, we produced close to 60,000 air conditions under this partnership. It contributed approximately INR 65 crores of revenue in just quarter 1 of this financial year. While the quarter saw some pressure on margin and premarin commodity and tenancy conditions, our focus remains on sustaining growth momentum by improving operating efficiencies and sending profitability as we scale. Our lead on quarter is straightforward. We are winning share, scaling the top line strongly and meet the profitability in held by the investment cycle and increasing food costs rather than by weakening in demand or competitiveness. The target is to convert this scheme due to operating leverage. Our priorities are to: first, scale the growth engines, sustain RFP margins while ramping washing machine and [indiscernible] which remains our fastest growing and more margin accretive. Second, deepen strategic partnerships and pushing peas preferred manufacturing partner across multiple product categories with our key customers, enabling deeper immediate and long-term content. Third, REBIT margin convert scale improved operating leverage as utilities absorb volume, localization deepens and our value addition and product mix normalizes towards higher margin categories. We have new product -- new customer pipeline across LDL components heading into the rest of FY 27, and we remain confident in long-term growth opportunity across our business, supported expanding product portfolio trending order book, new customer acquisitions and ongoing ability adventure. With this, we now open the floor for Q&A.
[Operator Instructions] The first question comes from the line of Sucrit Patil with Eyesight Fintrade.
I have 2 questions. The first question from Ajay is, so to understand the forward guidance. Beyond the regular outlook, what are the top 2 to 3 execution priorities you're focusing on in the next few quarters? And alongside that, what we see as the biggest risk in demand shifts, regulatory changes or competitive pressures? And how are you preparing to manage them by restraining EPA position in the appliance manufacturing? That's my first question. I will ask my second question after.
There's a lot of people in your voice or I think you are on the road or something.
Yes. I'll just repeat my question. Just want to understand beyond the regular outlook, -- what are the top 2 to 3 execution priorities we are focusing on in the next few quarters? And alongside that, what do you see as the biggest risk in demand shifts, the regulatory changes or competitive pressure and how are you preparing to manage them, why strengthening EPACK position in the appliance manufacturing -- just for understand all looking guidance on this -- that's the first question.
Although your question is not very clear. There's I think a lot of voice modulation is happening because of the background. I try to answer what I understood. So in terms of the outlook on the appliances industry, for the coming through 3 quarters, definitely, first of all, a condition is having -- the tailwinds will continue and we see long-term growth story for arenas our core manufacturing product category. On top of it, the other appliances in which we are expanding very aggressively, that is small in the large domestic appliances. Each of the newer categories, whichever we are heading, which is strong growth momentum a lot of customer traction. And as we continue to add newer customers across categories, we believe that the growth momentum for the smaller domestic appliances and especially for large mitigate Gas machine, there is a long-term growth potential and the growth momentum is going to be much more than even the issues.
My second question to Mr. Mittal is. From a financial point of view, what case risk or challenges do you anticipate in the coming quarters? And what specific measures are been taken to manage margins, cash flow and strengthen the balance sheet, especially in areas like raw material cost volatility, receivables or compliance?
The top line, you have already seen, we have gone about 34% in this current quarter. As far as the cash flow situation cash flow situation of the company is stable, and we don't see that there will be any requirement to increase our working capital or the requirement with respect to the point business. generally with respect to the cash-to-cash cycle, we have the working capital rate around 50% to 60% depending on the season of the company.
The next question comes from the line of Tanay Shah with DAM Capital.
Yess. I have a couple of questions and congratulations on a strong top line. I wanted to understand if you can break up the 44% growth that you reported in REC between volume and value.
So first of all, in terms of breakup, the total growth for RF reported approximately 30% of which is volume growth and 12% to 15% is typically the value growth in terms of the increased AOP and we pass on a commodity. So breakup of 44% is 30% volume growth and 14% value.
Sure. And sir, this 30% volume growth would be largely driven by our anchor customer, correct?
Absolutely.
Understood. And why we spoke about this 12% to 15% pricing growth, what percentage of pricing as to yet be or, let's say, the cost escalation yet has to be passed on in terms of pricing to our customers. which would then sort of normalize our margins?
Tanay, since we are doing -- it's contract wherein the prices are updated every quarter. So the price increase for the previous quarter was already passed on. And there's any significant this since then for the current quarter. So this is a thing remaining...
Sorry to interrupt, sir, your voice is picking up very -- Sir, your voice is breaking up every now and then I would request you to come closer to the microphone?
Tanya audible now?
Please start again, yes.
Okay. So Tanay, first of all, since basis our contract with the larger customers, the prices are updated every quarter. And hence, most of the price increase was normally passed on, where there is always a time lag between passing the price increase and when it actually impacts especially in the turbulence of the global supply in the global scenario, especially impacting Marcato there was a time where the price increase is not totally passed on. But yes, contractually, it is being passed on and there's hardly anything balance partners of now. What impacted us most for the last quarter was specialty ForEx exchange rate. So that is 1 line item we'd like to flag, which like the ForEx loss is something which has impacted us largely. But otherwise, most of the commodities upper timing is typically pass.
Understood. So you are saying that chunk of the pricing has been faster in terms of commodity increases and ForEx is something which impacted our margins.
Absolutely.
Understood. Sir, the other question which I had is now obviously, given that the season is largely behind us. what are the current inventory levels? Are they comfortable? Or any insights on that in terms of demand trends, inventory levels, et cetera?
So Tanay, I think, especially for the AC industry, this current situation is 1 of the most comfortable situation for the entire net point of view, especially from an good point of view. -- compared to last year were in BMTerewas a lot of pain in the industry because of the inventory overflow and the economy, I think this is 1 of the best year time where the trade has mostly liquidated inventory and the metals are at the lowest than the acceptable level. So my estimate here will be all put together, the trade and the brands and everything put together, the inventory level would be anywhere at INR 3.5 million to INR 4 million maximum. So inventory levels are lower than what actually is at this point of time.
Perfect. And 1 last is, how has our working capital and debt moved, let's say, between 4Q and 1Q year. Rajeshji, if you could possibly help us with that.
Already explained that the working capital days yes, because if you see in the first quarter, the working capital will be lower because we see the balance sheet is completely on a proportionate basis, particularly increasing the working capital with respect to API and it is coming around 60 days. And it was a little lower compared to the March, March...
Just to add on to Rajesh. Two things interesting to note here is especially on account of the BIS and the revisions which are happening, I think industry has communicated its pain that we have been carrying the elite inventory. So like at times, we have put the compression PLI getting amended and then again, we completed the timeline or the time available at the peak season mandates us to maintain more than the required inventory. So last few quarters, we see the inventory levels have been highly escalated on account of this. So this is one India, which has led to a de requirement of the working capital. So as to the season, definitely end of the season, again, I'm left with inventories because when we build up inventories in anticipation of the upcoming season, so for us, the key focus area remains from working at point of view, just to normalize the inventory currently. Inventories are at much comparable level as compared to the last year, but then still slightly escalated. So our efforts continue to normalize them as we move forward.
I missed it. Understood. And just on this note, since you mentioned about compressors, do you expect -- any sort of trouble, let's say, down the line into the new calendar year, given that the BIS would be expiring in March '27. Or do you feel like there is sufficient capacity to are coming on stream by the end of this year, which should take care of our domestic demand?
Especially in terms of compression, the QCO allows us to import for the next few months. But at the same time, the domestic capacity ramp-up has happened significantly and -- as an industry, we believe that there is sufficient capacity to cater to the industry for the coming season. So we don't see much of a challenge as far as compressions are concerned.
The next question comes from the line of [ Nishita with Safaya Capital. ]
I had a few questions. My first question is that in the presentation, you mentioned that our at lower and it's been impacted due to high depreciation and cost just wanted to understand, is the depreciation cost that we had in Q1, should we take the base of depreciation and finance costs for the whole year? Or is it going to...
Nishita to answer the questions. The Q1 numbers for the depreciation are more or less aligned on the risk -- it has increased as compared to Q4, because the new capacity have been good to use. So there isn't any significant CapEx in pipeline or CW in pipeline for the last of the year. So we can say assume that there is not any significant upside to the current depreciation level.
Okay. And what's about the finance cost?
Finance is cost has also gone up slightly because I know that there's a requirement with respect to the scale of the operations are compared we have seen a growth of 14% in the current quarter as compared to rent. Accordingly, there is an increase in the working capital requirement and the finance cost has also gone up by ground by around INR 3 crores to INR 4 crores as....
Like going forward, can we expect the tenders to come down?
Yes. As I was answering to the earlier question, for us, the area of improvement with regards to working capital finance first currently is the inventory -- I mean, normal inventory, where it has happened largely over last year got a bit , but yes, a lot of work still needs to be done this. So yes, there is an opportunity and scope to improve the finance costs.
Okay. Okay. Understood. Understood. And my next question is CapEx. What was the CapEx spending in Q1? What is it going to be for the whole year?
So for Q1 ended, there hasn't been any significant effect roughly enters is what has been booked -- and going forward, based on our earlier plans, which was announced last , we were looking at the total tax of around INR 550 crores, of which currently INR 330 crores to INR 340 crores has been already booked and INR 40 or 50 crores is something which is currently CW...
Ladies and gentlemen, the line management has dropped. Please stay connected while I get them reconnected. Thank you. Ladies and gentlemen, the management has been reconnected. Please stay connected. The management has got disconnected again. Thank you. Ladies and gentlemen, the management has been reconnected. Please go ahead with your question, Nishita.
Sir. Yes. So you were talking on a CapEX. You mentioned that we've already booked INR 40 crores to INR 50 crores in CWIP.
[Technical Difficulty].
Very good top line growth in Q1 around 34%. So what of growth can we see for the full year FY '27. And like is there any scope to improve our EBITDA margins from the current level? Or are they going to stay in the same range of 6% for the whole year?
So in terms of top line forward-looking numbers, as you know, we do or any forward-looking numbers. But yet, for AC, we are very confident that this year, the industry to -- so we would definitely surpass the industry growth as we have been in Q1. And our other sectors, our other product categories, the small and large domestic appliances are definitely putting in a much faster base. So yes, we are grew much faster, much better than the last year. On EBITDA side, currently, yes, 6.5% has been the typical EBITDA of PLI or excluding PLI for last couple of quarters. But here, the important thing to do is approximately 1.52% has been the PLI benefit, which was typically partly partial partly retained by the company. So since current year is the last year of PLI benefit available for EPACK. We have already started rolling back the PLI discounts or benefits that we were shared with the customer. And we are looking at almost completely reversing the PLI discount as on to the brand customers by the end of the year. So we are hopeful that by the end of the year, the that PLI discount would be reversed. And next year onwards, we will be able to see a normalized EBITDA.
The next question comes from the line of [ Rabindra Nayak with Nirmal Bang Securities. ]
Yes. So actually, in this quarter, what is the total volume that we have done in the first quarter. But if you can give the portability from the built-up unit and the indoor and outdoor nets, how much we have done in this quarter, the total INR 622 crores sales, that would be helpful. So I will come to the next question after that.
So revenue, we don't typically give out the number of units sold -- but like I was answering the idea question, in terms of the number of units soon, the growth for especially for...
Sir, I cannot listen properly is completely going not as of this hear you.
So in terms of the number of units, we have never historically given out the number of units sold data. But like I was answering the previous question, in terms of the number of units, the growth for last quarter is 30% vis-a-vis and overall revenue growth is 44% as far as the air condition is concerned.
Okay. And sir, regarding compressor issue you active question in the previous participant, but I cannot hear you properly. So can you please repeat your comment, what is the compression outlook for the industry? And what is the compressor for a for now for our requirement in '27. And 1 of your competitors has actually mentioned in the call that the ban is going to be affected from faster next year. So how we are placed for the compressor booking and how the industry is now placed for the compressor booking. If you can give us a comment that would be sir.
As far as compression is concerned, and the government has allowed import of compressors till end of this year. So that is when until the inputs can be done. At the same time, the domestic bases already installed and in pipeline, which we believe will be operational by end of the numbers. is mostly in line with the overall industry demand. Hence, we foresee any significant challenge in terms of procuring compressions. So we see that there is enough domestic capacity already installed and in pipeline, which is sufficient for the industry demand. To your next question in terms of per setting up competition capacity. We don't comment on PR strategy. But as far as Paxson is concerned, we are not looking at setting up any compression capacity in near term. And we believe that we have strategic tie-ups with both the large compression suppliers, and we will continue to harness our relationships with that.
Okay. Okay. And sir, the disputed sales receivable that you once growth, is it related to air conditioner right?
Will, can you please rise your question?
The disputed sales that is around INR 190 crores that you have reported in the notes on accounts, is it related to be can be some of the business side?
We are not extra able to understand.
Okay. So okay. Sir, regarding this I'm just coming to the light and domestic plants, small and large domestic appliances. Can you please give me the breakup of how much it is from the light and as all?
So sir, Mr. Rabindra what best I could understand your question is I think you are on loud speaker. So what the growth stick appliances for the last quarter is 68%. So there has been a growth of 68% in the small and large domestic appliances as compared to Q1 of FY '26.
The next question comes from the line of [ Ayush Jain with Equity Advisory Services. ]
I just wanted to know about the ex RC on outlook and capacity utilization for the whole year.
Yes. In terms of capacity utilization across 3 plant categories which we had Dehradun, Bhiwadi. For Q1, the Dehradun capacity utilization was closer to 90%. And as city is confirmed, we have seen a significant improvement in utilization of Sricity. So previously imported of less than 25%. We've achieved almost close to 50...
Pardon.
Closer to 50% is what we have seen in the utilization of city. The other 2 older plants that Dehradun for Q1 where the level was more than 85%.
Okay. And this is of ex RAC, right?
Including RAC.
I just wanted to know ex RAC actually.
There is no split because the manufacturing facilities are fungible. So it's not just the semi overall manufacturing because we have huge amounts of backward integration components getting manufactured within the same facility. So when we talk about utilization, we stock as a whole.
Okay. And this kind of level is sustainable for the whole year?
This is the Q1 number. Q1FY'27.
Yes, Q1 member in the outlook for the whole year, actually.
So last year's FY '26 numbers, the overall plant utilization of Divarian Dehradun again was close to 55%, and debt of solicity was there 25%.
So for this year, our outlook for FY '27.
So we are looking at overutilization of all the plants put together at more than 60%.
More than 60%, including Sricity?
Yes, the average utilization of all the 3 plants.
Okay. I'm just looking for operating leverage part of the city plant. If it goes above the 60% utilization of the whole year, there can substantial upside on both the top line and the bottom line, right? So how -- when can we expect the same for the social plan to really onboard on the company's accounts?
Ayush like a was mentioning, the ramp-up of Sussis gradually improving very fast. So compared to , we already doubling the utilization and the seasonal utilization at and the company with its current robust order book is very confident that the utilization is going forward, especially for Sricity where there has been concern over the last few quarters, improving significantly. And we overall anal utilization definitely achieving around 55% to 60% is 1 figure that we are targeting it -- and as we move closer to it this financial year, we will continue to monitor it and different increases. So the overall outlook of the company is to bring on the 3 plants improved utilization by the product mix, especially the non-AC business. So the whole idea behind ramping up the non-business is put utilization for the nonexecution this approach, we are very confident that the overall utilization of the 3 plants will grow significantly.
Okay. Okay. And then next question is on the line of prices, your JV with in coming up?
So in my opening remarks, like I mentioned, for the entire season, which is Jan to June, we delivered close to 60,000 air conditions to Hysan with 60,000 to Hysan. Capital volume for the first half, that is Jan June revenue of INR 120-odd crores from EC business along with Haysan and if we talk about just Q1, Q1, the volume was INR 35,000 with a revenue of INR 265 crores. So that was the total Haysan growth for AC business and for washing machine. As we have mentioned earlier, end of Q2 will be targeted where we believe the front-row machines, pilot production will start and we are on track to begin the washing machine production by end of October.
End of October. Okay. Hisense a lot of getting and about to their huge plans for India, right? So you've being a preferred partner with them. Do you see the top line to grow like 2, 3x in 3 years an your top line with Haysan?
Definitely is with -- especially with regards to Hisense, from the day we spent the MoU and all the announced till date we have done. We see that the growth in widen the time lines agreed are being geared largely and the plants are impacting in place. And as Hisense continues to grow into a larger significant appliances brand in country in line with their vision. We believe that our growth enable will continue, and we'll still newer rights at them in the coming years.
Okay. And then the last question is, since copper prices are increasing like anything, right? And it doesn't seem in the near term it will stabilize. So how do you hedge or do you do something with that keep preorder [Foreign Language] so you maintain inventory for the raw material or something like that.
As far as commodity is concerned, whether it is for a corporate many other commodities. -- we don't do any forward booking in anticipation about this other orders are confirmed some there's a back-to-back booking certain in line with the agreements. And whatever increase decreases over the quarter gets passed on in the next quarter. So as a company policy, we don't do any forward trade or unknown booking in anticipation of any profits. So we refrain from doing any without orders except.
[Operator Instructions] The next question comes from the line of Pratap Maliwal with Mount Intra Finance.
Yes, I just wanted to ask when we break up the revenues from the FCA. Can you tell me what the current revenue is from washing machine and how this is expected to scale up with the hyper production from Q2 earnings. That's my first question.
Okay. So I can answer your questions in a way it makes it simpler. The total revenue out of INR 886 crores, approximately INR 660 crores is something which comes from Romesand the balance is non-AC which is a mix of SBNA the component. So that's the uses answer I have. This is the number available with me currently. And I don't have the numbers right now with me, especially for Washing Machine. BD from across INR 80 crores last year has been INR 230 crores. So that's this small in our domestic appliances.
Yes. Sir, what I'm trying to understand, if I look at the last 2 quarters, Q2 has been loss-making quarters of the PAT level and the EBITDA margins have been 0%. Last 2 quarters, the September quarter if I look what I'm trying to understand now that they're getting into washing machines, which I believe would be higher margin, as you said, which should also reduce our seasonality in the top line and the margin accretive going forward structurally, can our Q2 September quarter become not just better in terms of top line seasonality and in terms of profitability as well on a structural basis is what I'm trying to understand.
Absolutely. I think the Pratap you're bang on year-over-year target. So yes, Q2 and Q3 historically has been the loss-making quarters because of the dependence on air conditions. So the entire strategy around LTA is first to neutralize the loss, and we are on track in terms of scaling up the watching machines and the other earlier businesses. And like I shared in our new remarks, we are constantly adding up newer tapers in BSD as well, which again the non-CC product. So as we continue our journey, we believe that over next 4 to 6 quarters, we should definitely see the bidding situations coming largely under control for Q2 and Q3. So washing machine definitely is a big lever for us in this journey. And as we see scaling up of casimachine currently, like especially Q2, as mentioned, are significantly good for washing machines in the other SDA categories. It is a journey which we have embarked, and we hope to see the results coming in line with what we are expecting over the next 4 to 6 quarters.
But this Q2, I believe you mentioned that we'll be doing the final production from the end of Q2. So for this current year, Q2, will it again, will we kind of lose all our margins and go into PAT negative? I'm not asking for the guidance, but any reduction on the Q...
In terms of Mashimachine, we are currently manufacturing the top load fully automatic, which is already under production, and we are serving 3 large national brands, mainland in this category. What I was mentioning, especially with regards to HiSeis the French washing machine. So that's 1 category in which probably we would be the 1 of the first started to manufacture front-looking machines as an ODM OEM. So that is something which is currently under pilot production. And we believe that, that is a category much more deferative and higher-priced category. Front load is something end of September and October is what we are targeting to start the mass production. The other categories, especially top load, fully automatic is already under production, and we have already seen some micro questions there.
Understood. So what I'm plan trying to understand our target for FY '21 that you've given, the INR 5,000 crore target, are we still on track? I mean, I know that Q1 was largely on track, but it requires a revenue CAGR of approximately 35% or more. So we should have a plan of significant scale of going ahead. So are we largely on track.
Yes. So we are largely on track in terms of our overall guidance that the seasonality impact needs to be minimized. And every quarter, we are looking at this -- we are working to achieve this scenario where every quarter is profitable or every quarter, the revenue mix is maintained.
Sorry to harp on the issue again. But Q2, do we anticipate being back positive. No guidance needed just directionally this to believe we can be that positive, which -- so we can see the results of the business model actually turning a on. So just any color there.
To an amount to a forward-looking statement, but like I think I already answered, is historical Q2 and Q3 have been the logins. And our efforts are on. We are working on this. It's a gene it will take some time. So 4 to 6 quarters, definitely, we believe we should be in a situation where we can completely stop build institution.
Okay. Understood. And just last question from my side. The depreciation input that you had given for the 9 was clear. I believe this quarter, we had INR 17 crores. Did you mention that we don't expect it to increase or just any detail -- to understand the outlook on that.
In terms of depreciation, yes, the current depreciation for Q1, we don't see any significant peers over the next 3 quarters. There is a marginal investment which will be booked every quarter. So overall, during the role balance 9 months of this year, we see an additional being booked of closer to INR 60 crores to INR 70 crores, which will be done then in part over each quarter. But yes, overall CapEx of INR 60 crores to INR 70 crores is in pipeline, which will get ultimately booked by end of this year.
Sorry, just 1 last question. What was the reason for the large drive in the other expenses over 5% ones this quarter?
Other expenses in other expenses. Increasing other exchanges as already mentioned by reason because in this in the current quarter product loss, which has been powered in the books that is around INR 6 crores to INR 7 crores. There is no other reason.
The next question comes from the line of [ Karan Gupta with Asset Investment. ]
Again, on the other expenses part, I couldn't hear properly. So what was the reason for the...
Other expenses has gone up, but billion around INR 7 crores for now on a quarter-on-quarter basis. And because you know that the sales value as the production value of the company has grown up by more than 35% overall. Accordingly, the resin cost has gone up.
Okay. Resins cost gone up. Okay. Okay. Okay. The second 1 on the channel inventory. Last quarter, you said that most of the old rated inventories are in the channel and -- and you don't have any old related ACs, room ACs now? So this growth is purely the new rated as per the BE norms compliant products, right? As you said, 44% of growth, right? And what was the -- at the channel end the channel and growth or the old rated products are already flushed out or it is already over its in the channel inventory? So new growth is new rated or what?
Okay. So Karan, first of all, to answer your question, as a manufacturer, we are mandated to start production of new -- the new BE rated products with the fact of first of January. So yes, the entire growth both for last quarter as well as the Q1 quarter is attributed to the new rate aqueduct. So the manufacturers were not allowed to manufacture anything operated since beginning from first of January '26. Attributed to the new rated product on. In terms of channel inventory, the channel was allowed to sell old-rate product till end of June. So based on our undersense it's purely an understanding an estimate, we believe that channel has largely liquidated the entire lited product, and this is why there has been a growth of the new related product. So our estimation and approximation is that, yes, the old ended product has been mostly fluoro inventory. If somebody somewhere has something, I can't estimate. But yes, largely, it has been because for the past 6 months, the new rate products were fully manlectured and sold to bet. So I hope that answers.
Yes, yes. Fair enough, enough. On the SA LDA side, again, on the overall inventory, what is the inventory in the quarter -- just to understand inventory buildup is happening on the SBL side. Yes.
So Karan for SDA and LDA, it's a very large category with more than 100 SKUs. So you have thousands of SKUs in HD and SG Katie together. And Typically, as you all know, the festive season is the season, so it's October, November is the season where in the tire happen. So my only estimate or my only answer that this is the time where in the ramp up, the stock inventory building is happening with these product categories. Any single category for any single SKU for this project category. I think is beyond my estimation because there are 1000s of....
No. I mean non-AC inventory or any inventory that's typical bifurcation on broadly.
My only -- okay, -- to answer your question as far as EPACK is concerned, our in-house inventory, again, because 1 category, which is larger and more in terms of value, both in the dependence on imports still we have got of commodities yet. So our in-house inventories probably 70% to 70% could be set and 30% would be the normal inventory. So that's the only kind of number, I think I can share with you.
Non-AC.
Yes, 25% to 30% only.
Okay. Okay. On the margin side, this product -- as you said, using machine in the LD side is comparatively higher margin. But overall, SDA, LDA and components segment, because now the SDL component is, again, 1/3 of your overall pie, what we can do from here on to reduce the sisality in quarter to quarter 3, we need to ramp up this portion of the pie higher than the AC side. Right. So just to understand the margin file of these 2 segments and what you can expect next quarter, overall FY '27, the growth of this segment. And also you can share the reason of components, the growth of 23%?
So Karan, first of all, yes, I acknowledge that the over margins as far as nonescategory, both DALE is concerned. So SDL is comparatively more than that of by almost, let's say, 1.5 to 2 basis points. So that's the additional kind of gross margin. It's not an EBITDA level because EBITDA is a blended EBITDA and a lot of manufacturing facilities are shared. But at gross margin level, yes, the SDLG gross margin is typically 5 to 2 basis points more than the -- and hence, our entire focus on improving SBAT is driven by the fact. And as we continue the growth journey for FDA, we are again reaffirming that like we have done almost close to 16% growth in NDA, the nonbusiness over last quarter. our growth momentum is going to be much more as compared to AC. So AC definitely continue to grow, but at the same time, we see the larger scope of growth in SDL in Morgan particular.
Okay. And the component part degrowth?
PComponent excel, we keep growing. Currently, components catered are largely AC components, controllers and crossovers and cooperative bins. So they, again, are kind of seasonal. So again, we are exploring opportunities to cater to noncomponent but currently, yes, is in line with the basic site. .
Okay. Okay. And the last 1 on the side, how many OEMs as a customer we acquired because this particular segment is again consumer durable part is, again, very competitive as multiple players in the segment also. So just wanted to know how much -- or how many customers that we are acquiring or growing our customer base in the SDA segment?
So as you can see in our investor deck, closing of FY '26, we had 72 customers all put together, we'll see the nonsyndicate we have added customers, there are pleomorewhiare in pipeline. So currently, as it new have posed to 73 customers and 19 product lines are already productionized and 2, 3 more lines for which has -- the pilot production line. So -- by end of this year, we are looking to have close to 75 customers and 20 product lines.
The next question comes from the line of [ Ayush Jain with Equity Advisory Services. ]
My questions are already answered.
The next question comes from the line of Ganesh an Individual Investor. Sorry to interrupt, you are not audible. Please speak a little louder.
Yes. sort for the excellent set of top end. My first question is on this reason to your [indiscernible] package Andhra Pradesh. Can you throw some -- already we have spent a substantial amount from Nov '24 I guess.
Not able to hear you.
Sir, can you able to hear me now?
Yes.
Sir, my first question is on this recent MoU from Andhra Pradesh for the [indiscernible] package. Can you throw some light on that, sir?
With regards to our MoU with the Andhra Pradesh government, the MoU is about the investments we have committed over next starting, which is effective until -- so that's amounting of INR 185 crores, beginning the investment recognized this from beginning of 24.
Okay. Okay. For INR 1,000 crores capital strict?
Yes, INR 1,085 crores. We have been -- we have already been alerted a land of close to 35 weeks, and we are looking at ramping up newer capacities as we move forward. So that's something in the pipeline, not in the immediate term future more nominal...
Okay. Okay. SP1 As like I schemes will be getting benefited from for next course of 2 years, sir?
So this is a state incentive development from state of Apadapproximately not exactly, but approximately 50% of CapEx, which will flow back as a subsidy over the next 10 years in the subsidy. So there is a state government which refunds closer to 50% of the total CapEx as investment subsidy over 10 years.
Okay. Okay. Okay. And second question is on the EBITDA margin side. EBITDA margin, as we -- I think as you stated earlier, it was a 1.5% project antisatedwithout PLA. -- an RPA aspiration EBITDA level?
Yes. So Ganesh, the current EBITDA without PMI is closer to 6.5%. And we get a P income, which is particularly share between SMB customers. So -- over the last -- since we have been getting PLI for the last 2 years, we have been sharing on 5 figures. So almost 1% was coming to us and 1 person was getting passed on to the customers. So like I mentioned in my earlier question, we have already started initiating the customers are ruling back the PLI discount. And we are working in a condition where in by end of this year, we should be able to roll back the entire PLI discount, which has been passed on to the...
Okay. Okay. So whether we are living, I think FY '27 last year for a PMLI.
So it is in the current year were last year.
Okay. Okay. Okay. And then we have project we have presented that this INR 8,000 crores revolution items would be for the next 3, 4 years, right, this sale can we expect FY '27, we can be pace...
As already mentioned, we have invested a recount -- and we have mentioned in the deck also total instrument was around INR 450 crores to INR 470 crores. And the remaining investment we will be doing in the current financial year. we are only having around INR 60 crores in WIP, which will get capitalized in the next 2 quarters.
Okay. Most of my question is on the revenue from a specific the Zydis plant. We are projecting around INR 8,000 crores from next year. With this scale, would we be able to achieve this INR 5,000 crores target by FY '28 -- it's just an aspiration I'm asking.
Total expected revenue prices...
Yes, I am not I'm sorry to say not audible, please come a little closer to the microphone.
Yes, -- the expected revenue from ship was INR 8000 crores in 5 years. So FY '26 '27 being the first year over sort of cumulative over the next 5 years is what we are expecting to cross INR 8000 crores with AC and other appliances, working machines and all put together. So that's a 5-year cumulative revenue, what we had expected from Hisense current year, April '26, '27 in the first year. And whatever was estimated for the first time, we are largely on it, and I shared the numbers in the previous question. that for this calendar as we have already done close to INR 220 crores of revenue with it. We have already sold to 6,000 ACs to them. Yes, we are largely on track for the current calendar year. And totally next 5 calendar years, the revenue expected from Icon's partnership with INR 8,000 crores.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for the closing remarks.
Thank you all participating in the earnings con call today. I hope you've been able to answer the questions satisfactorIly. I again thank ICICI for arranging this earnings call today. Thank you all.
Thank you, sir. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.
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