EPACK Durable Limited (EPACK) Earnings Call Transcript
October 30, 2026
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to EPACK Durable Q2 FY '27 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is now being recorded. I now hand the conference over to Mr. Tanay from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Good morning, and welcome, everyone, to EPACK Durables Q2 FY '27 Earnings Call. Today, we have the management being represented by Mr. Ajay DD Singhania, Managing Director and CEO; Mr. Rajesh Kumar Mittal, the Chief Financial Officer; and Mr. Nitin Gupta, GM Finance. At this point, I would hand over the call to Mr. Rajesh Mittal for his opening remarks, post which we will open up the floor for Q&A. Thank you, and over to you, sir.
Thank you, Tanay. Thank you all, and a very good morning. Welcome to our earnings conference call of the second quarter and first half of the financial year 2027. I would like to thank DAM Capital for arranging today's earnings call. The key financial highlights for the quarter 2 of financial year '27 are as follows. For the second quarter, revenue from operations stood at INR 439 crores when seeing a strong growth of more than 106% on a year-on-year basis compared to INR 213 crores in the corresponding quarter of the previous financial year. EBITDA for the second quarter stood at INR 7.1 crores compared to INR 0.5 crores in quarter 2 financial year '26, representing an improvement of INR 6.6 crores. EBITDA margin to [ 1.62% ] compared to 0.23% in the corresponding quarter of the previous year. I would also like to highlight an important regarding the comparability of EBITDA margins. The not exclude an ALI income in quarter 2 of the financial year '27 where plyincome of INR 8 crores in quarter 2 on year-on-year basis, which as in last quarter revenue and we could carry more associated costs directly followed and amounting to the EBITDA. Excluding the CLI income for the previous vending and EBITDA for quarter 2 financial year '26 have been negative INR 7.5 crores compared to positive EBITDA of INR 7.1 crores between the current. Accordingly, comparable base is excluding income. The company has achieved an EBITDA improvement of [indiscernible] on a year-on-year basis. reflecting an improvement in underlying operating performance. This will also hear that EBITDA margin does not include the -- if we know the ForEx loss, the EBITDA would have been improved by INR 10 crores on a half year basis. Now I would request Director and CEO, Mr. Ajay DD Singhania to brief you on the operational highlights. Over to Mr. Ajay.
Thank you Rajesh ji. Let me begin with a sales for marination in September quarter were better than last year. Last year, taconite destocking on GST transition was on the industry water has been competitor in terms of drivers. Second change has been made enter inventory with the comparable 1 industry, the team is making for the coming season. and we are seeing this in our consumer selling production. Commodity prices particularly in plus states the FX has been volatile throughout. Our contracts toasting this was that needed on sediment business are litigation State. We secured some comparison in the bid margins is actual and in the room as pacings. In large lines, working machines continue to grow ahead of or market driven by share for our dramatic inference. And I think the condition beyond smart appliances, it categories termite connote long brands as universities and brands to give me to give you those from a significant. -- encasement normalized plastic costs. This backbone please to share the impact to be able to deliver the event to [indiscernible] up 52% year-on-year. incinerator the [indiscernible]. The quarter also showed our diversification network, more domestic, it does figure like 50% washing machines and air travel growth not business can 3% of the revenue for this quarter. The half year SDA, NDA. Our business grew 58% in team, supported by share being with existing customers and we evolution on me. In second quarter, RSE revenue grew 161% on a base of last year raised the destock income in securities. Grew [ 4% ] in end in captive integration in the exchanges opportunities and motions. We now set December manage and attrition stepped down to 32% from [indiscernible] per year in FY '26. The EBITDA year becomes tower in nutrients adding new in includes priorities machines and the sites and the other products which are in Item subsites Normal last give us premium agitation prices. The next milestone is to an inspection for a for the end of November diversion. -- certain working in segment on market and this 1 product category market presence is the bone avenues. The fasting of quiet joint venture with a business. I also might be a 2 subsidiaries, mainly Adient component both recognized as any uptake facility in the incumbent on your business. Our share on rooms and in general in debates. Doing government, our tail and manage is be on edible margins in straightforward. Yes, selling them the top line showing a vetted and internally, we can use this asset in the half. There is being a back depreciation and international capacity, the land impacting to commodity costs of Le income. -- initially, not by any weakness or competitive. The facilities we build the silliest addition and support margin in private remains to first scale growth in sustained LNG share base while retinopathies, including front at and PPA and small domestic appliances did remain our faster growing and more smart expectation. Second, we bistatic partnership, additional peeped manufacturing partner, acromegaly categories we developed with. -- then go a margin and we line opportunity as we facilitate at some point. The utilization depends on value and dilution, and we go forward market -- we have almost a of new products and customer easements around near investment profitability. With this -- we now open the floor for Q&A.
[Operator Instructions] Te first question comes from the line of Tanay from DAM Capital.
I have a few questions, if I may. So the first I want to understand that, I guess, we've seen a very strong top and growth this quarter for RSE deals. Maybe if you can sort of have a break into value and volume for the quarter.
Overall, we see for of 2% on a very weak last I have a segment on a case about the invested tripped.
Yes. I mean to say the C, which we've done, if you can sort of help break down how much was it led by volume and how much was pricing benefit?
So the reason to have seen what the been approximately 15% to 28% in from our market -- so that some price increase, which has happened because of the commodity and the ForEx -- so overall pricing is very from 15% to 28% mode.
Sure, Sure. And so the other thing I would understand that as value take 15%, 20% price increase on margins we have seen a sharp contraction on a Y-o-Y basis. Can you maybe split the contracture into different pieces because 1 piece would be the under recovery of price hikes and the second would be also a portion of higher ASPs impacting your margins optically. So maybe if you can sort of help us understand what percentage of it to be taken versus the cost escalation which has been seen?
On this actually regulating last year H1, we have secured at a imagine in terms of looking an overall cut across as -- so if we will maybe gross margin are still a 2.4% is 2.8%. -- we like to like is the gross margins have improved, although there has been a lag in passing commodity it, but because of the once especially this is not a dominant or margins have actually increased.
And this is fair to say that the 15% to 20% size you take in sort of towers all the scationbil date?
What is going to come again?
I'm saying it's fair to say that the 15% to 20% price hike, which we've taken for our customers or of takes care of all the cost reasons?
Largely, yes. But like I mentioned in the laterites are not on creation as the volumes elect, but yes, in general, mostly based on our , any escalation or dealing commodity so in subsequent quarters. So that's an ongoing business -- but last year, yes, we segment to almost the brand customers.
Sir, other question was, obviously, we've been seeing a second far better -- so if you can sort of help us understand what are the current industry levels in terms of inventories at both brand in charter any indicative ? So a number or any indication is because sort of provide?
In terms of compare to last year because our scale we gain new business range being traded by that would be some of the questions we are looking at in improvement situation. And my guess like last I remember, we were talking about somewhere around like 5 to 6 million made towards the end of pieces condition lasted probably 3% lower. So at international based on the kind of outlook we have in Q3 and Q4 -- so the billion in Q4 is that gives us confidence that, yes, militia there's notable on it because the sales continue, we are at a lower level.
Sure. Sure. So the other thing was also -- we've seen our CapEx, which has been put over the last couple of years later. We always had a 400 sort of a plan in terms of expanding capacity. -- that stated into meaningful revenues for us yet. So on road map, let's say, for the next 3 to 4 years in terms of free bonding these capacities to think assets. And I think a lot of it is also for our sins how are we thinking about our applies in a brand for us as a partner over the next 2 to 3 years in terms of that we do scale up?
In terms of in effect accounts were to be made almost 6 months as we as that we were looking at a top close to INR 260 crores, of which 70% is what has been accelerated end of September. So -- and with this most everything has been already look to use and plants are largely done. The balance book will there segment in the next 6 to 12 months. That's the mine with them. And now the focus is very clear, like this range couple of on vendors and couple of. And also the focus is very clear. We are in that segment we grow. And the balance and a year was to not match and we did take on super rather than the growth in the test. So yes, -- the investment in HiSeis largely completed with announcement of fatalities in end of November. And the rest got which is now budgeted it wouldn't be seen the next 6 to 22% in a let's say on machines and look at new models but there are no significant investment plans in the mine.
[Operator Instructions] The next question comes from the line of [indiscernible] .
A couple of questions, sir. First, -- since this year, being the last year post PLI, how do you see margins going forward? Will we have to take further price to maintain margins ?
Last year and this year, currently were not gain any income in terms of -- so based on our current destitution and the industrial in done through the ins and the IT did amort, which was roles has largely remained unplanted because the distribution were there to be some extension happening. That's the same thing, yes. What would be income was largely passed on to the testers to be competitive EBITDA market. So GM's discussing about increasing the overall ops margin in the initiative has been it came to increase the prices but the discounts that we've given in terms of the ad. So -- in the medium term, I believe next year some normalization in untact the normalization will happen. And as we already discounts get reversed quarter-on-quarter.
Next question, sir. Could you please show a sales number from HiSense, and have you already talked with the in team, what are the response they're getting from the Indian markets?
Overall online event is port strong bank has already gained single market share in terms of using market brand in between -- so we see the current year being from them in the aside have already those interest from us in this year mentioned. So that is the overdone setting patients and the channels which we have created. And now the unmet that going forward in a sector tend to the number and our appreciation to standards in terms of outlook and the intent to all partner business.
Sir, could you please provide the sales number from an [indiscernible].
[indiscernible].
The next question comes from the line of Pratap Maliwal from Mount Intra Finance.
Congrats on a good top line on. So I just wanted to ask as to our overall debt on our balance sheet. If we look a period of power that will almost like our scale being to have this kind of debt. And so what is our outlook here of finance cost had been last, but also the monument had pointed that we can do better on this front. So can you just give me a yes going forward, how the debt levels will go -- debt levels or turnout.
Compared to last year in terms of the debt position, we get on this 2017 in the past comes -- but salarated the company has been equipment has in in terms of the reduction. And maintenance in 1 to be supplied and also close to INR 2.1 crores of payment is made to the tax the inventory we were reading this reduced inventory by INR 25-odd crores big capitalized in terms of the investments in the last quarter. So yes, the debt remains similar than indeed, but in terms of the plans of the [Technical Difficulty].
Tie up with the compression for this entire year, whatever you're going to manufacture fully.
Yes. So in terms of compression, the current domestic amicably with in India, we cannot largely done we can claim that in the sale line in terms of overall facial capacity available and the requirements. So we have tie-ups. We have already been securing some pressures from the 2 large players, highly and GCC and they have went up their capacity. So we don't see any shortfall we will work with them on a competitive basis.
What is the total volume you are expecting this year?
So AC market, the market is on a track to definitely grow this year. And our estimation is that for the complete year. you see industry is looking at the definite growth of anywhere between 20% to 25%.
No, for your volume, I'm asking for '27 -- FY '27.
We don't give propelling numbers, but looking at that for H1, you see business specialty has grown in value terms by almost 58% in volume term liquid have come by close to 40%, 45% as my estimate because there is increase in [indiscernible].
So you meant to maintain that 45%?
I mean we don't give forward-looking numbers, but yes, we are looking at the industry to grow and when we pretend as continuing its focus on increasing its share of business and on partnership with new toners, we definitely believe that we should outflowed.
Okay. I'm sorry, sir, I could not resend you properly. Anyway, alll the best.
The next question comes from the line of Rajiv Mehta from [indiscernible] Securities.
Sir, I mean your word is not very clear, but still, I'm going to ask you on margins. Sir, on the margin side, is there any pass-through lift from our side, our customer and which will reflect, say, from October onwards or in the second half. Is there anything -- is the lag pricing impact left for us, which will be reflected and will support a better margin trajectory in the second half of the year. And if you can also tell us what will be your explicit margin guidance for the whole year, maybe next year also so that we need to understand how the operating leverage, how the leverage at the PAT level earnings level we play out because we've been seeing that while the top line is increasing significantly but your EBITDA and your PAT numbers are -- have been not commensurately growing. So if you can just give us whether any margin parts left and what is your expanded margin guidance? And earnings growth guidance maybe next year, whether you will see earnings grow being better than top line?
Thank you pass through, yes, there is the patient still to go because this is an ongoing process. So at any given point of time in retential always be like -- because our pricing agreements with most of the large customers on the basis of quarter-to-quarter. So last the last quarters, price increase was passed on in the footer that's how it has been working in several past several years and for the trinity. So at any given point of time, yes, there will be some lag. But having said that, overall, there is not any significant gap left in terms of using on the commodity inflation to the brand customers that is point 1. So hearing like I shared earlier, the biggest land for us has really become the ForEx fluctuation which definitely is media of concern and we are working on it. So ForEx subscription is something which is a onetime and pay when the payments are made to the customer, the has been depreciating with regards to U.S., especially with regards to see is the media concern that we are keeping a bit continuous watch on it. So that is something that we need to definitely work into of [indiscernible]. Again, in terms of the outlook for the margin growth in the future, 2 areas I mentioned earlier on with our discipline on recurring the PLI discounts with a pass-on brands again as the romat in a phase manner, definitely, the margins would improve going forward. So that's when we see and we are working on. And to this product mix with especially the largest small domestic appliances being margin equated as the overall mix of the product is changing, definitely, that will also help us into over product margin. So in terms of outlook, though we cannot give any definitive number. But yes, which are put to 1 and on which we are working are rolling back the incentives of changes fast or to the brands and improving the overall product mix.
And sir, in line with the capacity expansion that we're doing besides Hisen. So whatever capacity tied up for Hisen will hopefully scale up. But for the other capacity, I mean, have we tied up with customers? How are you thinking about utilization of both capacity coming through in the next year or next to next year? What is the visibility on utilization of the upcoming capacity?
In terms of our existing capacity, especially in our previous 2 plants is namely Deharadun and [indiscernible] the capacity of the gear significantly much better, and we have been -- so those 2 plants have been delivering good capacity right for us and the revenue and the margin as men. But thus the challenge since last couple of quarters was always utilizing the CT capacity. Now on with hisense production commencing and now further at production machines as they are also ramping up the gaming connection in the India market. That will definitely help us improve city utilization. And then the sale and, as we move to the brand customers will put up capacities in that area are a reaches feel where in the capsaicin another set of businesses will commit to us down south. So this won't bite definitely see a better utilization of other newly created capacity at normal for us. And with that, we were on the overall asset to emission will be...
And do we get some money by divesting that 50% in the JV Ramtron would we get some consideration what will be that consideration? -- consideration.
Consideration what is that 50% stake in the INR 15 crore.
[Operator Instructions] . I now hand over to management for closing comments. Over to you, sir.
Thank you all for participating in the earnings earning call today. I hope we've been able to answer your questions satisfactorily. And thanks to DAM capital for organizing the conference today. Thank you all.
Thank you. On behalf of EPACK Durable and DAM Capital Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
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