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EPACK Durable Growth 2025 is on track to receive another ₹35 crore PLI (Production Linked Incentive) for FY25. The company continues to experience strong demand as the summer season picks up, despite challenges in compressor availability.
Key Highlights
- PLI Incentive: On track to receive ₹35 crore under the government’s PLI scheme for FY25.
- Growth Guidance: Maintains 37% revenue growth target with a 7.5% EBITDA margin for FY26.
- Industry Challenge: AC compressor shortage persists due to expired BIS certification on imports.
- Demand Outlook: Strong demand trends in the cooling sector, driven by extreme summer conditions.
- Q4 Impact: Faced supply chain constraints due to compressor shortages, affecting production output.
Revenue and Profitability Trends
Revenue Growth Analysis
- EPACK Durable has consistently expanded its revenue base, supported by:
- Increased demand for air conditioners.
- Government support through the PLI scheme.
- Expanding manufacturing capabilities.
Profitability & Margins
- Despite input cost fluctuations, EPACK Durable maintains a 7.5% EBITDA margin guidance.
- Higher operational efficiency and localization of components are expected to sustain margins.
Industry Challenges & Opportunities
AC Compressor Shortage
- The expiry of BIS (Bureau of Indian Standards) certification for imported compressors has disrupted supply chains.
- Indian AC manufacturers are facing production slowdowns due to the lack of key components.
- The government is working to accelerate approvals for new suppliers.
PLI Scheme Benefits
- The PLI scheme has been a significant growth catalyst for EPACK Durable.
- Incentives encourage local manufacturing, reducing reliance on imports.
Demand Surge Amid Heatwaves
- Extreme summer conditions in India are driving AC sales, benefiting manufacturers like EPACK Durable.
- The trend is expected to continue in Q1 and Q2 of FY25, further boosting revenue.
Market Position & Competitive Edge
- EPACK Durable is positioned as a key ODM (Original Design Manufacturer) for top AC brands in India.
- Investments in R&D and capacity expansion help the company stay competitive.
- Strategic partnerships with leading AC brands ensure a steady order pipeline.
Future Outlook & Investment Potential
Growth Projections for FY26
- Revenue is projected to grow at 37% CAGR, supported by:
- Higher AC penetration in Indian households.
- Expansion in production capacity.
- Localization efforts to reduce import dependency.
Risks & Challenges
- Continued supply chain disruptions could impact growth.
- Competition from global and domestic manufacturers remains a key risk.
- Fluctuations in raw material prices may affect margins.
Conclusion
EPACK Durable is well-positioned to capitalize on the growing AC demand and PLI benefits. While challenges like compressor shortages persist, the company’s long-term growth outlook remains strong. Investors should keep an eye on its revenue trajectory, supply chain resilience, and market expansion plans in the coming quarters.
Disclaimer: The projections of potential returns are based on current market conditions and company performance. Actual results may vary due to various factors, including market dynamics, economic conditions, and changes in the competitive landscape. Investors should conduct their own research and consult with financial advisors before making investment decisions.
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