EPACK Durable reports 35% revenue growth in Q3 FY25 amid strong market demand

EPACK Durable Limited, a leading original design manufacturer (ODM) of room air conditioners and small domestic appliances in India, has reported a 35% year-on-year increase in revenue for the third quarter of fiscal year 2025 (Q3 FY25). This strong growth reflects the company’s ability to expand its customer base and capitalize on rising demand across its product categories. Despite the revenue surge, net profit declined by 49% YoY, primarily due to higher costs associated with its new Sricity manufacturing plant, which has not yet reached full capacity utilization. However, quarter-on-quarter EBITDA increased by 150%, driven by an improved product mix that enhanced gross margins.

How Did EPACK Durable Perform in Q3 FY25?

EPACK Durable’s Q3 FY25 consolidated revenue stood at ₹3,768 million, representing a 35% year-on-year growth. The company reported an EBITDA of ₹240 million, reflecting a 1.3% YoY increase, but more significantly, a 150% rise from the previous quarter. The EBITDA margin for the quarter was 6.4%, down 212 basis points (bps) YoY, but improving 382 bps QoQ. Net profit for Q3 FY25 came in at ₹25 million, marking a 49% YoY decline, although rising 129% QoQ.

Despite the profitability challenges, EPACK Durable demonstrated strong topline growth, driven by its strategic market expansion and growing customer demand. The company’s nine-month revenue for FY25 reached ₹15,276 million, reflecting an impressive 71% YoY increase. This long-term revenue trajectory underscores the company’s position as a key player in India’s growing ODM market.

What Are the Key Drivers Behind EPACK Durable’s Revenue Growth?

Strength in the Room Air Conditioner Market

The room air conditioner (RAC) segment remains EPACK Durable’s largest revenue contributor, accounting for 66% of the company’s total product revenue in Q3 FY25. This segment saw 37% year-on-year growth, highlighting increasing consumer demand and the company’s ability to secure new customers. EPACK Durable’s strong design and manufacturing capabilities allow it to develop customized air conditioner models tailored to the specifications of leading brands.

Customer Base Expansion and Product Innovation

EPACK Durable continues to diversify its client portfolio, strengthening its position as a preferred ODM manufacturer for air conditioner brands. By leveraging its expertise in design, product customization, and efficient manufacturing, the company has attracted several new customers across different segments. Its ability to provide tailored solutions to air conditioner brands has played a significant role in driving revenue growth.

Impact of Sricity Manufacturing Facility on Profitability

Although revenue increased, EPACK Durable’s EBITDA margin contracted by 212 bps YoY due to higher operational costs associated with the Sricity plant. The facility is still not operating at full capacity, leading to elevated fixed costs. However, the company expects margins to improve gradually as the plant reaches optimal capacity utilization in the coming quarters.

What Are EPACK Durable’s Strategies for Enhancing Profitability?

Scaling Up Production at the Sricity Plant

EPACK Durable’s management is optimistic that profitability will improve as the Sricity facility scales up production. The underutilization of capacity has weighed on margins, but as production ramps up, cost efficiencies are expected to increase, leading to improved bottom-line performance. The company remains committed to enhancing production efficiency to support its long-term profitability goals.

Ajay DD Singhania, Managing Director & CEO of EPACK Durable, expressed confidence in the company’s ability to drive margin expansion and strengthen its market position. He noted that strategic initiatives and favorable industry conditions contributed to Q3 FY25’s strong revenue performance. He also highlighted that a growing customer base and an improved product mix played a crucial role in supporting EBITDA margins compared to the previous quarter. With the gradual ramp-up of the Sricity facility, he expects higher production efficiency and improved margins in the near term.

Leveraging ODM Capabilities to Capture Market Growth

As one of India’s leading ODMs for air conditioners and small domestic appliances, EPACK Durable is well-positioned to capitalize on the rising demand for energy-efficient RAC models. The company’s ability to offer customized products to brands strengthens its market competitiveness. With India’s air conditioner market experiencing rapid growth, EPACK Durable is expected to benefit from the increased demand for premium cooling solutions.

What Is the Future Outlook for EPACK Durable?

EPACK Durable’s future growth is expected to be driven by rising consumer demand, increased domestic manufacturing, and innovation in air conditioning technology. The company is focused on optimizing production capacity at its manufacturing plants to improve cost efficiencies and expand its customer partnerships. With a strong reputation in the ODM market, EPACK Durable remains well-positioned to sustain its growth trajectory in India’s competitive air conditioning sector.

The company expects that as the Sricity facility reaches optimal production levels, it will contribute significantly to revenue and profitability improvements. Additionally, by continuously refining its product mix and operational efficiency, EPACK Durable aims to deliver long-term value for its customers and shareholders.

When Is EPACK Durable’s Q3 FY25 Earnings Call?

EPACK Durable will hold its Q3 FY25 earnings conference call on February 3, 2025, at 4:00 PM IST, where management will discuss the financial results in greater detail. Investors and analysts can access the call via universal dial-ins: +91 22 6280 1384 | +91 22 7115 8285.