EPACK Durable FY26 outlook: ₹450-500 cr capex plan

FY25 closes with broad-based segment growth

EPACK Durable said it ended FY25 on a strong note, citing continued momentum across segments backed by bookings and customer inquiries. The company reported year-on-year revenue growth in each of its operating segments mentioned. Its RSE business revenue grew 50% year-on-year, while Small Domestic Appliances (SDA) grew 20%. Components revenue grew 124% year-on-year, and the newly introduced Large Domestic Appliances (LDA) business grew multifold, which the company linked to an expanding customer base and new product verticals. Management also highlighted that it had more than 55 established customers onboard by the end of the period referenced. The update positions the company’s FY25 performance as driven by diversification rather than a single category.

Non-RAC segments show strong quarter-on-quarter momentum

Beyond year-on-year growth, the company also pointed to quarter-on-quarter strength in non-RAC segments. It cited SDA rising 45%, components up 73%, and LDA up 466% on a quarter-on-quarter basis. The company’s stated FY26 view includes a scenario where RAC growth is expected to be flattish, while non-RAC segments drive overall growth. This framing matters because EPACK has publicly discussed reducing dependence on the air conditioning category over the last three years. Management has linked this strategy to smoothing the impact of seasonal demand patterns.

Capital expenditure: ₹450-500 crore over 12-18 months

EPACK said it plans to invest approximately ₹450 crore to ₹500 crore over the next 12 to 18 months to expand manufacturing capabilities. It also said the investment will support its wholly-owned subsidiary to cater to increasing market demand for FY27 and onwards. In a separate management comment, the company said it plans to invest ₹450 crore over the next 12 to 18 months, and that ₹220 crore had already been spent in the last nine months. The capex plan is presented as capacity-led rather than purely incremental, with the stated objective of supporting future demand.

AC industry conditions: early weakness, then improvement

Chairman Bajrang Bothra said the industry faced a 25% to 30% degrowth in primary sales in the first two quarters, while Q3 showed improvement. He linked production ramp-up to new BEE norms and said demand was gradually improving. Management also flagged cost escalation of around 8% to 10% due to BEE changes and commodity prices. For EPACK, the company said commodity costs are passed through, which it said protects margins. Separately, EPACK referenced an environment where AC market degrowth could be 15% to 20% versus last year, and the year’s growth could be flattish or up to 10% in the period discussed.

FY26 outlook: industry growth expectations versus EPACK’s targets

Management said the broader industry is poised to grow around 15% to 17% in the forecast it referenced. For the room AC category specifically, it cited industry expectations of 15% to 20% growth in FY26. EPACK said it expects to surpass market growth in AC and grow at a higher rate than the industry, while also aiming for higher growth in SDA, LDA, and components. CEO Ajay Singhania said the AC market is expected to grow 15% to 20% annually over the next four to five years, while EPACK targets 25% to 30% growth in AC. He also stated that air conditioning could continue to grow around 17% to 18% over the next three to four years.

Strategy shift: reducing dependence on the AC category

In comments attributed to an interview with Outlook Business, Singhania said EPACK has been trying to reduce its dependence on ACs for the past three years by expanding its product portfolio and customer base. He said AC contribution has come down from 85% three years ago to 70%, and that the company aims to take this down to 60% and further. He also noted that AC grew 35% to 40% even as the contribution reduced, implying faster growth in non-AC segments. EPACK said it is focusing on three growth areas: LDAs, coolers, and SDAs. It also said non-AC seasonal products are a big focus and are growing more than 100% year-on-year.

New products and operating actions on inventory

EPACK said it is launching three new products in the year referenced: washing machines, air fryers, and nutri-blenders, as part of portfolio expansion. The company also described short-term operating actions in response to inventory conditions in the AC market. It said production was put on hold for June to prioritize liquidation of existing inventory, and it expects better visibility and a potential ramp-up in production from July onwards as inventory begins to clear and market movement improves. Management also described seasonality, noting that Q2 is typically quieter for the AC industry, with brands preparing new ranges and activity expected to pick up from Q3.

Profitability and margin commentary

EPACK disclosed an EBITDA margin of 6.44% for H1 in the context provided. In a separate CNBC-TV18 reference, management said it targets a 7.5% to 8% EBITDA margin “this year” in the discussion cited. The company also reiterated that commodity costs are passed through, which it said helps protect margins amid input cost volatility. These points frame how EPACK is thinking about balancing growth investments with profitability.

Consumer durables tailwinds and penetration data

Singhania cited low AC penetration in Indian households, at 9% to 10%, compared with TVs at 35% to 40%, refrigerators at 20%+, and washing machines at 20%+. He added that reaching even a global average penetration of 40% could result in an annual market of 3 to 4 crore units over the next decade, with the potential to double the market in five years. Separate market data included projections that the air conditioner market size could reach 165 lakh units by 2025, up from 65 lakh units in 2019. The air conditioner market was also described as growing at a CAGR of 20.8%, from US$3.8 billion in FY21 to US$ 9.8 billion by FY26, and the Indian room air conditioner market was projected to reach ₹50,000 crore by FY29. The broader context also referenced policy support such as the PLI scheme contributing to reduced imports and rising exports.

Key numbers at a glance

Why the update matters for investors

The set of disclosures ties EPACK’s near-term execution to two moving parts: AC demand variability and the company’s push to scale non-RAC categories. Management has described FY26 RAC growth as potentially flattish, which increases the importance of SDA, components, and LDA growth rates that the company has already highlighted. The capex plan of ₹450-500 crore over 12 to 18 months, with ₹220 crore already spent, suggests EPACK is committing capital ahead of FY27 and beyond. At the same time, management’s commentary on passing through commodity costs and the disclosed H1 EBITDA margin of 6.44% provides a reference point for assessing how expansion and mix changes translate into profitability.

Conclusion

EPACK Durable’s FY25 commentary pointed to strong segment growth, rapid scaling in non-RAC categories, and a stated plan to invest ₹450-500 crore to expand manufacturing. Management expects the RAC industry in FY26 to be flattish at best, while positioning diversification, new product additions, and capacity expansion as key levers for growth. Near-term operational focus includes inventory normalization, with the company indicating a potential production ramp-up from July. Investors will track how quickly non-RAC segments sustain their momentum and how the capex cycle supports demand from FY27 onwards.