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EPACK Durable Limited Q4 FY24 Earnings Conference Call Summary
Overview • Date of Call: May 29, 2024 • Participants: CEO Ajay Singhania, CFO Rajesh Mittal • Focus: Standalone and consolidated audited financial results for Q4 and FY24
Company Position • Second largest air-conditioned original design manufacturer in India • Emphasis on innovation and operational efficiency • Three manufacturing facilities and strong R&D capabilities
Financial Highlights • Q4 FY24: • Revenue: INR 526 crores (down 18% YoY) • EBITDA: INR 56 crores (down 10%) • Net Profit: INR 28 crores (down 17%) • Fiscal Year FY24: • Revenue: INR 1,420 crores (down 8%) • EBITDA: INR 116 crores (up 13%) • Net Profit: INR 35 crores (up 11%) • Improved working capital cycle and reduced debt-to-equity ratio
Revenue Decline Factors • Weather disruptions in Q1 led to excess inventory liquidation • Shift in demand for fresh manufacturing to Q1 FY25 • Strategic initiatives helped limit revenue decline to 8%
Operational Improvements • EBITDA margins improved from 6.67% in FY23 to 8.19% in FY24 • Reduction in working capital days from 91 to 45 • Manufacturing capacity increased by 50% • Diversification into new product categories, including air coolers
Future Outlook • Anticipated strong demand in Q1 FY25 with over 50% growth in AC segment • Top three customers now contribute 72% of revenue (down from 80%) • Projected industry growth of 17-20% in FY25
Small Home Appliance Business • Revenue for small domestic appliances (SDA) in FY24: INR 198 crores (down from INR 209 crores in FY23) • Cooler business expected to grow; washing machine models launching by September
Product Diversification Goals • Aim to reduce dependence on highest-selling products from 80% to below 70% in 2-3 years • Increased interest expenses due to loan repayments, but reduction expected in FY25
Investor Concerns • Questions about share price movement post-IPO and future growth reflections • Singhania emphasized commitment to long-term growth and investor value
Conclusion • Call concluded with an invitation for further inquiries through the investor relations team.
EPACK Durable Limited Earnings Conference Call Summary
Conference Call Overview • Date: February 16, 2024 • Discussed: Unaudited financial results for Q3 and nine months ending December 31, 2023 • Moderated by: Anuj Sonpal, Valorem Advisors • Management Team: • Chairman: Bajrang Bothra • Managing Director: Ajay Singhania • CFO: Rajesh Mittal
Company Overview • Second-largest original design manufacturer of room air conditioners in India • Focus on innovation and operational efficiency • Operates three manufacturing facilities with strong R&D presence
Financial Highlights • Q3 Revenue: ₹279 crore (1% YoY increase) • Q3 EBITDA: ₹24 crore (439% increase) • Q3 Net Profit: ₹5 crore (compared to a loss of ₹6 crore last year) • Nine-month Revenue: ₹894 crore (1% decline) • Nine-month EBITDA: ₹61 crore (56% increase) • Nine-month Net Profit: ₹8 crore • Improved working capital days and reduced debt-to-equity ratio
Operational Highlights • Revenue growth flat due to Q1 demand disruptions • Significant improvements in Q2 and Q3 results • Over 400% YoY growth in EBITDA • 50% increase in manufacturing capacity at new facility in Sri City, Andhra Pradesh • Expanded product portfolio with new air coolers and components • Optimism for upcoming season with reduced inventory levels
Market Position and Strategy • Positive demand uptick with increased production capacity • Introduction of new SKUs to attract diverse customer base • Offset order reductions from large clients by acquiring new customers • Increased inquiries for components, expecting traction in the coming months
Future Prospects • Awaiting TLI approval from Rajasthan government (1.8% to 2% revenue benefits) • Strong potential in cooler business, expecting ₹80-100 crore revenue in 16-18 months • Anticipated contribution from new small appliances starting Q2 next financial year • Industry growth expected at 15% to 20%, with plans to outpace this through new customer acquisition
Financial Projections • Average interest rate on remaining debt: 7.5% to 8.25% • Stronger order book for RAC business with earlier demand ramp-up • Operating margins improved from 13% to 15% YoY and from 11% to 17% QoQ
Conclusion • Management invited further inquiries from participants, expressing confidence in future growth and operational strategies.