#### **Overview** **Epack Durable Limited (EPACK)**, incorporated in 2003, is India’s **second-largest Room Air Conditioner (RAC) Original Design Manufacturer (ODM)** by unit volume, with an estimated **24% market share** in FY23–FY25. Originally starting as a contract manufacturer (OEM) for RAC brands, the company transitioned to a full-fledged ODM in 2012 and has since evolved into a diversified, vertically integrated manufacturer of **consumer durables and critical components**. Headquartered in India, EPACK is now recognized as a **leading domestic EMS (Electronics Manufacturing Services) player**, offering end-to-end design, manufacturing, and component solutions. The Singhania and Bothra families founded EPACK, bringing over **100 years of combined experience** in consumer durability and electronics manufacturing. The company operates under a **customer-centric ODM model**, serving over **55 marquee clients** across RAC, Small Domestic Appliances (SDA), Large Domestic Appliances (LDA), and components. --- #### **Manufacturing & Operational Footprint** EPACK operates **three strategically located, highly backward-integrated manufacturing facilities**: - **Dehradun (Uttarakhand)** - **Bhiwadi (Rajasthan)** - **Sri City (Andhra Pradesh)** These facilities are supported by **four dedicated R&D centers in Noida, Bhiwadi, Dehradun, and Sri City**, each equipped with advanced **endurance, safety, and performance testing labs** (including needle flame and glow wire testers). The company employs **over 70 R&D professionals** focused on innovation in energy efficiency, IoT-enabled appliances, and product design. - In FY25, EPACK launched its **first washing machine (fully automatic top-load)** and expanded cooler production, marking a major shift into **LDA**. - The **Sri City plant**, inaugurated in FY24, increased total capacity by **50%**, with utilization improving from 17–18% to **40–60%** by August 2025. - Two **greenfield projects** are underway: 1. **EPAVO Electricals Private Limited (JV with Ram Ratna Group)** – Greenfield BLDC motor plant in Bhiwadi (Production start: Q2 FY26). 2. **EPACK Manufacturing Technologies Pvt. Ltd. (EMTPL)** – Wholly-owned subsidiary for **Hisense-branded AC and LDA production** in Sri City (Production start: Q4 FY26). --- #### **Product Portfolio & Revenue Streams** EPACK offers a **diversified product portfolio**, mitigating seasonality and reducing dependence on RACs: | **Segment** | **Key Products / Components** | **Revenue Contribution (FY25)** | |-------------------------|------------------------------------------------------------------------------------------------|------------------| | **Room Air Conditioners (RAC)** | Indoor/Outdoor Units (Split & Inverter), Window ACs, Chassis (9K–48K BTU), up to 2.5-ton models | **70–75%** | | **Small Domestic Appliances (SDA)** | Induction Cooktops (up to 3.5kW), Nutri Blenders, Mixer Grinders, Air Fryers, Coffee Makers, Vacuum Cleaners, Water Dispensers, Hair Dryers, Tower Fans | **11%** | | **Large Domestic Appliances (LDA)** | Air Coolers (>70,000 units/month), Washing Machines (planned capacity: 1 million units/year) | **3%** | | **Components** | PCBAs, Heat Exchangers, Copper Tubing, Cross-Flow Fans, Sheet Metal Parts, BLDC/Universal Motors, Injection Moulded Parts | **8%** | - **Exports:** Contribute **2.95%** of revenue, with plans to increase via **Hisense partnership** (India-made products exported globally). - EPACK supplies **indoor & outdoor units** as fully built or separately packaged (IDU/ODU), offering **flexible delivery solutions**. --- #### **Backward Integration & Supply Chain Resilience** EPACK has achieved the **highest level of backward integration for RACs in India**, with **75% of key components** (e.g., PCBAs, heat exchangers, fans, copper parts, sheet metal, plastic injection) manufactured **in-house**. This integration: - **Reduces import dependence** from **45–50%** to ~25%. - **Improves cost efficiency, quality control, and lead times**. - Enhances resilience against global supply shocks and forex volatility. --- #### **Strategic Partnerships & Expansions** EPACK has launched multiple transformative partnerships to drive diversification and scale: 1. **Hisense Global Alliance (ODM & Manufacturing JV)** - Jointly manufacture **Hisense-branded RACs and LDAs** in India using Hisense’s technology. - A new **₹1,000 million facility** is under construction in **Sri City** (via EMTPL). - ODM supply started in **March 2025**; volume production from **Q4 FY26**. - Expected to generate **$1 billion in revenue over 5 years**, with **export potential**. 2. **Panasonic & Daikin Component Supply Agreements** - Enables **entry into the EMS space**. - EPACK to produce **PCBAs, heat exchangers, cross-flow fans, and copper parts** for inverter RACs. - Production to be carried out at **Bhiwadi and Sri City**. - First **non-captive component supply** to global MNCs, unlocking new revenue streams. 3. **EPAVO Joint Venture (50:50 with Ram Ratna Group)** - Focus: **Localization of BLDC motors** for ACs, ceiling fans, and HVLS fans. - Installed capacity: **3 million BLDC motors (ACs) + 1 million (fans)** by FY26–27. - Strengthens **backward integration**, aligns with **BIS and QCO regulations**, and reduces import reliance in critical components. 4. **Bumjin Audio JV (July 2025)** - Expanded into **smart audio segment** (soundbars, TV speakers, Bluetooth devices). - Leverages **Bumjin’s speaker tech** and EPACK’s **manufacturing, R&D, and distribution**. - Aims to become a full **electronics manufacturing partner** across audio and visual components. 5. **Acquisition of Display Module Entity (July 2025)** - Entry into **electronic sub-systems**: FOG/COG display modules, camera module assembly. - Supports **vertical expansion** in PCB, camera, and sensor manufacturing. --- #### **Growth Strategy & Market Positioning** EPACK’s growth is driven by five key levers: 1. **Diversification Beyond RACs** - Actively shifting revenue mix: from **85% RAC (FY23)** to projected **65% by FY26**, increasing SDA, LDA & component share from **23% to 35%**. - New high-margin products: **coffee makers, vacuum cleaners, nutri blenders, washing machines, air fryers, infrared cooktops, tower fans, hair dryers**. 2. **Capacity Expansion & Capex** - **INR 4,500–5,000 million** capex planned over 12–18 months: - **Dehradun**: INR 200M - **Bhiwadi**: INR 1,250M - **Sri City**: INR 2,250M - Expected to take total sites from 3 to **6 facilities by FY26**. - Funded by **IPO proceeds (INR 2,300M)**, **term loans (INR 700–1,000M)**, and **internal accruals (INR 1,000–1,500M)**. 3. **Domestic Manufacturing & Government Incentives** - **PLI Scheme Beneficiary** (₹375M recognized in FY25). - PLI has enabled **50% capacity expansion** and accelerated component localization. - Investing in **PCBA, PCB, and EMS infrastructure**. - Preparing for **ECMS (Electronics Component Manufacturing Scheme)**. - Mandatory **BIS certification** across RAC, SDA, LDA, and components creates **import barriers**, boosting EPACK’s **competitive advantage**. 4. **Customer & Product Diversification Strategy** - **Multi-pronged approach**: - **NCNP**: New Customer New Product - **NCEP**: New Customer Existing Product - **ECNP**: Existing Customer New Product - Targeting **70 customers by FY26** (from 55 in FY25). - Top clients include: **Voltas, Haier, Philips, Panasonic, Daikin, Havells, Godrej, Blue Star, Carrier, Bosch & Siemens, Bajaj, Crompton, Hisense, M., and Energy Meter brands**. 5. **R&D & Innovation** - Secured **4 registered patents, 3 filed patents, and 12 registered designs** in FY25. - Innovations in **R32 refrigerant-based WACs**, **5 mm copper tubing for heat exchangers**, and **inverter RACs**. - Investment in **IoT and smart appliances**, with focus on **regulatory compliance and energy efficiency**. --- #### **Financial and Operational Performance** - **Total Revenue (FY25): ₹21,919 million** - **Revenue Growth (YoY): 53%** - **Profit Growth (FY24–25): 56%** - **Revenue CAGR (FY21–24): 24.47%** - **RAC Capacity**: - **Indoor Units**: 1.6 million - **Outdoor Units**: 2.05 million - **Window ACs**: 0.62 million - **SDA/LDA Capacity**: - Induction Cooktops: 2.0M - Mixer Grinders: 0.62M - Air Coolers: 0.75M - Washing Machines: 0.8M (after expansion) - **Customer Concentration**: Reduced from **72% (FY23)** to **48% (FY25)**. - **ROE/ROCE Target**: 15–16% by FY27–28.