Epack Durable Share Price Hits Over A Month High As ICICI Securities Initiates Coverage With 'Buy'

Epack Durable Ltd.'s share price rose to hit its highest level in over a month after ICICI Securities Ltd. initiated coverage on the stock with a 'buy' rating and a target of Rs 555, which implied an upside of 16%.

The brokerage said that the company has drawn up a business template that involves thriving core room air conditioners business, and expanding from small domestic appliances to large domestic appliances. "We see this strategy driving growth over FY24–27," it said.

ICICI Securities is also of the view that Epack is geared to tap into robust growth envisaged in the RAC segment led by constant capacity, client additions, and component business expansion.

Moreover, the company's entry into LDA segment, and expansion of the existing SDA business may enable product portfolio diversification, and lead to higher margins, the brokerage said.

"Growing salience of SDA/LDA may aid in diluting the seasonality-led impact on RAC’s profitability," it added. "We model Epack to report revenue/PAT CAGR of 41.7%/52.2% over FY24–27."

The downside risks for the brokerage's call include higher-than-expected insourcing by brands and steep competition.

Epack's scrip rose as much as 3.49% to Rs 512 apiece on the NSE, the highest level since November 7. It pared gains to trade 1.86% higher at Rs 503.95 apiece, as of 1:25 p.m. This compares to a 0.4% advance in the NSE Nifty 50 Index.

The stock has risen 142.77% since its listing on Jan. 30. The relative strength index was at 65.7.

Three analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data. The average 12-month consensus price target implies an upside of 7.5%.