Epack Durable Gets 'Buy' As ICICI Securities Initiates Coverage; Sees 16% Potential Upside

ICICI Securities Report

We initiate coverage on Epack Durable Ltd. with a Buy rating and a DCF-based target price of Rs 555 (implying 73 times/43 times FY26E/FY27E earnings).

Epack Durable is a prominent contract manufacturer of room air conditioners and small/large domestic appliances. The company has drawn up a business template that involves:

1. thriving core RAC business; and

2. SDA/LDA business expansion.

We see this strategy driving growth over FY24–27E. Key points:

1. Epack is geared to tap into robust growth envisaged in the RAC segment led by: constant capacity/client additions; and component business expansion. Strategic tie-ups with Hisense India and Panasonic Life Solutions India may drive incremental growth in the RAC/components segments.

2. Entry into LDA and existing SDA segment’s expansion may enable: product portfolio diversification; and higher asset turns/ margins.

3. With strong RAC growth in the offing, we assess, high-capacity utilisation at its Sri City plant playing a pivotal role.

4. Growing salience of SDA/LDA may aid in diluting the seasonality-led impact on RAC’s profitability.

We model Epack to report revenue/PAT CAGR of 41.7%/52.2% over FY24–27E.

Key risks: Higher-thanexpected insourcing by brands and steep competition.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.