EPACK Durable Ltd. is optimistic about its living appliances business and is betting on air conditioners to deliver a double digit growth going ahead, despite it being a challenging time for the industry as a whole.
Ajay DD Singhania, Managing Director & CEO of the company told NDTV Profit it continues to see strong prospects for growth, backed by sustained demand and a favourable outlook for the coming quarters.
The management's optimism comes despite expectations of a 20-25% de-growth for the overall air-conditioner industry this season. According to Singhania, the sector is currently dealing with elevated inventory levels, which are expected to be liquidated during the first quarter.
"We continue to be very optimistic for both the AC and appliances business," he said, adding that the company is seeing double-digit growth on the cards even amid industry headwinds.
The company noted that heat-wave conditions during April and May supported demand for cooling products. At the same time, Epack Durable has been able to pass on higher input costs to its brand partners, with the impact ultimately being absorbed by consumers.
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Singhania said price increases implemented during the first quarter have been passed on to brands, though such adjustments typically happen with a lag of one quarter. The company follows a pass-through pricing model, under which both increases and decreases in costs are transferred to brand partners.
On the supply-chain front, Epack Durable said its dependence on imports remains very low, helping shield the business from external disruptions. While rupee depreciation impacted the industry during the fourth quarter, the company expects margins to improve going forward.
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The management indicated that price hikes have been well accepted in the market, supporting profitability despite the challenging industry environment.
With inventory correction expected to play out in the first quarter and pricing pressures easing, Epack Durable believes the operating environment will improve further in the coming quarters.
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