EPACK Durable Diversifying Beyond AC Amid Seasonal Disruption, Eyes Doubling Revenue

EPACK Durable, the Noida-based appliance manufacturer that derives the majority of its over ₹2,000 crore revenue from air conditioners (ACs), now aims to diversify into more large and small appliances such as washing machines and air fryers, according to Managing Director and CEO Ajay Singhania. This move comes as India’s fast-growing AC market faced a setback due to unseasonal rains.

In an interview with Outlook Business, Singhania said the first quarter of FY25 was strong for the industry, with 20–30% growth.

"Q2 (of FY25) has been a disappointment for the industry, largely because April was washed out in the South due to rains. Then in May, much of North and West India experienced rainstorms. As a result, both April and May were muted. In June, all the brands took a conscious call not to produce anything new so that the piled-up inventory in the trade could be liquidated," he noted.

According to Kotak Institutional Equities, the room AC industry is estimated to have declined 20–30% in Q1FY26, due to a high base, a disrupted summer, and aggressive channel stocking in the previous quarter.

Singhania, however, noted that June saw a positive turnaround, especially in the North.

“We saw the first 15–20 days of good summer—hot and humid weather across much of North India—which helped clear a lot of the inventory. That’s a good sign. Now, we are looking at Q2 (FY26), where production will ramp up again, especially as products are set to be upgraded to a higher star rating next year. So, a new range of products will begin manufacturing around end-September or October,” he said.

He added that Q2 is typically a quieter quarter for the AC industry, but Q3 onwards, growth should return, with brands preparing new product ranges for the upcoming season.

AC Still Has Room for Growth, Diversification in Focus

The company, which debuted on the stock market in January 2024, reported a solid Q4FY25, with 22% revenue growth to ₹643.2 crore, aided by a ₹19 crore PLI incentive. The room AC (RAC) segment remained the key revenue driver, contributing 64% of the total.

Now, Singhania said the company aims to further reduce its dependence on ACs—an effort ongoing for the past three years.

“We’re expanding our product portfolio and customer base. The goal is to grow rapidly—while AC continues to grow, our overall dependence on it should drop from 70% last year to 60% and further. Three years ago, AC contributed 85%; now it's down to 70%, despite AC growing at 35–40%. So, our non-AC segments are growing even faster,” he said.

EPACK Durable is now focusing on three key growth areas: large domestic appliances (LDAs), coolers, and small domestic appliances (SDAs). The cooler segment has gained strong traction since late 2024, and washing machines have recently entered mass production following successful pilot runs. These LDAs are expected to boost topline growth and reduce seasonal volatility. The SDA portfolio is also expanding with products like air fryers, coffee makers, hair dryers, and tower fans—many nearing production.

The company’s EBITDA rose 30% to ₹72.1 crore in Q4FY25, supported by a better product mix, client-led price hikes, and operational efficiencies. Profit before tax increased 31.6% to ₹51.5 crore, with margins improving to 8%.

Despite recent short-term setbacks, Singhania remains optimistic about long-term growth prospects, citing the low AC penetration in Indian households—just 9–10%, compared to TVs (35–40%), refrigerators (20%+), and washing machines (20%+). With around 35–40 crore households in India, only about 4 crore own ACs, reflecting installations over the past 8–10 years. He noted that achieving even the global average of 40% could result in an annual market of 3–4 crore units over the next decade—potentially doubling the market in five years.

The Indian AC market is dominated by brands such as Voltas, Daikin, Blue Star, LG, Godrej, Samsung, Lloyd, Haier, Carrier, and Panasonic. It is also seeing increased consolidation, with Haier reportedly planning a stake sale.

However, EPACK Durable’s CEO sees opportunity amid intensifying competition.

“The average industry split between in-house manufacturing and outsourcing is about 60–65% and 30–35%, respectively. Around 8–10 brands still manufacture in-house, but even they outsource 20–50% depending on their capacity. The remaining 50–60 brands are entirely dependent on outsourcing. This creates a healthy balance, as outsourcing helps brands manage seasonality and expand their product range,” Singhania explained.

In its Q4 results, the company announced a capex plan of ₹450–₹500 crore over the next 12 to 18 months. Key investments include ₹20 crore for its Dehradun facility, ₹125 crore for Bhiwadi, ₹225 crore for Sricity, and ₹100 crore for a new Sricity plant being developed through its wholly owned subsidiary, EMTPL.