Epack Durable jumps after reporting turnaround Q3 numbers

Epack Durable rallied 6.31% to Rs 198.05 after the company's consolidated net profit stood at Rs 4.89 crore in Q3 FY24 as compared with net loss of Rs 6.24 crore in Q3 FY23.

Revenue from operations increased 1.25% YoY to Rs 279.05 in Q3 FY24, primarily due to the effects of weather disruption in Q1-FY24, that lead to inventory destocking by customers in Q2 and Q3, resulting in lower demand, however the company said that this situation has now reversed as many brands have reported strong Q3 sales, and anticipate a strong summer season.

The company reported pre-tax profit of Rs 6.66 crore in Q3 FY24 as compared with Pre- tax loss of Rs 8.55 crore in Q3 FY23.

Total expenses declined 3.65% to Rs 273.92 crore in Q3 FY24 as compared with Rs 284.29 crore posted in corresponding quarter last year. Cost of material consumed stood at Rs 244.31 crore (down 0.84% YoY), employee benefit expenses was at Rs 12.01 crore (up 37.26% YoY), finance cost stood at Rs 9.74 crore (up 45.37% YoY).

EBITDA stood at Rs 237 crore in Q3 FY24, steeply higher than Rs 44 crore posted in same quarter last year. EBITDA margin improved by 689 bps to 8.49% in Q3 FY24 as against 1.60% in Q3 FY23.

The company said that its manufacturing capacity has increased by 50% YoY in Q3 FY24 since the commissioning of Sricity (Andhra Pradesh) facility, hence it is well equipped to cater to the upcoming summer season.

The company has reduced its debt position through internal accruals, resulting in reduction of debt to equity from 1.58x in FY23 to 0.73x in Q3-FY24.

Ajay DD Singhania - MD & CEO, said, I am pleased to announce our Q3-FY24 results as a newly listed company. EPACK Durable has a shown a strong bottomline performance this quarter with over 400% growth in EBITDA on a year-on-year basis. We have significantly improved our operational efficiencies by reducing our working capital days and also our debt levels despite significant capacity expansions. Furthermore, we continue to diversify our product mix and expand our client base, as we prepare for our next phase of growth. With our continued focus on growth while improving profitability, we are confident of delivering sustained superior performance over the coming quarters.

Shares of Epack Duable debuted on stock market on 30 January 2024. The scrip was listed at Rs 225, exhibiting a discount of 2.17% to the issue price 230.

EPACK Durable is an original design manufacturer (ODM) of room air conditioners (RAC). The company also manufactures components such as sheet metal parts, injection moulded parts, cross-flow fans, and PCBA components that are actively used in the production of RACs.

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