Epack Durable: YES Securities sees 50% upside in this 'undervalued' stock

Epack Durable share price: YES Securities values the company at 30x FY28EPS and arrives at a target price of ₹545

Epack Durable share price today: Domestic brokerage YES Securities has initiated coverage on Epack Durable stock, OEM/ODM manufacturer of living appliances, serving major consumer brands, with a 'Buy' rating, citing its commendable value prop including strategic partnerships with key players, robust manufacturing capabilities and prudent capacity expansion, focusing on components manufacturing resulting in backward integration, customer addition, and new product launches and improving margin trajectory.

 

"We stay bullish on the RAC and the Kitchen space as in the medium term, led by factors like strong realty-infused demand, recent GST rate cuts, growing share of organised sector, and Govt impetus towards manufacturing and export boost will drive growth. The company’s enviable value prop should help it outperform the industry in good time," the brokerage said.

 

The brokerage projects revenue/Ebitda/PAT growth of 32 per cent/39 per cent/45 per cent, respectively, over FY25-FY28E. The company's margin is expected to improve by 130 basis points (bps) by FY28. 

 

YES Securities values the company at 30x FY28EPS and arrives at a target price of ₹545. The target price implies a 50 per cent upside from Thursday, September 25, closing price of ₹362.65. 

 

On Friday, September 26, Epack Durable stock fell around 2.5 per cent to hit an intraday low of ₹353.1 on the National Stock Exchange (NSE). At 12:40 PM, the stock was trading at ₹353.95, down 2.4 per cent compared to the previous day's close of ₹362.65 on the NSE. The stock has fallen around 47 per cent from its 52-week high of ₹669.95 touched on January 8, 2025. The company's total market capitalisation stood at ₹3,396.78 crore.

Here's why YES Securities is bullish on Epack Durable:

Manufacturing expansion and product diversification: Epack is scaling up its manufacturing facility from the current 5 to 7. One for EPAVO, which has the capacity to manufacture BLDC Motors for RAC and Fans.  Another facility is for the Hisense business located at Sri-city, where the company has installed a capacity of 1 million units of RAC to start with and will be further scaled up to 1.5 million units. 

 

Additionally, the company is also expanding into semi-commercial air conditioners, domestic air coolers and other products, thus reducing reliance on RAC, which currently contributes 70-75 per cent of the revenue. 

 

Strategic partnerships to drive growth: According to YES Securities, EPACK Durable’s strategic partnerships with Ram Ratna Wires (EPAVO JV), Hisense, Daikin, Panasonic, and Bumjin will drive strong revenue growth. The EPAVO JV aims to produce 3 million BLDC motors for ACs and 1 million for fans annually. The Hisense tie-up begins with RACs, with plans to expand into TVs and other appliances. These alliances are projected to contribute around 30 per cent of revenue by FY28, with overall revenue expected to grow at a 32 per cent compounded annual growth rate (CAGR) from FY25–28E.

 

Stronger margins via backward integration: Epack Durable’s JV with EPAVO will begin BLDC motor production by Q2FY26, supporting its backward integration strategy. With 75 per cent of components already made in-house, the company aims to cut import dependence (currently 45–50 per cent) and boost cost efficiency. Expanding component manufacturing also improves margins and increases wallet share from customers.

 

Diversified customer base to lower concentration risk: The company has strengthened relationships with over 55 marquee clients, including Voltas, Haier, Philips, and Hisense, and plans to expand to 70 customers by FY26. Strategic initiatives, including New Customer New Product (NCNP), New Customer Existing Product (NCEP), and Existing Customer New Product (ECNP), will ensure diversified revenue streams, a healthy order book for FY26 and lower customer concentration risk.