EPACK Durable Reports 43% Revenue Decline in Q2 FY26, Diversification Efforts Show Promise

Epack Durable , India's second-largest ODM for room air conditioners, reported a significant decline in revenue for Q2 FY26, primarily due to challenging market conditions in the air conditioning segment. However, the company's diversification efforts in small domestic appliances (SDA), large domestic appliances (LDA), and components showed strong momentum.

Financial Performance

Metric	Q2 FY26	QoQ Change	H1 FY26	YoY Change
Revenue from Operations	INR 213.00 crores	-43%	INR 876.00 crores	-24%
EBITDA	INR 0.50 crores	-95%	INR 56.00 crores	-8%
EBITDA Margin	0.23%	-	6.44%	-
Net Profit/(Loss)	(INR 22.00 crores)	-	INR 0.60 crores	-

The company attributed the decline in revenue to unseasonal rains and the timing gap between the GST rate reduction announcement and implementation for air conditioners (from 28% to 18%).

Segment Performance

Room Air Conditioners (RAC): Witnessed a 76% decline quarter-on-quarter.
Small Domestic Appliances (SDA): Grew 45% quarter-on-quarter, led by air fryers.
Components: Saw a robust growth of 73% quarter-on-quarter.
Large Domestic Appliances (LDA): Reported significant growth of 466% quarter-on-quarter.

Diversification and Expansion

Epack Durable is executing its strategy to diversify beyond core RAC into higher-growth categories. The company has added new products such as air fryers, coffee makers, and nutri blenders to its portfolio. New customer additions include Groupe SEB, V-Guard, Link Lock, Kirlock SLAM, Nuuk, and American Micronic.

Capex and Future Outlook

Incurred approximately INR 129.00 crores in capex during Q2 FY26 for capacity expansion.
The Hisense facility is ready, with mass production expected to start by the end of December or the first week of January.
Management expects the AC industry to be flat for FY26 due to a 35% degrowth in H1 but remains optimistic about calendar year 2026 with strong order books.

Management Commentary

Ajay Singhania, Managing Director and CEO, stated, "The second quarter of FY '26 continued the muted journey for RAC with an overhang from Q1, primarily due to unseasonal rains and especially the time gap between the announcement and implementation of GST rate reduction on air conditioners from 28% to 18%."

He added, "Our focus on diversifying our overall revenue, the three pillars of small domestic appliances, components, and large domestic appliances, demonstrated strong momentum."

Investor Conference Participation

Epack Durable's senior management plans to participate in Anand Rathi's G-200 Summit-Unstoppable Bharat - Decoupled & Dominant (Flagship Annual Conference) on November 14, 2025, in Mumbai.

While the RAC segment faces challenges, Epack Durable's diversification strategy appears to be yielding positive results. The company's focus on expanding its product portfolio and customer base in non-RAC segments may help offset the impact of the sluggish air conditioner market in the short term.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.89%	-5.43%	-17.94%	-20.18%	-38.39%	+35.27%

Epack Durables Ltd , a prominent player in the Indian consumer durables sector, saw its shares plummet over 10% following the release of its second-quarter financial results. The company reported a widened net loss despite a significant increase in revenue, highlighting the challenges faced in the current market environment.

Financial Performance

The company's financial results for Q2 paint a mixed picture:

Metric	Q2 FY 2025-26	Q2 FY 2024-25	YoY Change
Revenue	₹377.00 crore	₹178.00 crore	+111.80%
Net Loss	₹8.50 crore	₹6.10 crore	+39.30%
Gross Margin	14.60%	16.70%	-210 bps

Despite more than doubling its revenue year-over-year, Epack Durables saw its net loss widen by 39.30%. The company attributed this to higher total expenses, which offset the revenue growth. Gross margins also compressed by 210 basis points to 14.60%, primarily due to changes in inventory mix.

Market Reaction

The market reacted negatively to the results, with Epack Durables' shares falling over 10% initially. By the end of the trading session, the stock had pared some losses but still traded 8.30% lower at ₹306.10. The current share price still represents a premium over its January 2024 listing price of ₹230.00 per share.

Business Expansion and Future Outlook

Despite the challenging quarter, Epack Durables has announced expansion plans:

A $30 million investment for the first phase of a new manufacturing facility in Sricity, Andhra Pradesh.
Plans for washing machine and refrigerator production in the second phase of the Sricity facility.
Management expects these initiatives to generate $1 billion in additional revenue over five years.

Additionally, the company has approved the incorporation of a wholly-owned subsidiary named Epack Manufacturing Technologies, signaling its intent to strengthen its manufacturing capabilities.

Segment Performance

The company's Q2 operational highlights reveal mixed performance across segments:

Room Air Conditioner (RAC) Segment: Declined 76% QoQ due to unseasonal rains and GST-related inventory issues.
Small Domestic Appliances (SDA) Segment: Grew 45% QoQ, driven by strong demand for air fryers and other products.
Component Segment: Reported 73% QoQ growth, supported by a solid order pipeline.
Large Domestic Appliances (LDA) Segment: Grew 466% YoY, reflecting the company's focus on expanding its customer base.

Management Commentary

Mr. Ajay DD Singhania, Managing Director and CEO of Epack Durables, commented on the results: "We delivered a good performance in SDA, LDA, and Component Segment despite the headwinds in the RAC market. During the quarter, we added several new customers and benefited from a more optimized product mix. We remain confident in achieving our full-year target and continuing revenue growth."

As Epack Durables navigates through these challenging times, investors will be closely watching how the company's expansion plans and diversification efforts translate into improved financial performance in the coming quarters.