Buy EPACK Durables, target price Rs 575: LKP Securities

LKP Securities has a buy call on EPACK Durables Ltd. with a target price of Rs 575. The current market price of EPACK Durables is Rs 435. The time period given by analyst is year when EPACK Durables Ltd. price can reach defined target. EPACK Durables, incorporated in 2019, is a Small Cap company with a market cap of Rs 4223.54 crore, operating in General sector.

EPACK Durables' key Products/Revenue Segments include Electrical Consumer Durables, Other Operating Revenue, Scrap and Export Incentives for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 381.85 crore, down -51.03% from last quarter Total Income of Rs 779.81 crore and up 113.52% from last year same quarter Total Income of Rs 178.83 crore. The company has reported net profit after tax of Rs -7.79 crore in the latest quarter.


Investment Rationale
EPACK is a proxy play in the rapidly growing RAC segment. The company is strategically broadening its product offerings beyond RACs to include Air Coolers, Top Load Washing Machines and Air Fryers, with additional small kitchen appliances in development. This diversification positions EPACK well to capture growth in related markets. The RAC sector is projected to expand significantly, with forecasts suggesting a rise to ~25 million units in FY29E, reflecting a robust 18% CAGR growth in the industry. EPACK?s strong backward integration capabilities and advanced R&D infrastructure are expected to drive its success in this competitive market. LKP Securities expects the sales/EBITDA/PAT to grow at a CAGR of 31%/34%/55% over FY24 to FY27E. The share is currently trading at 29x on its projected earnings for the FY27E. EPACK presents an attractive investment opportunity considering its promising growth trajectory and positive outlook. The brokerage recommends a BUY rating with a target price of Rs 575 valuing at 40x FY27E EPS.

Promoter/FII Holdings
Promoters held 48.06 per cent stake in the company as of 30-Sep-2024, while FIIs owned 1.97 per cent, DIIs 10.58 per cent.