Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.
In simple words: The company is currently losing money, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.
The 60-second version of EPACK Durable Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
EPACK Durable Limited manufactures original design of room air conditioners in India.
IndustryFurnishings, Fixtures & Appliances
SectorConsumer Cyclical
Employees995
Annual revenue₹1,849 Cr
How does it make money?
Turns over ₹1,849 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 995 employees supports ₹1.86 Cr of revenue a year, the signature of a capital- or asset-led business.
Revenue / employee₹1.86 Cr
Who are its competitors?
The closest listed comparisons in its industry are HAVELLS INDIA LIMITED, VOLTAS LTD, TITAN COMPANY LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.
What is its competitive advantage?Little sign of one
Returns on capital of 5.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.
Peer median ROE17.1%
What is the outlook?
4 analysts covering the stock expect revenue to grow about 22.5% and earnings to grow about 109.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+22.5%
Est. earnings growth+109.7%
Analysts4
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +23% while net margin moved -92% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.
Revenue effect+23%
Margin effect-92%
DalalBaazaar Score
33/ 100
Weak
Weighted across six categories. Every point is explained below.
✗ ROE of 0.3% is weak
✗ ROE has fallen by 9.9 points over the period
Quality vs. Valuation
Company Quality
29/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
36/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
EV/EBITDA
19.9x
PEG
—
What's Good / What's Bad
🟢 What's Going Well1
Consistently profitable
Profitable in every one of the last 4 reported years.
🔴 What Needs Attention2
Return on equity is falling
ROE has dropped from 10.2% to 0.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.5% to 5.6% — often a sign of competition or overexpansion.
Red Flags
6 items require attention · 2 high · 4 watch
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.2x — little room if earnings dip.
🔴Inventory building faster than salesFinancial
Inventory up 185% against revenue up 23% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 41% over 3 years.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.4x to 1.2x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹455 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 90% over 3 years.
Investment Thesis
🟢 Bull CaseWhat could make this work?
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.
🔴 Bear CaseWhat could go wrong?
The debt load needs earnings to hold up
Debt is 6.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 7.3% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 10.2% to 0.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.
🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today
1EBITDA margin holds above 5%✓ 6.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹455 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.2x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 5% a year✓ 7.3% CAGR
Latest reported year was 33.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
Investment Checklist
6 / 12 checks passed
✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish
Price history
Quick Metrics
2 good · 3 neutral · 6 weak
Market Cap
₹1,675 Cr
Micro Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
1.46x
Reasonable
Reasonable against the company's book value
EPS (TTM)
₹-0.82
Loss-making
Negative earnings per share — the business is losing money
ROE
0.3%
Weak
Weak capital efficiency
ROCE
5.6%
Weak
Low return on total capital employed
Debt/Equity
0.77x
Moderate
Moderate leverage
Revenue Growth (YoY)
33.8%
Healthy
Healthy top-line growth
Profit Growth (YoY)
-48.5%
Falling
Profits are shrinking
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
-₹455 Cr
Cash burning
Spending more cash than the operations bring in
More Metrics
P/E (Forward)
17.9x
Operating Margin
4.3%
Weak
Thin margins leave little room for error
Net Margin
-0.4%
Weak
Very little revenue reaches the bottom line
Current Ratio
1.02
Adequate
Adequate, but no real cushion
Beta (vs Nifty)
1.04
Market-like
Moves roughly in line with the market
52W Range Position
6%
Near low
Near its 52-week low
Technical Snapshot
SMA 20 / SMA 50
175.9 / 190.3
Bearish alignment (short < long)
Price vs SMA 200
Below
Long-term downtrend
RSI (14)
42.2
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹1,498 Cr
₹1,365 Cr
₹2,101 Cr
₹1,849 Cr
+7.3%
EBITDA
₹100 Cr
₹122 Cr
₹173 Cr
₹121 Cr
+6.3%
EBITDA Margin
6.7%
8.9%
8.3%
6.5%
—
PAT (Net Profit)
₹32 Cr
₹35 Cr
₹55 Cr
₹3 Cr
-53.3%
EPS
₹3.34
₹4.35
₹5.75
₹0.34
-53.3%
ROE
10.2%
4.0%
5.8%
0.3%
—
ROCE
15.5%
8.5%
12.1%
5.6%
—
Total Debt
₹525 Cr
₹386 Cr
₹416 Cr
₹739 Cr
+12.1%
Free Cash Flow
-₹214 Cr
₹100 Cr
-₹83 Cr
-₹455 Cr
—
🟢 Revenue has grown at 7.3% a year over 3 years.
🟢 EBITDA has grown at 6.3% a year over 3 years.
🟡 EBITDA Margin has held roughly flat at 6.5% over 3 years.
🔴 PAT (Net Profit) has shrunk at 53.3% a year over 3 years.
🔴 EPS has shrunk at 53.3% a year over 3 years.
🔴 ROE has fallen from 10.2% to 0.3% over 3 years (-9.9 pts).
🔴 ROCE has fallen from 15.5% to 5.6% over 3 years (-9.8 pts).
🔴 Total Debt has grown at 12.1% a year over 3 years.
🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.
Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.
3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑
