On Thursday, ICICI Securities began coverage on Epack Durable (EPACK:IN), assigning a Buy (1) rating and setting a price target of INR555.00. Epack Durable is recognized for its role as a contract manufacturer of room air conditioners (RAC) and domestic appliances both small and large. The company's business strategy, which includes a strong RAC business and expansion in the domestic appliances sector, is anticipated to drive growth through the fiscal years 2024 to 2027.
The company is poised to capitalize on the expected growth in the RAC market, which is supported by ongoing capacity and client additions, as well as the expansion of its components business. Strategic partnerships with Hisense India and Panasonic (OTC:PCRFY) Life Solutions India are likely to contribute to incremental growth in the RAC and components segments.
Additionally, Epack's foray into the large domestic appliances (LDA) market, coupled with the expansion of the existing small domestic appliances (SDA) segment, is expected to diversify its product portfolio. This expansion strategy could also lead to higher asset turnover and improved margins for the company.
ICICI Securities highlights the company's strategic business template, which is designed to leverage core strengths while expanding into new areas. Epack's focus on both its thriving core RAC business and the SDA/LDA business expansion is seen as a key driver for sustained growth in the coming years.
The research firm's positive outlook on Epack Durable is based on the company's ability to tap into the robust growth of the RAC segment and its strategic initiatives to diversify its product offerings and enhance its financial performance. The price target of INR555.00 reflects the firm's confidence in the company's growth trajectory.
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