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Mumbai: As a result of last week's projections that the US economy was heading towards a recession, the US Federal Reserve was now forced to cut interest rates as experts began to suggest that the Federal Reserve would now be forced to cut interest rates. Global markets rallied last week after US Federal Reserve Chairman Jerome Powell hinted at an early start of interest rate cuts over the weekend. Indian stock markets have seen a rally as a result of mutual funds' continued buying in small, mid cap stocks as against the relatively low rise in index management Sensex, Nifty. Of course, with the reshuffling of portfolios, a further valuation of capital has been seen as against the profit booking of funds. So while some stock prices have fallen, many stocks have registered a big rally. Next week, on August 30, India's infrastructure data for the month of July and GDP data for the second quarter will be released, along with Japan's consumer confidence data on the global front, Nifty spot may close at 25077 or 25222 and Sensex may close at 81888 or 82333
Arjun's Eyes : Epack Durable Limited.
BSE (544095), NSE (EPAC) listed, Rs.10 paid-up, floated in 2019, ISO/IEC 17025:2017, ISO 14001:2015, ISO 9001:2015, ISO 45001:2018 certified, EPAC Durables Limited (EPAC) is the second largest manufacturer of air conditioners in terms of number of indoor and outdoor units through the original design (ODM) route by FY23. The company's expertise lies in manufacturing diverse room air conditioners and small domestic appliances (SDA). A customer-centric company maintaining operational efficiency while focusing on continuous innovation.
Manufacturing Facilities-Products: The company has a total of 6 manufacturing plants. It has four manufacturing units in Dehradun-Uttarakhand, Alwar-Rajasthan and Chittor-Andhra Pradesh. The company's consumer durable products include room air conditioners, small home appliances as well as heat exchangers, cross-flow fans, axial fans, etc. Small home appliances (SDA) include induction cooktops, water dispensers and mixer grinders and component product range, heat exchanger, printed circuit board assembly (PCBA), universal motor, copper tubing, injection molding, cross flow fans, axial fans, copper fabricated products, which include induction coils, sheet metal press parts and powder coating. The company has a production capacity of 15.6 lakh units indoor units, 16.8 lakh units outdoor units, 4.2 lakh units window air conditioners, 18.5 lakh units cooktops, 3 lakh units mixer grinders, 1.1 lakh units water dispensers
Clients: The company's major clients include Blue Star, Daikin Airconditioning India, Career Media India, Voltas, Havells India, Haier Appliances India, Infinity Retail and Godrej & Boyce. The company's average relationship with its customers is 8.7 years.
The company derived 80 per cent of its total revenue from its top five customers in the first half of FY 2024 and 83 per cent in FY 2023. The company's EPAC trade mark is owned by the EPAC Polymers group of companies. A licensing agreement has been entered into on July 29, 2023, allowing the company to use this trademark for 25 years on a fee basis. The company has listed new shares through IPO on January 30, 2024 with a capital of Rs 640 crore. The company will use the capital of the issue of new shares for capital expenditure, repayment of debt, general corporate purpose. Manufacturing of domestic air coolers has started through EPEC from February 1, 2024
EPEC Durable also has a 26 percent stake in EPavo Electrical-EPavo Electricals Ltd, which it intends to increase to 50 percent. EPavo Electricals also manufactures electric motors, HVAC products and related products. EPavo plans to start manufacturing other motors and set up a BLDC plant in Bhiwandi in the next four years. EPavo Durables has decided to manufacture new product fully automatic top load washing machines by December.
Book value: Rs 57 in March 2023, Rs 93 in March 2024, likely Rs 102 in March 2025
Shareholding pattern: Bothra and Singhania family and friends hold 48.14 per cent stake in the company. While Alternative Investment Funds hold 10.71 per cent stake, Advantage Funds S4 holds 10.33 per cent stake. Among the insurance companies holding 4.56 per cent stake, SBI Life Insurance holds 1.81 per cent, SBI General Insurance Company holds 1 per cent, HDFC Life Insurance Company holds 1.5 per cent, NBFCs hold 16.04 per cent. While foreign companies and FIIs hold 12.38 per cent, Agusta Investment Zero Private Limited Singapore holds 11 per cent. While retail investors holding individual shares up to Rs 2 lakh hold 4.39 per cent. Among others, HNIs, NRIs have got 3.78 per cent.
financial result:
(1) Entire year April 2023 to April 2024:
Earning a net income of Rs. 1,429 crore with a net profit margin of 2.48%, NPM recorded a net profit of Rs. 35.37 crore and earning per share-EPS of Rs. 4.35.
(2) First quarter April 2024 to June 2024 :
Net Income increased by 78 percent to Rs 780 crore Net Profit Margin-NPM increased from 3.08 percent Net Profit increased by 168 percent to Rs 23.41 crore Earnings per share-EPS Rs 2.44.
(3) Likely full year April 2024 to March 2025 :
Earnings-EPS is expected to be Rs 8.88 and Net Profit is expected to be Rs 85 crores from estimated Net Income of Rs 2575 crores.
Thus (1) The author has no investment in the shares of the above company. Authors may have direct or indirect personal vested interests in the research sources. Consult a qualified investment financial advisor before making any investment decision. The author, Gujarat Samachar or any other person shall not be liable for any potential loss on investment. (2) Expected Full Financial Year 2024-25 Earnings Per Share-EPS Expected Rs 8.89 and Expected Book Value Rs 102 against Rs 10. Paid-up shares are priced at Rs 261.45 on BSE (Rs 261.15 on NSE) as on 23rd August 2024 at a P/E of 29.71 against industry average P/E of 90. In the Air Conditioner industry Blue Star is getting a P/E of 65, Johnson Company Hitachi is getting a P/E of 450, Voltas is getting a P/E of 110 and industry average P/E of 90 while Original Design Manufacturer EPEC Durable Ltd. is currently trading at a P/E of 29.71.
