Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Epack Durable Ltd (NSE: EPACK) Q3 2026 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Bajrang Bhotra — Chairman and Whole Time Director
Rajesh Kumar Mittal — Chief Financial Officer
Ajay DD Singhania — Managing Director and Chief Executive Officer
Analysts:
Tanesha — Analyst
Sucrit Deep Patel — Analyst
Unidentified Participant
Aniruddha Joshi — Analyst
Praveen Sahai — Analyst
Raman KV — Analyst
Anupam — Analyst
Disha — Analyst
Ashish Jain — Analyst
Sabhanu — Analyst
Arshia Khosla — Analyst
Achal — Analyst
Balasubramanian — Analyst
Deepali Bansal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to APEC Durable Limited 3Q FY26 earnings call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will win the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you read assistance during the conference call, please signal an operator by pressing Star then zero on a touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Tanesha from Dam Capital Advisors Limited. Thank you. And over to you sir.
Tanesha — Analyst
Thanks Ikra. Good morning everyone and a very warm welcome to the Q3FY26 earnings call of Impact Durable Limited. We have the management today being represented by Mr. Bajrang Bhotra, Chairman and Whole Time Director. Mr. Ajay Singhanya, Managing Director and CEO Mr. Narayan Lodha, Executive Director and Group CFO and Mr. Rajesh Kumar Mittal, CFO. At this point I’ll hand over the floor to Mr. Bhotra for his initial remarks post which we’ll open up the floor for Q and A. Thank you. And over to you sir.
Bajrang Bhotra — Chairman and Whole Time Director
Good morning everyone. I am Bazarang Bhotra, Chairman of EPEC Durable and I warmly welcome you all to our Q3FY26 earnings conference call. The Board of Directors have approved Q3FY26 results on 20 January 26th and I trust you all had the opportunity to review them. As many of you know, APEC Durable is India’s second largest ODM and in the room air conditioner segment. While RAC continues to remain a strong and scalable core business for us, we are consistently diversifying into higher growth and structurally better margin categories.
Our revenue mix is becoming more balanced and dependence on the top customers are steadily reducing. This reflects both the broadening of our customer base across product categories across and the increasing contribution from new verticals over time. This will make our business model more resilient, improve margin stability and reduce concentration risk while positioning EPAC for more sustainable and profitable long term growth. Joining me on Today’s call are Mr. Ajay DD Singhania, Managing Director and CEO.
Mr. Narayan Lodha, Executive Director and Group CFO APAC Group. Mr. Rajesh Kumar Mittal, Chief Financial Officer, APAC Durable. They will take you through the details of our operational and financial performance for the quarter. Thank you. With that now I hand over to Rajesh Mittalji, our CFO EPAC Durable to take you through the key financial highlights for Q3FY26. Thank you.
Rajesh Kumar Mittal — Chief Financial Officer
Thank you, sir. Good morning everyone. Welcome to our earnings call for the third quarter of the financial year 2026. I would like to thank our host Dan Capital for arranging today’s earnings call. The key highlights for the quarter and the period under review are as Follows. For the third quarter under review, revenue from operations stood at Rupees 427.8 crore which increased by 13.5% on an year on year basis. The EBITDA for the quarter was rupees 31.7 crores increased by around 31.5% on a year on year basis.
The EBITDA margin reported at 7.41% as against 6.39 crore 39% on year on year basis. The net profit was rupees 2.6 crore which increased by 4% on a year on year basis. However, net Profit margin contracted by 5 basis points to 0.61% due to higher depreciation and finance cost. Now I would request our Managing Director and CEO, Mr. Rajay Diddy Singhania to brief you on the operational highlights.
Ajay DD Singhania — Managing Director and Chief Executive Officer
Thank you Rajesh Ji and once again good morning everyone. The company reported a healthy performance during third quarter with performance broadly in line with our internal targets. Despite a challenging external headwind, we delivered a resilient performance. We also continued to strengthen our core business fundamentals during the quarter. We added two customers during the quarter for whom supplies have already commenced. With this, our total customer base has increased to 67 over first nine months of the year in line with our growth objectives.
Our washing machine business is also ramping up well and is expected to become a meaningful contributor to both revenue and margin over the coming years. With an improving product mix and better asset utilization supported by strong execution and continued focus on operational discipline, we remain firmly on track to deliver EBITDA margin expansion and stronger profitability on a year on year basis. From a segmental perspective, our AC business segment witnessed a marginal 1% year on year decline during the quarter.
However, there is a strong performance across our other business segments. Hence our overall revenue has grown. Reflecting the success of our diversification strategy. The small domestic appliances Segment grew by 30% year on year basis driven by healthy order inflows. Across both existing and newly launched product categories. Demand for air fryers have been very encouraging and is gaining good traction with customers. Our component segment delivered a standout performance recording a strong 61% year on year growth supported by robust order pipeline of our PCBs, copper parts and plastic molded components.
The large domestic appliances segment reported an impressive 74% year on year growth driven by our continued focus on expanding product and diversifying customer base. Notably, our product business contributed 75% of total operating revenue during the quarter, reaffirming strong customer confidence in our core offerings and highlighting healthy market adoption across categories. In line with our strategic scale and diversify, we have also taken a significant step in expanding our component segment.
This is a deliberate and strategic move to reduce concentration risk while positioning the company in adjacent high growth industries. We see this as an important long term growth lever that strengthens our business portfolio, enhances resilience and opens up new cross sector opportunities for sustainable value creation. We remain committed to long term value creation through strategic capital investments aimed at expanding capacity and supporting our diversified growth roadmap. By the end of Q3FY26 we made steady progress across multiple key locations.
We have incurred INR 44 crore of capex in Q3FY26 primarily directed towards capacity expansion and equipment installation for washing machine line component segment at our new CCT plant. Additionally, investments made at our JV facility with Hisense and our new greenfield plant in Biwadi are expected to commence production in coming quarters. These investments along with the upcoming growing customer engagement, continued expansion of our product portfolio position us well for the future growth.
With strong foundation in place, focused execution, we remain confident in achieving our full year targets and sustainable healthy revenue and growth margin going forward. With this, we now open the floor for Q and A sessions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles that. The first question is from the line of Sucrit Deep Patel from Eyesight Wintert Pivot limited Please go ahead.
Sucrit Deep Patel
Good morning to the team. I have two questions. My first question is to Mr. Ajay Singh. As RAC now contributes less than 60% of the revenue, what specific initiatives are being taken to accelerate scale in SDA and LDA over the next next 12 to 18 months? How do you see EPAC positioning itself to capture demand across tier 2 and tier 3 markets? And what role will backward integration or design play in strengthening the competitiveness? Thank you. That’s my first question. I’ll ask my second question after that.
Ajay DD Singhania
So regarding our specific initiatives especially to grow the small domestic appliances, large domestic appliances as shared earlier, we are Diversifying both by increasing the product offerings as well as diversifying into acquiring of new customers. So especially in small domestic appliances, we have increased our product portfolio by introducing two new products in the current quarter, the last quarter, air fryers and Nutri blenders. Going forward, we have plans to further expand our product portfolio and introduce newer products like coffee makers, towerfence airframe, air purifiers, etc.
So with this expansion of product categories and acquisition of more customers, we are poised on strong growth. Similarly for large domestic appliances, our washing machine category, we already started the fully automatic top load washing machines. Going forward, the company is also launching the French load washing machines as well as the semi auto machines. So with this we believe that we will have a complete bucket of basket of product offerings to the customers. And definitely the growth in both the SD and LDA categories is very high.
Sucrit Deep Patel
Thank you. My second question is to Mr. Lodha. With EBIT margins improving over 100bps year on year, how are you planning to balance cost efficiency with capital requirements for scaling SDA and lda? Could you share how the company is approaching working capital optimization and funding to support multi category growth while still protecting the profits? Thank you.
Unidentified Participant
So while evaluating any product, whether it is sda, LDA or any line, we deploy the capital allocation very diligently. We monitor the cost on our products wise and return on each and every product. Before launching any product, our internal team and every RD team develop the product. And once the product is validated and approved by the customer and desired IRR and return is being calculated, that’s why we make the investments. So despite the increase of the our portfolio and other things, our EBITDA margin is increasing.
And going forward when the scale will be there, definitely it will broaden our overall margins.
Sucrit Deep Patel
Thank you for the guidance and I wish the entire team best of luck for the next quarter.
Unidentified Participant
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah, thanks for the opportunity and congrats to the team for good set of numbers given the volatility in the entire segment. Sir, two questions. One, how do you see the overall AC industry panning out? One, what was the growth in December quarter? Secondly now from January we have shifted to new BE tables. So what has been the price hike again? Copper and aluminum prices have gone up. So how it will have impact on the pricing of the products? E waste cost has also gone up. So considering all these things, how do you see the impact on the pricing of the products?
That is question number two and three in terms of overall, how do you see the entire sector panning out at least in Q4? Because at least so far we have seen or whatever channel checks we have done is we understand the growth has been bit slower in December and again Even in initial 15 days of January also. Yeah,
Ajay DD Singhania
Thanks Anil. I think you are already aware that the first two quarters where the industry DE growth was anywhere between 25 to 30% kind of degrowth is what the industry has been experiencing on primary sales. Whereas as far as secondary sales is confirmed, the degrowth has been close to 15% for the first two quarters. Post the GST reduction there was some slight recovery and so Q3 was a cheer for the industry that the degrowth has reduced. And presently it seems that on the secondary side the degrowth is anywhere around 10 to 12% on top of it.
Especially for manufacturing there was a big push especially in Q3 to ramp up production considering the upgraded BE norms coming into effect from January. So the demand for RSE is gradually improving. With implementation of new BE norms, the industry has begun, especially from mid of January, the production ramp up has again started for the newly rated BE production Q3. There has been liquidation of primary inventory by most of the brands as far as we know since these products could continue to be sold in the trade till end of June.
So the channel inventory is definitely a little high, but it is expected to normalize post Q4FY26 supporting healthy demand and production planning going forward. And especially with B new products. There is definitely a cost escalation on account of the newly designed product as well as Commodity impact of Q3 getting passed on to Q4 would be minimum. So both the as well as the commodity impact currently seems around 8 to 10% especially for the production ongoing production in Q4 currently and any further increase in commodities definitely will have further impact on the pricing going forward.
Having said that for EPEC the margins are still protected because for us all commodities are passed through so that protects us. But that definitely remains the concern considering the market demand outlook, if the commodities continue to grow at such significant high levels.
Aniruddha Joshi
Sure sir, understood, helpful. But do you see the primary sales would have happened means like the brands like Voltage Bluestar would have sold to the trade and hence the inventory at the brand level would have gone down. So there will be more need for manufacturing and they will be sourcing more products from us in Q4. Will that be a fair understanding?
Ajay DD Singhania
Absolutely, yes. So yes, both Q3 and now Q4 the demand outlook is Very robust and all the brands are planning growth over Q over financial year 2425. Because FY 2526 has anyways been a bad year. So most of the brands are planning anywhere between 15 to 20% kind of growth over FY24 25 numbers. And based on it the current order book is very robust for us. And we firmly believe that this momentum will continue and the demand outlook as of now is very positive.
Aniruddha Joshi
Okay, sure sir, very helpful, many thanks.
Operator
Thank you. The next question is from the line of Praveen Sahai from PL Capital. Please go ahead.
Praveen Sahai
Yeah, thank you for opportunity. Sir, just a clarification to what you had given some numbers like 25 to 30% of a decline in the first half of you know the primary sales which has reduced to 10 to 12% what you said by nine months.
Ajay DD Singhania
To. Praveen at 25 to 30% degrowth was in primary sales whereas the secondary sales was still at 10 to 12% over last nine months. Which means the inventory buildup which has happened in previous year was kind of solo.
Praveen Sahai
Okay. And secondly on the you know you had also guided for the way forward 20 to 25% of a growth for you. So you, you, you are expecting whatever the liquidation by the brands especially in terms of the primary sales which has happened in the Q3 that giving you indication that’s the way forward the growth for you.
Ajay DD Singhania
So currently in line with our discussion with most of the large brand customers, most of the brands have planned 15 to 20% kind of growth over FY 2425 numbers. And the current RFQs and order book is in line with such escalated demand.
Praveen Sahai
Okay. Okay. And on the pricing, 8 to 10% of a price hike to pass on the inflation. So that is for you, you are talking on or at the, you know the brand label or the sector label you are talking about 8 to 10%. So this is across
Ajay DD Singhania
Industry. Sorry Praveen, this is a cross industry for both us as well as the brand. The kind of increase which has already impacted the ongoing production with the new be rated products. So part of it accounts is on account of the new star rating and part of it is the commodity impact which has already which is already impacted industry in last quarter.
Praveen Sahai
Okay. Okay, fine sir. And now moving to the another, you know the part of your business which is a component and in the component you had mentioned that there is a good order pipeline of a PCB copper parts and the plastic molding. So which product order pipeline is on the higher side? Is it more towards a Plastic moulding or some other product.
Ajay DD Singhania
So for us, component business as a whole, all the three categories, the copper parts, plastic and PCB are rapidly growing. For plastics especially, we are doing a lot of components like cross flow fence, wherein we have approvals from almost all the Marq clients. So plastic parts, PCBs, copper, all three, the entire component segment is what we see growing at a much faster rate.
Praveen Sahai
Okay.
Ajay DD Singhania
These are also for other diversified appliances.
Praveen Sahai
Okay, okay. Also if you’ll give us some indication on all the four segment like rse, sda, NLD and the component. How is the margin profile?
Ajay DD Singhania
Since we are not reporting margins at segmental basis, I can briefly talk in at a very high level, I can talk in terms of overall gross margins category wise. So even in my earlier calls I’ve seen that for ac, being a high ticket size product, the margins are, the gross margins are the lowest. Whereas for the small domestic appliances, the low ticket size products, the gross margin is relatively better. So considering our overall gross margins net of bond cost at around 14 to 15% level, which is largely indicative of the gross margins in air condition for small domestic appliances and large domestic appliances, the gross margins are comparatively better at around 16 to 17%.
And similar is the case with the components. So hence, like we see for the results declared in Q3, the margin improvement has been on account of the increased revenues from the other sectors. The other segments.
Praveen Sahai
Right. And any indication like how your X of the RAC segment contribution for next year.
Ajay DD Singhania
So going forward we will continue that our growth in sda, LDA and components will be much bigger. And whereas the AC will also continue to grow. So our overall guidance remains that AC will be around 60 to 65% of our total revenue. Small domestic appliances at around 12 to 15% and components again at around 20%. So that is the kind of overall guidance we have for the product mix and the revenue mix.
Praveen Sahai
Right? Right, sir. And just a clarification sir. Lastly, that 20 25% value terms you had, you know, indicating. Yeah. Yes,
Ajay DD Singhania
Thank
Praveen Sahai
You sir. And all the best.
Ajay DD Singhania
Thank you so much.
Operator
Thank you. Next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Raman KV
Hello sir, can you hear me? Yeah, I just have one clarity. You have spent 20 to 30% revenue growth in the coming year. So this is on the FY27, 24 days or FY20, sorry, FY25 days or 26 days, the growth.
Ajay DD Singhania
So for FY27, we, I. We have not specially shared any revenue guidance as such. We are talking about the industry growth and the growth in air conditions. So we are discussing that the growth of AC market is currently seems to be at around 15 to 20% kind of growth in AC numbers for the industry for the current discussion? Yes.
Raman KV
So you are expecting after 3/4 of day growth. You are expecting 2030% growth in future with respect to AC. If I’m. If my understanding is right.
Ajay DD Singhania
So we are talking again I repeat. So this is in line with the Calendaria discussion for the seasonal AC market. So for the current coming season of EC the markets is planning a growth of around 15 to 20% over the FY24 25 number. Because the calendar 26 was a degrowth. So calendar 26 seems that the market will grow at around 15 to 20% over calendar year 24.
Raman KV
This is the
Ajay DD Singhania
Industry growth we are discussing. Yeah.
Raman KV
And so I just want to understand your capex plan. Can you give us a ballpark update on the capex current ongoing capex and future capex with respect to washing machine and component manufacturing expansion.
Ajay DD Singhania
In our opening for this financial year we have given a guidance that the company is looking at an investment of around 450 crores over next 12 to 18 months. Months. In line with that the company has already incurred a capex of almost 220 crores in last nine months. So in quarter one we had an investment of around 45 crores. Quarter two 130 crores. And quarter three in the last quarter another 45 crores. So totally 218 crore is something the company has already capitalized in last nine months. And another six to nine months we are looking at an additional 225 crores.
Raman KV
Understood sir. Answer my final question. If possible can you give us a guidance for the coming year?
Ajay DD Singhania
So the growth in AC is expected to be around 15 to 20% for the coming four to five years. And the company is poised strongly to grow at a much faster rate. At least at 20 to 25 30% growth in AC in next till 2030 is the kind of outlook we have. Whereas our segments like LDA would grow at a much faster rate. So while we continue to grow for ac, our growth in sda, LD and components would be much higher.
Raman KV
Understood sir. Thank you. Thank you so much.
Ajay DD Singhania
Thank you. Thank you Raman.
Operator
Thank you. The next question is from the line of Anupam from SUD Live. Please go ahead.
Raman KV
Hi sir. Good morning. So if you can highlight what is the.
Unidentified Participant
Can you bit louder?
Anupam
Yes sir. Semi audible now.
Unidentified Participant
Yeah,
Anupam
Yeah. So if you can give us some. Light on the old rated Stock in. The industry and what sort of our brand saying on the new rated how and how the order think up and ramp up is happening as such, what is the strategy from the brand in the new rated units?
Ajay DD Singhania
So as far as the old rated product is concerned, the last date of production for the same was 31st of December. Our estimate is currently and the trade inventory put together the overall inventory level in the market is approximately at 4 to 4.5 million is the kind of inventory currently in the trade which which includes the inventory with the trade partners, brands everywhere put together as manufacturer we are not allowed to carry any inventory of the old rated product. So we have zero inventory of the old rated product.
This inventory for the. Over Q4 however it is allowed to be sold till June of 26. The new rated production. The production for the new rated product for everybody. This is gradually ramping up. Going forward the entire production has to be done with the new rated product only.
Anupam
Okay, so just one more you may have repeated on the summer outlook. How are we ready? Do we see let’s say first half any growth than the last year? Because last year there was a good sort of production happened. How production or sales do you expect in this first half of next FY27?
Ajay DD Singhania
So for the current calendar year Jan to June, if I talk about last like I’ve been repeating, the industry is preparing itself for a growth of almost 15 to 20% on calendar year 26 numbers. Hence we are very positive that both Q4 January as well as April to June are going to be significantly better as compared to the last financial year. And the industry is looking at a growth of 15 to 20%. However having said that for the entire financial year 2526 we believe that the industry the growth would be close to 10 odd percent overall.
Anupam
Got it? Understood sir. Thank you. I’ll join back in a few.
Operator
Thank you. The next question is from the line of Disha from Sapphire Capital. Please go ahead.
Disha
Hello. Yeah, hello.
Raman KV
Yeah, yeah,
Disha
Hello. Yeah, yeah. So I think you mentioned that around AC I think we’re targeting 60, 65% and SDLD around 15, 20% and components the rest 20%. Right. For next year. Yeah, it’s a product mix. But like going ahead because you mentioned that we see LDSD and component going much faster then the EC growth. So what is the sort of outreach product mix you have say two, three years down the line.
Ajay DD Singhania
Medium to long term horizon? This is the outlook that we are trying to diversify and reduce our overall dependence on AC. And as we can see over the last three years we have gradually reduced dependence on EC from 80% to now currently 57 or 60% and it will further further reduce to around 55% in a medium term, let’s say till FY28, 29 kind of. So that’s the overall guidance that AC contributing 55% of the overall revenue and our SDA LDA growing to 25% and component another 20, 25%. So that’s the overall revenue which the company is looking in the medium term horizon.
Disha
Okay, in the medium term. And so for FY27, what sort of EBITDA margins are we targeting?
Ajay DD Singhania
Again, we don’t give guidance on financial to financial basis. But overall the company is confident that we will maintain margin, an ebitda margin of 7.5 to 8% in medium to longer term horizon.
Disha
Okay, all right, that’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Tanesha from Dam Capital Advisors. Please go ahead.
Tanesha
Hi sir, just one question, just a couple of questions. Can you
Unidentified Participant
Be louder?
Tanesha
Yeah. Am I better now?
Unidentified Participant
Yes.
Tanesha
Yeah, just a couple of questions. Right. Starting with ac, you know, we’ve spoken about how channel inventories are yet at around 4, 4.5 million. And you know, commodity inflation to that extent also calls for price hikes which are pretty steep. So going ahead while you’re expecting, while the brands are also expecting a 15, 20% sort of a growth for the calendar year, how can, what are the potential risks to this growth which you are seeing obviously, you know, with this whole commodity inflation sort of playing out.
So there is one bit where brands are sort of positive on demand, but at the same time you have these costs, you know, coming up as well. So what would you sort of, you know, comment on that?
Ajay DD Singhania
So today you are an industry expert, you know that the risk with any industry, and especially seasonal industry like ac, especially the demand in terms of the seasonal lift is always there. But however, especially when we are talking about the India market and the overall potential, the tailwinds are still strong with the lowest penetration of bad season does not indicate that the overall industry is not poised to grow. So like I’ve been repeatedly sharing a 15 to 20% kind of growth, growth in medium to long term horizon is what the industry is definitely poised to achieve.
And by almost 2030, the industry is looking at the demand of Anywhere up to 28 to 30 million is the kind of numbers what everybody is projecting. So the overall tailwind still remain very strong and especially with now the BE ratings improving year on year the efficiency is going high, the electrification, the incomes, per capita income improving. We don’t, we have witnessed that in last three to four years the overall seasonality effect has reduced and AC is becoming more of a uniform demand across quarters, although not to that level.
But then it is significantly improving every quarter. Hence any seasonal risks are getting reduced year on year. And especially if we are worried about one bad off season in calendar year 25, it has to be also looked from the perspective that the year previous to it it grew at almost 30% plus. So already at a much higher level. This kind of risks are always there. But now the overall demand situation seems to be more rational and uniform. Hence the risks are bare minimum.
Tanesha
And second, in your opening remarks you also spoke about how washing machines can be a meaningful contributor to revenues and margins. So you know, any comments on how we’re sort of scaling that up? You spoke about getting into top loads and then front loads also. Given that, you know in the industry there is barely any outsource which happens for front loads almost minimal. You know, what is our plan out there in terms of washing machines?
Ajay DD Singhania
So Tanay, in terms of washing machine, we had started our top load fully automatic washing machine almost 2/4 ago and now we see significant ramp up happening with acquisition of two key new multinational customers with whom the demand outlook is extremely good. And this gives us a lot of confidence. We are already witnessing a large ramp up happening in our washing machine category. And with our Hisense jv, we have already started now the setup of our new line for the front load again wherein we see Hisense as one of the key customers and then other customers are also in the pipeline.
So like you rightly said, currently there is no meaningful outsourcing happening for the front look. But at the same time there are no established manufacturers also in India for the front load. So that gives us confidence and this is what we see as a growth contributor which will then drive our further growth in washing machine category. Semi automatic or twin tub is more is a category just to fulfill the entire product catalog, the product offering. So for us the focus remains largely on the fully automatic, both top load and front load.
And we see significant ramp up happening in next three to four quarters.
Tanesha
Got that sir. Okay. Thank you sir. Thank you.
Ajay DD Singhania
Thank you.
Operator
Thank you. The next question is from the line of Ashish Jain from Macquire. Please go ahead.
Ashish Jain
Hi sir. Good morning. So my first question is, you know this 15, 20% growth you’re talking about is volume terms, I assume.
Ajay DD Singhania
Yes,
Ashish Jain
That’s for then okay. And the secondly, you know the four four and a half million inventory that you spoke about at the end of September with the channel and all, what would it be in a normal year? Will it be like half of that number?
Ajay DD Singhania
Again these are estimated numbers but typically the opening inventory in the January for the industry is to take care of the the projected sales in the current quarter. So that’s how the overall inventory levels are typically. So again it would be a very rough estimate, but not half. If today we are seeing four and a half million, probably the earlier years it would have been at around 3 or 3.5 million. So the inventory levels are now not significantly high. So they are well within the band of let’s say excess of 20% or so.
Ashish Jain
Got it, got it. And so just lastly, you know in terms of the cost or price inflation when you spoke about 8 to 10% price hike is required that is factoring the current commodity prices or what does that factor in terms of commodity?
Ajay DD Singhania
In terms of commodity there is a lag of one quarter. So it factors the commodity of previous quarter which is October, November, December.
Ashish Jain
The. Average of that quarter which I’m just, I’m asking because you know it has been a one way direction in terms of commodities. So when you say previous quarter is it average of that, how does it work?
Ajay DD Singhania
Average of October, November, December. Yeah, yeah, yeah, yeah. Is
Ashish Jain
Already higher, right?
Ajay DD Singhania
Yes. Very broadly if I say 8 to 10% hike in price, 50% of it is contributed by the re rating of the products the BE and almost 50% because of the commodity increase in the last quarter. October, November, December. So that is something which will impact the new rated product which is currently ongoing in Gen 7 March quarter.
Ashish Jain
Got it, got it sir, that’s very helpful. Thank you so much.
Operator
Thank you. The next question is from the line of Sabhanu from Tree Head Capital. Please go ahead.
Sabhanu
Hello, Good morning. Hope I am audible.
Raman KV
Can
Sabhanu
You hear me?
Raman KV
Yes sir, yeah
Sabhanu
Sir, I am very new in this industry and in this company. Sir, can you tell me our payments day reduce drastically? This is forest seasonal phenomena.
Unidentified Participant
Can you be clear? And so we are not able to.
Sabhanu
Okay. Our payable days reduced drastically. This is a free level scenario.
Ajay DD Singhania
Okay so the paid payable due for us has reduced because we have been carrying inventory paid inventory and there has been no new procurement done largely in the last quarter. Whatever inventory was left over because of the the demand being going down to two unseasonal rains has now been consumed in the last quarter. So there was.
Sabhanu
Okay, okay. But what is, what are, what Is the normalized table this and going forward we can expect.
Ajay DD Singhania
Normal. Normalized table days are between 90200 days. Okay.
Sabhanu
Okay. My second question is which of the revenue we are calculating in the other income, the other segment.
Operator
Sorry, can you please rejoin the queue for more questions?
Unidentified Participant
Other other revenue includes the basically whatever the. So whatever the basically component which are supplied as a spare part. This is known as other. And apart from that there is a other income which is there in other income not in other revenues. So there is around 100 produce there which is basically spare parts obviously.
Sabhanu
Okay, okay. Okay. Thank you sir. Thank you.
Unidentified Participant
Thank you.
Operator
Thank you. The next question is from the line of Ashiya Khosla from Nirmalban Institutional Equities. Please go ahead.
Arshia Khosla
Yeah, hi, thanks for taking the session. So I just want to understand on the components part of the business, it has been growing good for the previous couple of quarters. So AC basically being very muted. The AC industry, what is leading to this components group? I mean is there some, what are the different specific industries that you are also supplying to? Apart from recommendation
Ajay DD Singhania
Asia component sales for. Us is to not only AC industry, it is to electrical meters, it is for coolers, it is for washing machine. So there are multiple products categories or appliances wherein we are supplying the A component.
Arshia Khosla
Okay. And on the LDA as well, I mean we’ve seen a good growth in this quarter. So what is, what are the specific products? If you could just highlight for LDA demand.
Ajay DD Singhania
Lda, currently we have only two product categories. Cooler which is now almost a year old product for us. And then second is the newly introduced washing machines. Coolers and washing machines are the two categories and both are very new and we see significant ramp up happening in the coming quarters in both the categories.
Arshia Khosla
Got it. But I’m assuming coolers have still been muted this quarter. Right. And so the basic demand is coming from washing machines only.
Ajay DD Singhania
Yes.
Arshia Khosla
Got it. And lastly how are we placed on Hysense? I mean are we completely on track for and for Hyson specifically for rec, Are we doing a new product?
Ajay DD Singhania
So hisense like we’ve been sharing earlier. One is the ODM product which is currently being supplied from our existing 3CCT plant. So that ramp up is happening and so suppliers have been consistently going on in the last year. The newly formed JV facility which was under construction has now completed the construction and trial production is on track and have progressed very well with all three milestones achieved. The facility is now ready to commence production in the current quarter which is Q4FY26 the plant will initially manufacture RFCs for domestic market and will gradually expand to fit export market particularly focus on Middle East GCC countries in Africa.
And this facility will not only be confined to recs for hyses going forward the plan is also to manufacture the fully automatic top front load washing machines and then TVs also which will start we will start ramping up and introducing every quarter. So there is a large pipeline and a complete roadmap in place to streamline the overall production products and customers at the Hisense jv.
Arshia Khosla
Sure sir, thank you, that’s helpful.
Operator
Thank you. The next question is from the line of Mr. Achal Lohade from Nuama Institutional Equities. Please go ahead.
Achal
Yeah, good morning sir. Thank you for the opportunity. Just wanted to understand in terms of the cost impact, you know, while you have talked about in percentage, but I just wanted to understand, you know, on an absolute basis for a three star inverter which is the most popular sku, what is the actual BOM increase in price? What you have seen basis October, November, December prices, is that closer to 2000 rupees? Is that 2500 or more of 1500?
Ajay DD Singhania
So actually it’s an interesting question. It will be difficult to answer in absolute terms because it will vary from brand to brand and model average. Yeah,
Achal
Yeah, fair point. But
Ajay DD Singhania
On an average like I shared earlier, especially for three star the cost increase because of the be upgradation is anywhere between 3 to 5% whereas for a five star it is let’s say slightly more. At 5 to 8% and similar is the commodity impact. For three star the commodity impact of the last quarter compared to the last year December quarter is 5 to 6% whereas for the 5 star it is slightly more. So when we say that the overall cost increase is 8 to 10%, it is considering an average of 3 star and 5 star the increase on 3 star is slightly less whereas on 5 star it is more.
And hence we have seen that even in last quarter majority of production which was being done by the brands have been focusing towards increasing the five star production.
Achal
Understood. And given the prices have risen, commodity prices have risen further in Jan, does that mean that there has to be further price increase in April, May, June? For you
Ajay DD Singhania
The current quarter impact is something which still needs to be assessed and I think we will be in a better position once it stabilizes. So because it has to be an average of at least January, we will have to slightly wait and watch how whether it stabilizes or it continues its upward trend. But under the current circumstances the second price increase is something which is imminent.
Achal
And is it fair to say that, you know the pricing methodology is fairly standard across the industry, across the players, across the brands?
Ajay DD Singhania
Yes, it is more or less industry standard.
Achal
So the margins are on a per unit basis. Have I understood right sir?
Ajay DD Singhania
Yes.
Achal
So theoretically a percentage margin could look lower in FY27 if the current prices were to sustain.
Ajay DD Singhania
So it is difficult to put numbers in that way. But yes, if the commodity impacts are passed as it is or as a pass through per unit basis, yes, the margins will might look slightly subdued but the overall EBITDA and the growth will still continue.
Achal
That’s fair point. Thank you and I wish you all the best. Thank you so much. Thank
Ajay DD Singhania
You so much.
Operator
Thank you. The next question is from the line of Balasubramaniam from Arihan Capital. Please go ahead.
Balasubramanian
Good morning sir. Thank you so much for the opportunities. Sir, we are strategically expanding components, specifically energy meters audio through EPAC components or audio. And how do, how does the margin and ROC of these new component businesses compared to legacy roc component business? Mr.
Ajay DD Singhania
Balar, I think I answered these questions previously. Also I repeat the same. Since we are not reporting at segmental basis EBITDA margins for us, I can largely give an indication in terms of the overall gross margin. So the material margin in component is comparatively better as compared to the overall RAC which is typically at 14 to 15% material margin. The component gross margins are somewhere at 16 to 18% kind. So that’s again a very broad guidance because we are not reporting numbers at segmental basis.
But that’s broadly the guidance I can tell you.
Balasubramanian
Okay sir. So I think three years back top two customers nearly accounted for nearly 70 percentage of revenue. I think it’s been reduced to 38% in Q3, nine month FY26 and maybe next two to three years time frame. So what kind of further diversifications we can expect? I think we are adding lot of new customers. I think recently we also had a partnership with Panasonic and Daikin and I just want to understand how these diversifications will happen over next two to three years time frame. And also you can mention what are the upcoming products like tower fan, hair dryer, air purifier.
So what are the expected launch timeline and addressable market for these products?
Ajay DD Singhania
Mr. Balak Suramin I think we have now reached a very ideal situation wherein the top two customers contribute to 35 to 40% kind of revenue. While we continue to grow our other product categories. We are very mindful that we also need to look at increasing our wallet share from the existing customer. So one way wherein we continuously keep on reducing because we also want to increase our wallet share with each of the existing MARQ clients. So at the current level we think we’ve optimized it largely in last three years, reducing from almost 70% plus to today 35 to 40% and this seems to be quite an ideal number.
Any further reduction is not what we are looking at. We are looking at increasing our wallet shares by offering diverse products to the same customers. Because cross selling is something which definitely helps us to achieve better revenue growth and better margins. So but anyways, in the medium to long term we see that our Overall dependence on top two to three customers should be maintained anywhere around 50 odd percent.
Balasubramanian
Okay, so my second question, I already mentioned that upcoming products like tower fan, hair dryer, air fuel repair. So what are the expected launch timeline and addressable market of these products?
Ajay DD Singhania
So each of these markets are part of our overall SDA growth roadmap, wherein every quarter we are looking to launch new product categories 1 to 2 newer products and then look at gradually ramping up. So in the current quarter, quarter four we are looking to launch at least two new products, vacuum cleaners and tower fans and then slowly use them as so this would be the launch pad and then gradually start ramping up this product category. We also understand the limitations that we cannot continuously keep on increasing the overall product categories year on year.
So especially in small domestic appliances, we want to limit ourselves at overall product offerings of 8 to 10 numbers and then create each category as a growth lever and then do both horizontal and vertical deployment by way of backward integration and then penetrating newer customers, increasing the product portfolio. So the next journey would be on increasing the margins in the newly launched product categories by way of backward integration, increasing our market share. So yes, we are increasing the product category, but at the same time we are also very mindful that it consumes a lot of bandwidth so we cannot keep on increasing continuously.
Balasubramanian
Got it sir.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to one per participant. Should you have a follow up question, please rejoin the queue. The next question is from the line of Vidisha from cr, Kotari and France. Please go ahead.
Disha
Hello sir. Given hello in audible. Yeah. So given the revenue, it’s declined around 13 14%. So what is the outlook for quarter four? Like? How will FY26 pan out? Any revenue and Margin guidance.
Ajay DD Singhania
Vidisha I think last like I have shared earlier since RFC contributes almost 7065 to 70% of our overall sales and wherein we have witnessed the industry to DeGrow at 10 to 15% is what the industry degrowth we estimate at the end of this initial year. So in line with that our key sector AC definitely we will see an overall degrowth. But for the overall revenue numbers our other levers like sda, LDA components have helped us recover a lot of that lost revenue. And at best currently we are estimating a flattish kind of revenue for the current financial year FY 25, 26 or a marginal growth.
So at best a flattish or a marginal growth in overall revenue numbers what we are looking or in another way we are saying that the degrowth in AC we are looking to recover from our growth in the other diversified sectors.
Operator
Thank you. The next question is from the line of Aryan Bhatia from Inwed Research. Please go ahead.
Raman KV
Thanks for the opportunity sir. My question is on ipavu. So if I look at the past few quarters it has been constantly making process and we have beginning the commercial. Production in Q2 FY26 and if I. Look at the history of the company as well it has been making losses. So what gives us the confidence that. We will be able to make the loss making company profitable in the upcoming few quarters.
Ajay DD Singhania
So Aryan IPAVU for us is a strategic investment. So it is not only a backward integration, it also helps us position support the growing demand for energy efficient. Since the DD rating is updated every year, application is increasing every year. And we are not only looking to manufacture motors for AC but also for other appliances like washing machines, fans, HVLS fans. So the new greenfield facility in Kwadi commenced production trial production in end of Q4 Q3 we have seen the ramp up happening and as in Q3DC market has recovered.
There has been some sales which has happened. But more importantly for us the approval from all the key clients has happened and Q4 onwards we are looking at reducing first the loss year on year and definitely FY27 we will see this company turning into green from red.
Operator
Thank you. The next question is from the line of Karan Gupta from acmil. Please. Your slide is unmuted. Please proceed. Yes please.
Raman KV
My question on the order book side, do we have order book on ST LDA component side. Any discussion on that?
Ajay DD Singhania
Yeah. So current we have a projections. So for this industry the order book is not confirmed. It is always 612 months of projections received from the customer. So in terms of order book for both SD and lda, it is extremely encouraging to see the growth in SD LDA categories both. So this gives us a lot of confidence that these two categories will drive both revenue growth and margin growth for us. And we see significant improvements going forward both in SDLD categories. The current existing product as well as the newer product categories.
What we are sharing that we will be introducing them in the coming quarters. So yes, the order book is there. These are not in terms of confirmed pos. These are always in terms of predictions. Free from there.
Operator
Thank you. The next question is from the line of Deepali Bansal from Ventura Enterprises. Please go ahead.
Deepali Bansal
Hello sir. Good morning. Would you be able to give me the revenue potential of the recently launched. As you’ve mentioned that air fries we might sell 1 million units for 200 crores in the next coming years. Would you be able to give us some like what is the revenue potential of let’s say infrared back in two years coffee blender, coffee makers and Nutri vendors.
Ajay DD Singhania
Each of these smaller appliances like air fryers, infrared coffee blenders. These each are in three digit categories. So they are 800 to 1000 crore categories each in terms of market potential. And we are looking to slowly increase our wallet share in this category starting from 0 to 20% 30% in years to come. So that is we believe that each of these categories could ramp up to be 150 to 200 categories in a medium horizon of three to five years.
Operator
Thank you. The next question is from the line of Heta from Monarch aif. Please go ahead.
Disha
Yeah. Hi sir, we had one question. Our interest cost in this quarter has come down from earlier 20 crores
Operator
To now 13 crores. Could you help me understand how were we able to bring this down?
Unidentified Participant
I think there is some error in your review. The cost is similar up in the last quarter. So definitely we are consistently improving our inventory level and working capital. And we are geared up to reduce the interest cost. But it is the same as last quarter.
Operator
Ladies and gentlemen, due to time constraint. That is the last question for today. I now hand the conference over to Mr. Tanesha for closing comments. Thank you. And over to you sir.
Tanesha
Thank you sir for. For giving us an opportunity to host the call. Wishing you all the very best for fourth quarter and the upcoming year. Any closing comments on your side?
Ajay DD Singhania
Yeah. So thank you all for participating in this earnings phone call today. I hope we have been able to answer your questions. And thanks to DAM Capital for hosting people. Thank you so much.
Operator
Thank you all on behalf of Dam Capital Advisors, Ltd. That concludes this conference. Thank you for joining us today. And you may now disconnect your.
Ajay DD Singhania
Thank you. Thank you.