Epack Durable Ltd (NSE: EPACK) Q4 2025 Earnings Call dated May. 28, 2025
Corporate Participants:
Rajesh Kumar Mittal — Chief Financial Officer
Ajay DD Singhania — Managing Director and Chief Executive Officer
Analysts:
Bhoomika Nair — Analyst
Aniruddha Joshi — Analyst
Arshia Khosla — Analyst
Hemant — Analyst
Unidentified Participant
Balasubramanian — Analyst
Hiten Boricha — Analyst
Abhisar Jain — Analyst
Ashish Rathi — Analyst
Presentation:
Operator
Ladies and gentlemen, good morning, and welcome to the EPAC Durable Limited Q4 FY ’25 Earnings Conference Call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will remain in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. I would now like to hand the conference over to Ms Bumika Nayer from DAM Capital Advisors Limited for opening remarks. Thank you, and over to you, Bhumika.
Bhoomika Nair — Analyst
Thanks, and good morning, everyone. A warm welcome to the Q4 FY ’25 earnings call of EPAC Durable Limited. We have the management today being represented by Mr Bajrang Gotra, Chairman and Whole-Time Director; Mr Ajay Signania, Managing Director and CEO; and Mr Rajesh Kumar Mittal, CFO. At this point, I’ll hand over the floor to Mr Mittal for his initial remarks, post which we’ll open up the floor for Q&A. Thank you and over to you, sir.
Rajesh Kumar Mittal — Chief Financial Officer
Thank you.. Thank you, and good morning, everybody. Welcome to our earnings conference call to discuss the performance of the 4th-quarter and financial year ending 2025, let me first thank our host of today’s earning call, DAM Capital. Now let me give you some of the key financial highlights for the quarter and period under review. For the 4th-quarter under review, revenue from operations stood at INR3643 crores, which increased by 22% year-on-year. The EBITDA stood at INR72 crores, which increased by around 30% year-on-year with EBITDA margin reported at 11.21%. The net profit was around INR38 crores, which increased by 36% on year-on-year basis. For the financial year ending 2025, revenue from operations stood at INR2,171 crores, which increased by 53% on year-on-year basis. The EBITDA was reported at around INR158 crores, which increased by around 36% on a year-on-year basis. The EBITDA margin reported at 7.26%. The net profit was around INR55 crores, which increased by 56% on a year-on-year basis. On the balance sheet front, we closed the financial year 2025 with a net-debt of INR355 crores, representing a net-debt to equity ratio of 0.37 times. Now I would request our Managing Director and CEO, Mr Dir Singhania to brief you on the operational highlights. Over to you, sir.
Ajay DD Singhania — Managing Director and Chief Executive Officer
Thank you,. And once again, good morning, everyone. I’m happy to report that we delivered a strong performance in the 4th-quarter and also full financial year 2025, driven the strategic initiatives implemented by the company and the favorable industry tailwinds. During the quarter under review, we added several new customers and benefited from a more optimized product mix, which contributed to improved EBITDA margins and enhanced profitability compared to the previous quarter.
Capacity utilization at plant is being progressively ramped-up as we align operations to meet growing customer demand with enhanced production efficiency and a focus on multiple product categories. We expect this facility to contribute significantly to our margins as it approaches optimal utilization in the coming quarters.
For the quarter, REC remained the dominant contributor accounting for 64% of total operating revenue, reflecting continued leadership in this core category, while product business accounted for 78% of the overall revenue, highlighting strong customer traction and portfolio strength. We also witnessed strong business bookings and a healthy pipeline in both small domestic appliances and component segments, supporting our continued revenue growth.
Additionally, our new greenfield project through the joint-venture company in holds substantial revenue potential and is expected to further strengthen our potitioning component space, which will commence production from Q2 of FY ’26. Further, our new wholly-owned subsidiary, EPAC Manufacturing Private Limited, which is being — which is under-construction for our business.
The construction is ongoing in-full swing and we expect to commence production towards the end of FY ’26 end-of-quarter four or beginning of quarter one — quarter-four. For the financial year ending 2025, we closed the year-on a strong note with continued momentum across all segments. Revenue growth was witnessed across all segments with robust bookings and inquiry. RSE business revenue grew by 50% year-on-year, while we witnessed excellent year-on-year growth in other segments,
SDA growing by 20%, components growing by 124% and the newly introduced large domestic appliances during multifold due to increasing customer-base and adding new product verticals. To conclude, with over 55 established customers onboard and Boardways growth across segments, we are well-positioned to drive sustainable and profitable growth into FY ’26. We plan to invest approximately INR450 crores to INR500 crores over next 12 to 18 months-to expand manufacturing capabilities and support our wholly-owned subsidiary to cater to increasing market demand for FY ’27 and onwards. A
Dditionally, we aim to enhance our ODM footprint by entering into new product categories and market verticals, positioning us for the sustained growth. With this, we now open the floor for Q&A session. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two.
Questions and Answers:
Operator
Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Aniruddha Joshi from ICICI Securities. Please go-ahead.
Aniruddha Joshi
Yeah. Sir, thanks for the opportunity and congrats for a great set of numbers. Sir, two questions. Now obviously means these are again, I guess, asked to you multiple times, but how do you see the Q1 panning out considering there is a monsoon all across India and especially South India demand is also impacted and now we have seen in later part of May, even the North India demand is also peak. So with trade flush with huge inventory, I guess there is an impact on primary sales. So how do you see the — in a way the industry panning out?
And how do you see EPAC navigating this issue? And then secondly, on the compressor issue, so what is the latest update at the EPAC side? So how do we plan to go-ahead? Because at some point of time, compressors will become almost in a way need to be manufactured in India. So what will be the long-term — medium to long-term solution that we are working on?
Ajay DD Singhania
Thanks, Aniral. So first of all, coming to the grains and the seasonality in Q1 of FY ’26, definitely — I mean the market has been in fact to the extent that especially May has been a bad month, let’s say, for the AC sales, especially the secondary sale and the market definitely seems to be carrying inventories. But at the same time, we also need to look at the overall AC demand being sustainable year-on-year. So in short-term, definitely for Q1, there seems to be some concern.
But overall, we are very positive with the kind of outlook we have received. And with the kind of customer diversification and growth we have embarked on, we are very positive that we would be able to deliver a positive growth in FY ’26 and the market also seems to be on-track to deliver overall positive growth in this FY ’26.
In terms of compression, the government had given some respite by extending the by year. So as of now, there is no concerns in terms of availability. At the same time, the capacities by the established players, both GMCC, and the JV company with are on-track and it seems it with the capacity is being ramped-up to cater to the domestic market.
So in the long-term, we definitely believe that sufficient capacity will be available in the domestic market and we can always look at strategic relationships with our existing suppliers.
Aniruddha Joshi
Okay, sure, sir. Sir. Sir, any indication in terms of how big would be the trade inventory because whatever we understand it is roughly two to three weeks additional inventory compared to the normal inventory with the trade. So that’s a quite a large inventory and clearing that it may take three, four months also. Also, in a way last year, the Q1 base is also a bit on the higher side. So how big would be the issue as for your interactions with the companies?
Ajay DD Singhania
So anywhere is on the inventory and the overall scenario, we are still in discussion with the key customers. But overall, the customers are very positive in terms of the inventory movement is going-forward in Q2. So none of the customers have indicated any substantial concerns around the issues which have been shared earlier, although some corrections are happening,
But nothing substantial or let’s say, worrying to affect the overall financial year.
Aniruddha Joshi
Okay, sure, sir, that’s very helpful. Yeah. Thank you
Operator
Thank you. The next question comes from the line of Arsia Khosla from Nirmal Bang Institutional Equities. Please go-ahead.
Arshia Khosla
Yeah, hi. Thank you for taking my question and congratulations on a good set of numbers, sir. So in continuation of the previous participants question, have you seen the slowdown or have you seen any order cancellation for quarter one? This would be my first question thank you.
Operator
Ladies and gentlemen, we have lost the line of the management. Please stay connected while I reconnect the management. Thank you Ladies and gentlemen, we have the management line reconnected., if you can please repeat your question?
Arshia Khosla
Yeah. Thank you for taking my question, sir, and congratulations on a good set of numbers. I just want — it’s a continuation to previous participants question. I — so how is the demand? Have you seen some demand slowdown or have you seen order cancellation in Q1?
Ajay DD Singhania
Yes. Okay. So, in terms of Q1, currently, I think it’s more of a wait-and-watch situation as the brands are evaluating the overall demand being lifted or the inventory in the pipeline. So currently, yes, there is some slowdown in terms of lifting the finished goods. But at the same time, the overall projections and the numbers or the order book is still healthy and most of the large customers are very positive that this is a very, very short-term impact of this unseasonal rains.
Overall, the industry is poised to grow at the forecasted 15% to 17% kind of a number. Okay. Thank you.
Arshia Khosla
Thank you for that, sir. And secondly, we have a little pledge on the promoter holding. When do we plan to settle that? In terms of inventory? No, sir, pledge on the promoter holding. By end-of-the next quarter the pledge would be. Can you just know the reason why the reason for the pledge was some of personal loans being set-off by one of the promoter group.
Okay, thank you, sir. I’ll start-up in the queue.
Operator
Thank you. We take the next question from the line of Hemant from RK Advisory. Please go-ahead.
Hemant
Hi, good morning, sir. Am I audible?
Ajay DD Singhania
Yes.
Hemant
Congratulations on a good set of margins. First question is like, sir, there is an expansion of gross margin by nearly 110 bps Y-o-Y and 123 bps Q-o-Q. Could you elaborate the key drivers for this improvement the this margin was improved due to three or four reasons actually.
Rajesh Kumar Mittal
One of the main reasons was that there was a price increase with some of the customers and which helped us to increase the margin on a year-on basis around 2%. And second was the — because of the better efficiency in the change in the product mix. And further there was a — there was a further sale of the components and other products which is being sold at a higher-margin in the mix itself.
Hemant
Understood, sir. Sir, second question is on, are we planning to participate in component PLI scheme? And the ECMS scheme?
Ajay DD Singhania
Yeah, yes, sir. Yeah. So currently the company is evaluating the overall ECMS scheme and since we have another two months-to apply for it, we are evaluating for the possible components wherein EPAC can participate. So it’s an attractive scheme to look at. We have not filed the application as of now, but definitely we are evaluating. And sir, any capex guidance you would like to provide for FY ’26.
So in terms of capex guidance for FY ’26, next 12 to 14 months, as I said in my opening remarks as well, the company is looking to invest close to INR450 crore to INR500 crores. So this is an overall investment, including some of the CWIP which is being already there in the books. The investment is both in the parent EPEC durable as well as the wholly-owned subsidiary and other joint-ventures.
Hemant
Okay. Thank you very much, sir.
Operator
Thank you. Thank you. The next question comes from the line of Yok from Molecule Ventures. Please go-ahead.
Unidentified Participant
So thank you for the opportunity, sir. So could you help us understand what will be our capacity in the BLDC Motors after commissioning the new facility and the current market size for the BLDC Motors in India, the expected growth trajectory, adoption of VLDC motors across applications like seal signs and basis
Rajesh Kumar Mittal
So in terms of the joint-venture company Bavo, the installed capacity once the greenfield plant comes into operation would be close to 3 million units for air-conditioned motors. So primarily this unit is looking to cater to air conditional motors with installed capacity of 3 million.
The overall market AC currently being, let’s say, close to 15 million and there are two motors being used in ACO, the market size currently only for fresh production is closed to 25 million to 30 million motors in which EPA setting up a capacity of 3 million starting from end of Q2. Similarly for fine and others, the capacities are not substantial.
So we are putting up a smaller capacity of only 1 million motors to begin with and then evaluate going-forward if we need to ramp-up the motor capacity. But at the same time, there are other business verticals as well for. So a large — another substantially growing vertical for is the HVLS, the largest HVLS which definitely is something which is going at a much faster rate.
Hemant
Okay, sir. So could you help us understand how many players have entered the space right now? And are we seeing any in terms of R&D or cost structure?
Rajesh Kumar Mittal
For VLDC motors, there are already three to four established players in the country but still the AC industry has been importing almost close to 50% plus motors from — has been imported from foreign market from China and other countries. And as BA regulations and others kick-in, this all is going to get localized.
So in terms of cost-efficiency and competitiveness, we are competitive in the market since last quarter, Q4, we started ramping-up our production at our test facility and we have consumed and got approvals with most of the key customers. So we see a good strength in the motor business.
But it’s also regarding the current 50% is from import.
Unidentified Participant
So I assume there won’t be any situation of oversupply two, three years down the line and any price erosions because all the domestic suppliers will be getting into the market. Am I correct?
Rajesh Kumar Mittal
Yes.
Unidentified Participant
Got it, sir. Thank you. That’s from my side.
Operator
Thank you. We take Take the next question from the line of Bhumika Nayer from DAM Capital Advisors Limited. Please go-ahead.
Bhoomika Nair
Yes, my question was on the presentation, we talked about supplies have already started to-high sense. So can you talk a little bit about that? What kind of volume offtake are we looking at it or what — and the — when will be CCT capacity related to a high sense be operational?
Ajay DD Singhania
So, there are two aspects to our business. One is the ODM business, which means our own design. So design business tail is something which has already started from March and which will continue to grow. And washing machine again is an ODM product which will be supplied to and for which all the test approvals have been done and pallet production has also been commenced and mass production is aligned from end of June.
So that’s on the ODM design products of washing machine and the room AC. In terms of the wholly-owned subsidiary, EPAC manufacturing for which the construction is ongoing, that facility would cater to the high design products, both for domestic and export market and the production is scheduled to start from end of FY this year.
So December, January when we are contemplating to start production. And as the production ramp-up, it would cater to both domestic market and export to MEA countries, Middle-East and African countries and the designs and everything done by in the China fixed facility have already been aligned to the entire international market as well as India market.
Bhoomika Nair
Okay. Okay. And currently, what would be on our own in terms of AC and washing machines, what would be a monthly kind of a run-rate? I understand they might have just started and perhaps will ramp-up through the year, but just to get a sense of what are the initial volumes like
Ajay DD Singhania
Terms of overall market, did they key product currently remains to be the LED TV for which they have been already present in the market since last three to four years. AC is a newer product category for them and they are growing their presence in the traditional — in the retail market and are creating the channel — pan-India channel. So it’s comparatively a smaller market for them.
The and washing machine is a newer category, which they will enter. So the whole idea here is to now enter the general trade with the entire portfolio of products, be it washing machines and the air conditions and then TBP already there. So now they are expanding their overall general trade and distribution network pan-India.
Bhoomika Nair
Understood. Understood. Sir, in terms of the second category, which is SHA, how is demand and offtake, etc., because there also demand we understand is fairly muted. How are you seeing traction out there per se in terms of the overall order booking, etc., that you’re seeing from clients.
Ajay DD Singhania
So moving on small domestic appliances front, yes, the more matured categories like mixer grinders and others have been kind of flattish or growing at a nominal rate of 3% to 4%. But here in the more attractive categories are the ones for which we are looking at localization.
So like air friers and coffee makers. So we have listed a host of categories which we are entering into and this is all being enabled by the implementation of the QCU. So these categories are the ones which previously 100% import. And as we localize, we’re taking a lead-in localizing these categories and meeting the requirements of most of the marquee customers. So we definitely see the growth driver to be these newer categories like air, coffee makers, cleaners, etc.
Bhoomika Nair
Understood. And obviously, you’re already adding more clients for these product categories.
Ajay DD Singhania
Yes.
Bhoomika Nair
Okay. Okay. Sir, the other thing was in terms of two more questions, sorry. One is on the PLI booking for — is there any PLI booking in 4Q and FY ’25 from an — and where-is it accounted for in other income or in revenues? And second is in terms of our capex announcement where we’ve talked about INR450 crore INR500 crores over the next 12, 18 months.
Now what was this capex for given — and we already have just put up the CCT capacity and ramping-up. SSo if you can elaborate a little more on this aspect.
Aniruddha Joshi
In terms of PLI, the PLI book for FY ’25 is INR37.5 crores and that’s in the revenue — operating income for FY ’23 in the 4th-quarter, sir. So it’s booked as per the and debt quarter. So 4th-quarter it is INR19 crores to around INR10 crores. INR10 crores. So IN 10 crore is something which is booked in the Q4.
Bhoomika Nair
Okay, okay. Understood. Understood.
Ajay DD Singhania
CapEx guidance even by us in the INR450 crore to INR500 crores. So this is a capex guidance for next 12 to 18 months, wherein almost INR100 crores is into the wholly-owned subsidiary manufacturing, which is setting up a facility for and around INR150 odd crores is in right is largely to create capacities for washing machines and component and manufacturing ramp-up component manufacturing.
And third is we are setting up a green — another greenfield facility in Diwadi. The product categories and the other announcements will be done subsequently. So Diwadi, we are setting up a new greenfield facility at the New York Avenue block. So this basically includes only the construction, which will be completed by the end of Q1 FY ’26 and then we will set-up the new plant there to increase capacities in them and diversifying our portfolio for the cooling products.
Understood, sir. Understood. Great, sir,
Bhoomika Nair
I’ll come back-in the queue. Thank you.
Operator
Thank you. We take the next question from the line of Balas from Arihant Capital. Please go-ahead.
Balasubramanian
Hello, sir. Good morning. And sir, I think we are adding 50 more customers and launching six new products in this year itself. I just want to understand our RAC mix around 75% and this year we are targeting 65% some kind of share. And over the next four to five years, like what kind of like RSA mix we can expect and how we can deal only dependent on side? And if you can talk about what kind of customer approval time for these new additions and how the process takes and what kind of products or like we can expect after FY ’27?
Rajesh Kumar Mittal
So Mr Bala, like you already seen in the investor presentation, we are increasing capacity, we are increasing the number of facilities and we are also increasing our customer penetration. So the newer customers are largely for the small domestic appliances as well as some key customers for REC category are also in very advanced-stage of finalization and approvals.
So we are looking to add at least two to three new marquee customers, especially for REC. In terms of product categories, like we’ve already listed, we are looking to introduce newer products which are already state, the ones which will be introduced in FY ’26 and the others in pipeline for FY ’27.
So these again are looking at categories like air fries, which we already started, cooktops, new blenders, coffee makers, vacuum cleaners,, all these product categories are something which had been recently enabled by the implementation of the QCU, wherein we see all these products being localized from currently import.
So there is huge growth potential on this category and these definitely are also margin drivers, which deliver better margins as compared to the category.
Balasubramanian
Okay, Sir, on the DLDC motor side, earlier I spoke with one of the EMS players and also trying to set-up a facility for Like talk about sustained kind of margins and higher ROC and how we can look at for our business perspective.
Rajesh Kumar Mittal
So our VLDC motors is something which has — we have been working on it for last 2.5 years. So we took almost one and a half, two years to create the product, create our own IPs around it and get the product validated from most of the large clients. So now that all the motors are already validated, approved and we have also tested that we have done a good amount of field trials and we’ve also commenced our supplies in last six months-to almost all the customers.
So we are very confident in terms of our product acceptance in the market and its competitiveness in terms of both the domestic players as well as the imports. And this is why we have set-up this new greenfield facility and increasing capacities.
Balasubramanian
So how much capex for BLTC motors and what kind of asset assetan we can export?
Rajesh Kumar Mittal
So the overall capex is close to INR85 crore to INR90 crores, which has been done in. And turn, sir sorry. So this is a new Greenfield facility which will start production from Q2 of this year. So we definitely looking to commence supplies in this year get established and then next year is when we will start ramping-up our production further. So I don’t think I’ll be in a state to give a more clear picture in terms of assetance we Expect.
Balasubramanian
Okay, thank you.
Operator
Thank you. We take the next question from the line of Heman from Advisory. Please go-ahead.
Hemant
Hi, thanks for the follow-up, sir. What sort of margin guidance we are looking for FY ’26, sir?
Rajesh Kumar Mittal
Thank you so we’d like to maintain our EBITDA margins at 7.5 plus. So that is the kind of EBITDA margins guidance we’d like to give. Okay. And sir. Yeah, so steady while maintaining the overall.
Hemant
Okay, understood, sir. Sir, second question is like, do we see any RSE uptick towards the end of Q3 as we know that there will be new implementation B rating standard from January 1st.
Rajesh Kumar Mittal
So yes, the BE rating from January 1 is still under discussion, so it is not formalized and finalized. So that is as an industry, we’re still under wait-and-watch situation to understand if it is going to be implemented from January or deferred by another one year. So — but anyhow, the EPAC is ready with its product-line and portfolio for the updated BE ratings.
And we have already started offering them to almost all the customers and getting interested in.
Hemant
Okay, understood, sir. Thank you for answering my question.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. The next question comes from the line of Hiten Boricha from Sequent Investment. Please go-ahead.
Hiten Boricha
Yeah. Good morning and thank you for the opportunity, sir. Sir, as you mentioned, we have seen like slowish kind of demand in post Q1 and also our facility is coming up of the power in second-quarter this year. So my question is on the growth, what kind of growth rate we are looking for this year and as well as if you can comment something on FY ’27.
Rajesh Kumar Mittal
See, for the room AC category, the market is looking at a growth of anywhere between 15% to 20% is the kind of growth which the industry is talking about currently. And at EPEC, we are definitely looking to surpass the market growth and grow at a higher-rate compared to the overall market and the industry growth.
At the same time, our efforts here has been — what we’ve been highlighting is to grow far more in our other categories like SDA and components where we are looking at multiple growth and the large domestic appliances, especially washing machines, which will be introductory product for us in the coolers.
So all other categories we are looking to grow and for the AC growth, growth there the market is looking at anywhere between 15% to 20% kind of growth in FY ’26.
Hiten Boricha
Okay. So sir, is it okay to consider like, 30% 35% growth this year in terms of top-line?
Ajay DD Singhania
Yes, so in terms of top-line, at EPEC, we are definitely looking to grow overall by more than 55%. More than more than 35%. More than 35%. Okay, okay. Thank you. And sir, my next question is on the debt. As you mentioned, we are looking for an investment of INR400 or INR450, INR500 kind of investment in FY ’23.
Hiten Boricha
So how will the day — our debt shape up by end of this year? And also recently if you can give the cost of borrowing?
Rajesh Kumar Mittal
To give the perspective that as we mentioned that investment will be around INR400 crore around in the current financial year. And you know that we are already having IPO proceeds landing with the bank, which is more than INR200 crores. Out of this INR450 crore, we plan to utilize this total IPO proceeds,
Which is still unutilized and there might be some term-loan, which is around INR70 crore to INR80 crores and balance amount will be utilized through the internal accrual. As far as the cost of borrowings is concerned, tentatively the average cost is around 7.9% to 8%.
Hiten Boricha
This includes understood, understood. Thank you
Operator
Thank you. The next question comes from the line of Abhisar Jain from Monarch AIF. Please go-ahead.
Abhisar Jain
Yeah, hi, sir. Thanks for the opportunity. Sir, I just wanted to understand that in the washing machine category where we are entering, how has been the progress and have you received some key client approvals which you were looking at? So what do you expect as the ramp-up in this fiscal year for the washing machine category. If you can throw some light in terms of the progress that we’ll see in the coming quarters there?
Ajay DD Singhania
Yeah. So, for washing machine category, we understand we have been slightly delayed in getting the approvals, but now the trial production has already commenced for at least three key customers and also the field trials has been done and approvals have been received and we are now looking only to ramp-up from — to from the end of June is when we are looking to ramp-up production.
And so Q2 being the — of FY ’26 being the first month we will look at establishing and ramping-up production and then getting full-fledged from Q3 of FY ’26. So the capacities we have currently created is close to INR30,000 per month and we are looking to further increase our portfolio for washing machines.
And hence some investment is planned in washing machines out of this INR450 INR500 crores, which we are talking about. So we will ramp-up our portfolio in washing machines by the end of FY ’26 and have the complete range of products ready for FY ’27.
Abhisar Jain
Okay. So sir, initially we have the capacity of 30,000 per month and do you expect by Q2 or Q3 all the three of these customers to start or it would be gradual?
Rajesh Kumar Mittal
Yeah. So all the three customers, the field have already been done and the orders have been received for June onwards. So all three will start lifting up gradually and then increase the orders to us. So it will be a gradual increase, but we are very confident that from Q3 onwards, washing machine will ramp-up significantly.
Abhisar Jain
Okay, great to know that. Sir, second on the coolers also, we had, I believe, added a new customer there also in H2 FY ’25. And just wanted to know that how is the progress there? Of course, the weather has played us point sport in Q1, but for the full-year, how do you look at the air cooler ramp-up also for us?
Rajesh Kumar Mittal
Okay. So specially if we look at has grown significantly for us and the revenue contribution from in the complete financial year was to INR60 odd crores and we are definitely looking coolers to grow twofold levels this year. So because last year we — for the two new marquee customers which were added, we got only one and a half quarter to actually have a relationship with them.
Now that we are getting additional business and newer models are being aligned for the season of ’26 and ’27, we are definitely looking to double the revenue in.
Abhisar Jain
Understood, sir. Sir, second question is on the capex front. So just wanted to know this BLD — BLDC motor capex at the of that INR85 crore INR90 crores, how much of that has been already done, sir, by end of FY ’25?
Rajesh Kumar Mittal
So it’s almost mostly done. So out of this INR8590 crores, close to INR75 crores is something which is already committed and advanced them and machines are received and currently in installation. So it’s CBCWIP as of now and once the production starts, that will be capitalized.
Abhisar Jain
So we are doing that
Rajesh Kumar Mittal
Both land building as well as machinery.
Abhisar Jain
Okay. So sir, in that context, in the INR450 crores to INR500 crore forward capex that we have given, we have mentioned INR125 crores for the Bizardi unit. So is this incremental above this and 125 is for all these LCA, LD and other components in?
Rajesh Kumar Mittal
This INR125 crores is not for. This is for the greenfield facility we are starting a production — the construction of a greenfield facility in for which newer product categories, both for and LDA and SD, all the product categories are being planned. So this includes only the construction of a newer facility, which will be completed by end of FY ’26 and then newer product categories will be starting there.
So this is a completely new greenfield project, which has been setup in.
Abhisar Jain
Okay, okay. Understood. Perfect. And sir, last question on this INR450 crores to INR500 crore capex. So did you in the previous question sort of answer that most of the funding would be through internal accruals and debt or the would we also and look at other.
Ajay DD Singhania
So Abhi, sorry, the answer was we — of this INR450 crores, INR230 crores is the IPO proceeds, which will be utilized and INR100 crores is — will be utilized through debt new term-loan and almost INR150 crores is what will be done through term-loan growth.
Abhisar Jain
Understood, sir. Thank you so much, sir and best of luck.
Ajay DD Singhania
Thank you.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question , please press star and one. The next question comes from the line of Ashish Rathi, an investor. Please go-ahead.
Ashish Rathi
Yeah. Hello, sir. Good morning. Am I audible, sir?
Rajesh Kumar Mittal
Yes. Yeah, yeah.
Ashish Rathi
Okay. Okay. So sir, the first question is like for — for this financial year, the EBITDA margins was 7.26%. So what is the guidance for next like two to three years for the guidance and what will be the reasons for that? Like what is — what can be the increase and what can be the decrease in the EBITDA margin.
Ajay DD Singhania
So Ashish, we already gave the statement. We are looking at almost 35% plus kind of revenue growth for FY ’26, while maintaining EBITDA at around 7.5% plus and maintaining the overall PAT levels. So this is the guidance for FY ’26. Overall, if we look at medium-term for next two to three years, we are looking at an EBITDA margin of around 8% plus-minus.
So that’s a medium-term kind of a guidance we have maintained in the last several quarter.
Ashish Rathi
Okay. Okay. Any scope for improvement in the EBITDA margin like in the terms of three to five years?
Ajay DD Singhania
So definitely, like I shared, we will improve it from current 7.25% to 7.5% and going-forward, 8% is the kind of EBITDA margins we are looking at. And then definitely in next three to four years, we should be — we definitely are working to improve it further and maybe get 8% plus.
Ashish Rathi
Okay, okay. And one further thing on this, like it has been mentioned in the investor presentation that new plant cost has been — has been the reason for decrease in the EBITDA margin. So that cost has been done with that or there may be further hit on EBITDA margin due to the new plant.
Ajay DD Singhania
So the new plant has impacted slightly the overall EBITDA margins for the last financial year FY ’25. And as we are ramping-up the production and introducing the other categories like the SPAs and the LDAs in, we are looking to improve the overall capacity at 3 City. So next two to 3/4, we believe that we’ll be able to reach an optimal level of utilization at city.
Ashish Rathi
Okay, fine. So the next question is like what will be the asset turnover ratio for the new investment? If considering like capacity utilization at the level of like maybe 75%, so what will be the asset turnover ratio for the new asset, our net asset turn has improved from 2.6% in FY ’24 to almost 3.2% in FY ’26.
Ajay DD Singhania
So it has improved almost 25% in FY ’26. And this year again, we are looking to further improve it. And our objective is to achieve an asset turn of at least four for FY ’27. And going-forward as we invest more, we will be looking to further improve the overall asset turn.
Ashish Rathi
Okay, fine. So one last question. What are the major targets for this financial year in terms of like-new customers, new product, new geographical location, any new targets or we’ve already shared it in our investor deck.
Ajay DD Singhania
So we are looking to increase plant from 4 to 6 in the current financial year, increase customers from 55 to 70 again in this financial year and also increase product categories and reduce newer product categories as well.
Ashish Rathi
Okay. Okay, fine, sir. Thank you, sir. Thank you so much.
Ajay DD Singhania
Thank you.
Operator
Thank you. Thank you. We take the next question from the line of Sharma, an investor. Please go-ahead.
Unidentified Participant
Sir, am I audible?
Ajay DD Singhania
Yes.
Unidentified Participant
Congratulations for a good set of numbers, sir. So my first question is like while I was going to the investor presentation, I was saying there are three capex in the three cities. One is the new 3 city plant between EMCL, which is INR100 crores, which we just talked about which is parts of manufacturing of and components.
And the second — second one was EVLs basically, which is INR260 crores. What is that sir?
Ajay DD Singhania
In terms of investment, we have given four areas of investment. One is the current EPEC facility in where there is small investment of INR20 crores to fine-tune some of the capacities. Then there is INR125 crores investment in, which includes almost INR50 plus crores of investment in a new greenfield facility for which this includes only the construction.
And then INR350 crore INR225 crores is to ramp-up capacities at the new 3 facility for washing machines as well as other component business. And this new 3CT plant through wholly-owned subsidiary is what we generally call the facility.
Unidentified Participant
So that INR225 crores is to ramp-up the current electric facilities, right?
Ajay DD Singhania
Not just EC, this includes largely washing machine and also a lot of component business, both EMS business and component business. That is the OEM subsidiary, EMTPL, so that’s the OEM subsidiary, which means high sales product.
Unidentified Participant
I understand, I understand that. My second question is I talk cash-flow has been down year-on-year or significantly because of our inventories and all this thing, right. So what do you say for the next year? Like how do you — since the next year will go for it in terms?
Ajay DD Singhania
Inventory. Inventory, working capital that you are talking about. This working capital this in this particular year, actually you see from 45 to 57, it has increased by around 12 days and it was mainly because of the accounts payable days, which has gone down, we have made some payment to the vendor and otherwise NC — has increased to some extent.
Rajesh Kumar Mittal
But we assured that, okay, that in the current quarter and coming for the next financial year, we will improve it further. So trajectory especially in terms of inventories and payment terms. So there are two significant impacts which the industry has faced in FY ’25. One being the QCU for copper and like everybody was talking about the compression ability.
Ajay DD Singhania
So on both the fronts because of the supply-chain disruptions, we were forced to carry additional inventories to meet the peak season demand and all those decisions also led to accumulating some inventories, mismatching — mismatching inventories during the ongoing season.
So that definitely impacted the overall inventory levels at TPEC and generally throughout the industry. At the same time, because we were also — again, the Q2 has led to increase in domestic buying. So when it comes to imports, we enjoy LC 120 days, 150 days. So the payment terms are really good to support good credit period.
But with domestic buyers and lot of them being MSMAs that in the short-term has impacted the overall payable days.
Unidentified Participant
And my final question is, what is our gross loss now and what is the gross loss here on my next year because of the INR450 crore for capex we are doing, right? So what is the gross loss now and what is the gross loss and net loss for the next year.
Rajesh Kumar Mittal
So the gross loss for FY ’24. FY ’25 are tending the gross of INR850 crores and for FY ’23, going-forward, we are looking the gross anywhere between 1050. Yeah. That will be by the end-of-quarter four of FY ’26.
Unidentified Participant
Okay. Thank you, sir. All the very best. Thank you.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. As there are no further questions, I now hand the conference over to Kar Nayer from DAM Capital Advisors for closing comments.
Bhoomika Nair
Yeah, I would like to thank all the participants for being on the call and particularly the management for giving us an opportunity to host you. Thank you very much, sir, and wish you all the very best. Any closing remarks from your end?
Rajesh Kumar Mittal
Yeah. So thank you, Bhunika, Dun Capital and thank you all the participants for participating in the earnings con-call today. I hope you have been able to answer your questions satisfactory. If you have any further questions or would like to know more about the company, please reach-out to our IR managers at Valorem Advisors or send an email to the company’s — thank you so much.
Operator
Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines