Strong top line masked by profitability collapse; execution risk near-term

Delivered ₹886 Cr with 33.8% YoY growth exactly as reported

Prior year included ₹13.3 Cr non-recurring PLI with no cost; like-to-like underlying margin 6.4% vs. 6.21% now = 15 bps improvement, not 203 bps deterioration

PAT down 48.4% despite 34% revenue growth. Driven by ₹16-17 Cr depreciation (new capacity), ₹3-4 Cr added finance costs (working capital), ₹6-7 Cr forex loss

30% volume growth confirmed as anchor-customer driven; 14% value growth with quarterly price updates to customers as commodity headwind passed on

Q1 FY27 Hisense revenue ~₹65 Cr; Jan-June total ~₹120 Cr at 60k units — concrete and on track

Management states this confidence but does not cite source; appears consistent with recent industry commentary

34% YoY growth in Q1 aligns with target math, but depends on Q2-Q3 performing vs. historical losses

Prior guidance ~15%; current market conditions suggest 20%. Company expects to surpass this. Reflects strong AC demand tailwind post-BEE standard shift.

₹65 Cr Q1, ₹120 Cr Jan-June already ahead of pace. Front-load washing machine pilot on track for mass production by Oct 2026 (end Q2). ₹8,000 Cr over 5 years reaffirmed.

From <25% to ~50% Q1; targeting 55-60% for FY27. Non-AC business key lever for off-season ramp-up. Concrete improvement vs. prior calls.

7% normalized EBITDA still target; current 6.5% ex-PLI. Not raised despite strong growth. PLI loss in FY28 will require price or cost action to hold 7%.

Historically loss-making; management committed to SDA/LDA scale to neutralize. But no specific Q2 FY27 profitability guide given; likely still weak in near-term.

Priorities: scale growth engines (RAC margins, wash machine ramp); deepen strategic partnerships with key customers; rebuild margin as capacity absorbs volume. Risks: AC and SDA both have strong growth momentum; no demand weakness flagged; focus on price pass-through and capacity utilization.

30% volume growth (largely anchor customer) + 14% value growth (AOP increase and commodity pass-on). Quarterly price updates in contracts; most commodity increases already passed on. Forex loss not yet reflected in pricing (time lag).

AC inventory at best levels in years; channel liquidated old-rated stock by June end. Estimated 3.5-4 million units industry-wide (lowest acceptable). Forecast strong season ahead.

Working capital ~50-60 days seasonal; inventory buildup due to BIS/QCO regulatory changes (compressor PLI, copper QCO updates). Normalization efforts ongoing. No indication of debt concerns.

Q1 depreciation ~₹16-17 Cr; no significant capex or CWIP remaining, so no major uplift expected. Finance cost up ₹3-4 Cr due to 40% growth and working capital; opportunity to improve via inventory normalization.

Q1: ₹10 Cr capex, ₹40-45 Cr in CWIP. Total planned ₹450 Cr (announced FY26); ₹330-340 Cr already booked. Remaining ₹60-70 Cr for balance FY27.

No forward guidance on FY27 top-line. AC industry ~20% expected growth; company will surpass. SDA/LDA growing much faster. EBITDA: 6.5% ex-PLI normalized. 1.5-2% PLI benefit rolling back by year-end; next year 'normalized' EBITDA higher (implying margin recovery post-PLI cliff).

Government allows import till end CY26. Domestic capacity ramp-up significant; believe sufficient capacity online by Dec 2026 to meet industry demand. EPACK not setting up compressor capacity; relying on strategic tie-ups with suppliers.

[Not clearly answered due to audio issues; analyst did not persist]

SDA/LDA: ₹80 Cr last year → ₹130 Cr Q1 (68% growth). Top-load wash machine already in production with 3 large customers. Front-load (with Hisense) pilot production targets Oct 2026 mass production start. Q2-Q3 historically loss-making; over 4-6 quarters, washing machine scale should 'stop the bleeding'.

Cannot provide forward guidance, but acknowledge Q2-Q3 historically loss-making. Journey underway; 4-6 quarters to control bleeding. No directional confirmation for Q2 FY27.

Yes, largely on track. Seasonality impact minimized; focus is making every quarter profitable or revenue-maintainable mix. Order book robust; product categories and customer base expanding.

Q1 overall utilization: Dehradun/Bhiwadi >85%, Sri City ~50%. Target >60% average across 3 plants for FY27. Sri City doubling from <25% base; ramp-up improving fast; targeting 55-60% annual utilization.

Jan-June: 60k ACs, ₹120 Cr revenue (₹65 Cr Q1). Front-load washing machine on track Oct 2026. Growth envisioned and timelines adhered to; plans intact. Confidence that partnership will scale new heights in coming 2 years.

No forward booking without confirmed orders. Back-to-back booking for customer orders per agreements. Commodity increases/decreases passed on quarterly. No speculation; only hedge confirmed orders.

Forex loss ₹6-7 Cr; wage costs up due to 35%+ production value increase. No other material reasons.

Manufacturers mandated to produce new BEE-rated from Jan 1, 2026. All growth Q1 and prior quarter is new-rated. Channel allowed to sell old-rated till June 30; largely liquidated by then. Estimate old-rated flushed from inventory.

Festive season (Oct-Nov) typical; thousands of SKUs make single estimate difficult. In-house inventory ~70-75% AC, 25-30% non-AC. SDA/LDA gross margin 1.5-2 bps higher than AC. Expect much faster non-AC growth vs. AC.

Closed FY26: 72 customers, 18 product lines. Q1 added ~2 customers; 2-3 more in pipeline. Target by year-end: 75 customers, 20 product lines. Consistent expansion.

₹1,085 Cr capex commitment over 5 years starting Jan 2024. 35 acres allotted. State incentive: ~50% of capex refunded as investment subsidy over 10 years. Capacity ramp-up longer-term; not immediate.

Current EBITDA ex-PLI ~6.5%. PLI 1.5-2% benefit; 50-50 split with customers (1% to EPACK, 1% to customers). FY27 last year PLI; already rolling back customer discounts. By year-end expect full rollback; next year normalized EBITDA higher.

Hisense ₹8,000 Cr cumulative over 5 calendar years starting FY26-27 (first year). FY26-27 already tracking ₹120 Cr (Jan-June). Five-year cumulative across AC, washing machine, appliances. ₹5,000 Cr company target remains 2-3 year horizon from prior guidance.

Industry AC expected ~20% (vs. prior 15%); company outperforming. SDA/LDA at faster pace. No specific FY27 full-year number given; Q1 was 34% growth.

Requires 35%+ CAGR; Q1 at 34% on track. But depends on Q2-Q3 seasonal weakness not derailing overall growth trajectory

FY26-27 (first year) tracking ~₹120 Cr; Q1 alone ₹65 Cr. On track. Washing machine ramp Oct 2026 on schedule

PLI cliff FY28 (FY27 last year). Company rolling back customer discounts by year-end to recover 1% to EBITDA. Without price increases or cost cuts post-PLI, 7% target at risk

Core to diversification strategy. Washing machine and higher-mix non-AC should improve blended margins once capex depreciation cycles

Q1: ₹10 Cr capex, ₹40-45 Cr in CWIP. Remaining ₹60-70 Cr for balance FY27. No major surprises flagged

Q1 PAT ₹11.8 Cr despite 34% revenue growth. Historical Q2-Q3 are loss-making due to AC seasonality. Management timeline 4-6 quarters to normalize via SDA/LDA ramp is long and uncertain.

FY27 is last year PLI eligible. 1.5-2% PLI benefit; 50% passed to customers. Rolling back customer discounts by year-end; but post-FY27, no PLI means 1% margin headwind vs. base case.

30% of RAC volume growth (+44% YoY) driven by single 'anchor customer'. Likely Hisense or major OEM. Creates concentration risk despite claimed 72-customer base diversification.

₹6-7 Cr forex loss Q1 impacted margins. Copper prices rising; company passes through quarterly but time lag exists. Working capital tied up in inventory due to commodity import dependence.

BIS QCO (Quality Control Order) and compressor availability subject to regulatory change. March 2027 QCO expiry could disrupt supply if domestic capacity ramp-up delays. Regulatory changes in Jan 2026 (BEE rating) forced safety inventory build-up.