EPack Prefab Technologies Ltd Q3 FY26 Earnings Analysis

- EPACK expects to sustain robust growth driven by a strong order book of around Rs. 920 crores, providing revenue visibility for the next 7-8 months. - The company targets volume utilization of ~80% of 1,70,000 tons capacity for structural steel fabrication in the current financial year. - New facilities and expansions, such as the brownfield expansion in Mambattu and greenfield insulated sandwich panel line in Rajasthan, will boost production capacity and sales. - Management aims to maintain revenue growth of 30%-35% CAGR over FY'26 and FY'27. - Order bookings are typically heavier in H2 with Q3 and Q4 being strong quarters; first half accounts for ~45%-47% of annual revenue. - Revenue growth is supported by sectors like solar, semiconductor, FMCG, warehousing, and auto. - Prefab market potential is large as it currently represents only 3%-5% of the building construction market, promising long-term growth. - Overall, the company is confident in continuing to outperform industry growth and sustain volume and revenue expansion.

- Margin expansion expected due to debt reduction: repayment of INR 70 crores loan at 8.25% interest will improve PBT by approx. 0.4% and PAT by 0.3%. (Page 23) - EBITDA margin guidance: expected to sustain in the 10.5% to 11.5% range going forward. (Page 15) - Revenue growth outlook: confident of continuing robust growth and outperformance of industry over next 18-24 months; significant order book provides visibility for next 7 months. (Pages 10, 5) - Asset turnover and CAPEX: Brownfield expansion (INR 58 crores) expected to generate INR 300+ crores revenue; Greenfield (INR 102 crores) to add approx. INR 250 crores revenue; current ROE/ROCE ~23-25%. (Page 5) - Working capital and cash flows: Expect healthy cash flows and manageable working capital cycle (~35 days), aiding profitability. (Pages 16, 12) - Overall, EPS and operating profits expected to benefit from margin expansion, growth in orders, and improved financial management.

- Rs. 58 crore Brownfield expansion for structural steel fabrication at Mambattu, Andhra Pradesh. Work started recently; commercial production expected from Q4 FY'26. - Rs. 102 crore Greenfield expansion for insulated sandwich panel line at Ghiloth, Rajasthan. Construction ongoing, equipment ordering in progress; commercial production targeted from Q2 FY'27. - No additional land holdings apart from the one mentioned in the prospectus. - Continuous de-bottlenecking exercises to improve capacity efficiency by 5-10%. - Evaluating export opportunities leveraging proximity to ports, especially for Middle East and Africa markets. - CAPEX aimed at supporting growth; expected revenue from expansions: Rs. 300+ crore from Brownfield and around Rs. 250 crore from Greenfield panel line. - Maintaining asset turnover of 4.5-4.7x with ROE/ROCE target around 23-25%. - Future focus on developing value-added solutions around sandwich panels (e.g., clean room and cold room segments).

- The company has recently utilized IPO proceeds to reduce debt by around INR 70 crore, cutting short-term borrowings significantly. - Currently, term loans stand at about INR 50 crore, and Working Capital Demand Loans (WCDL) around INR 60 crore, which can fluctuate with business needs. - No explicit plans for new equity fundraising are mentioned; share issue expenses from the IPO have been adjusted against security premium. - CAPEX plans include INR 58 crore for Brownfield expansion and INR 102 crore for a Greenfield insulated sandwich panel facility, funded through internal accruals and IPO proceeds. - No additional landholdings or major funding are noted beyond current plans. - Interest costs are expected to remain low (1%-1.5%), with interest income from fixed deposits offsetting costs. - While the company is expanding capacity, any increase in short-term borrowings will be aligned with business needs; no explicit new debt fundraising announced.

- Current order book stands at around Rs. 920 crores, providing revenue visibility for the next 7-8 months. - In the first half of the year, the company booked orders worth approximately Rs. 650 crores across sectors like solar, semiconductor, FMCG, warehousing, and auto. - H2 typically sees heavier order bookings, especially in Q3 and Q4 due to client CAPEX cycles. - Conversion ratio for inquiries is around 15%, with better hit rates on larger inquiries. - Pipeline is robust with several large inquiries and expected order closures, indicating positive outlook for order book growth. - The company expects continued strong momentum fueled by marquee customers and a growing pipeline, supporting growth over the next 18-24 months.