Epack Prefab Technologies Ltd (EPACKPEB) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (DAM Capital Advisors Limited): Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '27 earnings conference call of EPACK Prefab Technologies hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity
Moderator (DAM Capital Advisors Limited): for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now hand the conference over to Mr. Aseem Bhardwaj from DAM Capital Advisors. Thank you, and over to you, sir.
Aseem Bhardwaj (DAM Capital Advisors): Thank you, and good evening to everyone who has joined this call today. So from the management side from EPACK Prefab Technologies management, we have Mr. Sanjay Singhania, Managing Director and CEO, Mr. Nikhil Bothra, Executive Director, and Mr. Rahul Agarwal, CFO on the call. So we'll begin the call with Mr. Singhania for his initial thoughts and post that we can open the floor for questions. Thank you, and over to you, sir.
Sanjay Singhania (EPACK Prefab Technologies): investor call. So let me start with the full picture first. The revenue of the company for H1 grew by 19% to 867 crores, and quarter two was our biggest quarter ever at 501 crores revenue. But that growth did not flow through two things. One is the profit and the second is the cash flows. And I will tell you why. The profit grew by 2%, but operating cash flow was negative. So, two things happened here. First is, the steel and other input costs rose faster than we could pass them through on orders already being executed. So, our gross margin fell by almost 2.3% and during our first investor call of this financial year, I had already, you know, spoken about the impact of steel price increase on our earnings. The second was the working capital went up by 60 went up to almost 60 days. Our guidance has always been around 40 to 45 days would be the working capital, so there is a slippage of almost 15 to 18 days there. So there are two reasons for this. First is, over the last 6 months, we have executed large industrial and renewable projects on milestone-based billing, and every one of those receivables is backed by Letter of Credit. So the money is secured and the question is only about timing. So in this you know, the LC process is linked to the milestone billing and there being delays in that. So due to that, the receivables went up by almost 144 crores. But the good thing is, since they are backed by LC, so we expect this to normalize in this quarter three. We also the second part was you know, we built the inventory of the steel deliberately and that resulted in a working capital increase of almost 92 crores for us. So while that results in the increase of working capital, but that also protects us against further price increase and secures our steel availability for the entire quarter. So as a result of this, we expect our margins in the current quarter to be better than what we have delivered in the entire H1. Now I will tell you few things, you know, what we are doing here. So every new order is now priced on current input cost, and we have long-term sourcing arrangements in place. We are also pushing for price escalation clauses with our large customers. Yes, some of the customers have agreed, but it has hasn't become a standard practice yet, so I won't claim it. Collections are the single best biggest priority for us in the H2, and I will be personally reporting working capital to you every quarter till we normalize it. Dear investors, what gives me a lot of confidence in our business is demand and capacity. Order inflow in H1 grew by almost 71% to 1,124 crores. During our first call in this financial year, I had you know like said that our target was to do order booking of 2,000 crores in this financial year. So in the H1 itself, we have done 1,124 crore rupees of order booking, and this is the testimony of the execution which we have done over the past 3-4 years and also
Sanjay Singhania (EPACK Prefab Technologies): of the strength of our team and our brand. And our order book today stands at 1,462 crores, which gives us a clear visibility of revenue over the next eight to nine months. Also on 30th of October, about three, four, last week only, we have added 13,000 tons of steel capacity, processing capacity at our Ghiloth greenfield project, that is Unit 5. And we also commissioned our sandwich panel line in Ghiloth, Rajasthan, which will cater to the sandwich panel business for the Northern market. One of the important developments that the company is also doing is the greenfield project in Gujarat, which will strengthen our presence in the West. And as conveyed earlier, we plan to get this a new plant in Gujarat commissioned in the fourth quarter of the current financial year. On guidance, we are maintaining our FY '27 outlook of ₹1,900 crore of revenue with a 10% to 10.5% EBITDA margin. Our Q2 margin already recovered to 10.1% from 9.4% in quarter one. And H2 will see more of our orders priced at current input price, as well as the inventory build-up has given us a lot of confidence that we would be able to improve upon our gross margin in this quarter and the quarter next to this. We remain cash net cash positive. ICRA has reconfirmed our A+ rating. And we will continue to deploy our IPO proceeds with discipline. H1 has shown that the demand is real, and H2 is all about showing you that we can convert it into margin and cash. So with that, I'm happy to take your questions. Thank you.
Moderator (DAM Capital Advisors Limited): Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Rohit Taparia, an individual investor. Please go ahead.
Rohit Taparia: Hello, first of all, thank you for taking my question, and congratulations, sir, on a great set of numbers. My question is basically on the guidance side. For FY '27, you have mentioned ₹1,900 to ₹1,950 crores with an EBITDA margin of approximately 10% to 10.5%. What is the long-term guidance sir for FY '28 and FY '29 if the company can give any?
Sanjay Singhania (EPACK Prefab Technologies): Yeah, thank you, Rohit, for the question. Yes, we are guiding the market to ₹1,900 crores plus revenue for the current financial year with an EBITDA margin of 10 to 10.5%. And going forward also, like you know we are doing this year, we are growing at 25% to 30% CAGR, and going forward also that will be our endeavor to grow at 25% to 30%. The reason being the market, the demand cycle is supporting us at this time. So I'm very much sure, you know, we have the capacities and the and and the team to deliver a growth of 25% plus year-on-year for the next couple of years.
Rohit Taparia: Okay, sir. Next couple of years, I mean, say for the next two to three years.
Sanjay Singhania (EPACK Prefab Technologies): Yeah. As I say for the next couple of years, yes, will grow at 25% plus.
Rohit Taparia: Okay, sir. And currently, what what company is having what will be the peak revenue potential for the company at the current capacity?
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