IFBIND - IFB Industries Limited Share Price

For the financial year ended March 31, 2025, IFB Industries reported a revenue of Rs. 4,977 crores, an increase of 14% from Rs. 4,344 crores in the previous year. The company achieved a PBDIT of Rs. 325 crores, marking a 35% growth, and the PBT reached Rs. 171 crores, a 90% increase year-on-year. The PAT stood at Rs. 129 crores, up 87% from Rs. 69 crores in FY '24.

Management's outlook emphasizes a target of achieving double-digit EBITDA margins, with significant cost reduction initiatives expected to yield at least Rs. 200 crores in cost savings, while internal expectations may exceed Rs. 300 crores. For FY '26, it is anticipated that around Rs. 70-80 crores of these savings will flow into the P&L.

In the AC segment, the company has reached a run rate of about Rs. 900 crores and aims for robust growth, potentially targeting Rs. 1,200 to Rs. 1,500 crores in the next few years. For FY '25, sales volumes totaled approximately 4 lakh AC units (3,42,000 under the IFB brand and 61,000 OEM).

In the refrigeration segment, the company expects to ramp up volumes to 7.3 lakh units for the year, supported by recent growth trends of over 35,000 units per month, hinting confidence in meeting targets. Management is optimistic that the engineering division will see growth catalyzed by greenfield projects and improved marketing strategies, aiming for 20% annual growth.

Overall, the management expressed a commitment to strengthen market position across product categories through improved distribution, enhanced marketing efforts, and product line expansions.

Q1: How are you looking at the washing machine business given its weaker performance compared to RAC? A1: The industry for front loaders has been stagnant. We've gained around 1.5% to 2% market share, but overall, there's been a degrowth in the up to 10 kg segment. There's a trend toward higher-end machines, but the lower weight classes are struggling.

Q2: Do you plan to enter the semi-automatic market, given the opportunity in top-loaders? A2: We don't intend to enter the semi-automatic segment. However, after launching a new top-loader series, our sales grew 27% in Q4, outpacing the industry's 15% growth, and we continue to see substantial opportunities in these categories.

Q3: What about the gross margins for washing machines going forward? A3: Despite pricing challenges, our gross margins remain stable. We're expecting Rs. 60 to Rs. 80 crores in material cost reductions in FY '26, with several initiatives underway to increase gross profit through higher sales volumes and selective price increases.

Q4: What kind of growth do you foresee in the AC business and volume for the full year? A4: In Q4, we sold 1,30,000 AC units under the IFB brand, achieving a 52% growth. For the year, we reached 4 lakh units, aligning with our targets. We're confident in achieving robust growth moving forward.

Q5: What is your target for the refrigerator segment? A5: We've increased our run rate expectation to 7.3 lakh units, translating to about 50,000-60,000 units per month. We believe this is achievable despite historical constraints, and our improved months indicate a positive trend.

Q6: Could you clarify the Rs. 200 crores cost reduction and its timeline? A6: We're aiming for a minimum of Rs. 200 crores in material cost savings, with expectations that it could exceed that. Certain changes will take time for validation, hence they will be gradual up to Q4 FY '26.

Q7: What sort of margin improvements do you expect moving forward? A7: We strive for double-digit EBITDA margins. Current cost-saving initiatives may help achieve this in FY '26, but we cannot provide specific targets beyond that at this time.

Q8: Can you provide insight into the CAPEX guidance for FY '26? A8: Our CAPEX guidance is approximately Rs. 100 to Rs. 130 crores for appliances and around Rs. 45 crores for engineering, primarily focused on washing machines and new projects like chain manufacturing.

Q9: How is the AC segment performing in terms of profitability for FY '25? A9: The AC segment has transitioned from losses to being EBITDA positive. We expect improvements in FY '26 as we focus on enhancing profitability and product offerings.

Q10: What strategies are in place to strengthen your retail presence? A10: We currently have around 487-500 stores, aiming to expand to over 700 within the fiscal year. Customer experience is enhanced in these retail outlets, which contributes positively to sales.

Q11: What is your outlook for EBITDA margins in the AC segment? A11: We anticipate EBITDA margins for AC to exceed 5% and aim for significant enhancements as operational efficiencies are rolled out and product mix improves.