Q3 25/26

Feb 4, 2026

Summary

Q3 revenue rose 12% YoY, but EBITDA declined as FX, commodity and promotional costs absorbed savings. Management is targeting >20% appliance growth and margin recovery through cost, channel and execution initiatives.

Ladies and gentlemen, good day and welcome to IFB Industries Limited Q3 FY 2026 earnings conference call hosted by Nirmal Bang Equities. As a reminder, all participant lines will be 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 this conference call, please signal an operator by pressing * then 0 on your touch tone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Ms. Arshia Khosla from Nirmal Bang Equities. Thank you, and over to you, ma'am. Thank you, Bhumi. I, Arshia Khosla, on behalf of Nirmal Bang Institutional Equities, welcome you all to the third quarter FY 2026 earnings call of IFB Industries Limited. From the management today we have Mr. Bikramjit Nag, Chairman; Mr. P.H. Narayanan, MD, Engineering Division; Mr. C.S. Govindaraj, ED Manufacturing; Mr. Soumitra Goswami, CFO; Mr. Jayanta Chanda, CFO Engineering; Mr. Kartik, Head Finance and Accounts; and Mr. Ranjan Mohan, National Sales Head, Home Appliances. I would now request the management to give their opening remarks, post which we shall open the floor for Q&A. Thank you, and over to you, sir. Good afternoon, everybody. I am Soumitra Goswami, the Chief Financial Officer of IFB Industries Limited. I welcome you all for IFB Industries Limited investors' call for third quarter financial year FY 2025, 2026. Now I will be informing you about the quarter together. Revenue for the quarter was INR 1,382 crores against last year INR 1,232 crores, which is a growth of 12%. EBITDA for the period was INR 80.9 crores and its percentage to revenue was 5.8% as compared to last year INR 89.6 crores, which was 7.3% on revenue. There is a decline in EBITDA amount by INR 8.7 crores, which is a degrowth over last year by 9.8%. Fixed expenditure for the quarter were well behind budget. However, in case of some expenditure rates, expenditure increased over last year. PBT for the period is INR 45.3 crores, which is 3.3% on revenue against last year's figure of INR 44.9 crores. In this quarter, an incremental liability of INR 13.38 crores has been recognized as an exceptional item. This is in line with Labour Codes notified by the Government of India on 21st of November 2025. This charge reduced the PBT amount to reach INR 31.9 crores against last year's INR 44.9 crores. Q3 PAT was INR 24.51 crores, which is 1.8% on revenue against last year INR 34.436 crores, which is 2.8% on revenue. YTD December figures are like this. Revenue for that period was INR 4,020 crores against last year's INR 3,666 crores, which is a growth of 10%. EBITDA for that period was INR 253.35 crores and its percentage to revenue is 6.3% as compared to last year INR 255.22 crores, which was 6.9% on revenue. Fixed expenditures of the quarter were well within budget. However, in case of some expenditure like service expenditure, theater cost, office expenditure increased over last year. PBT before exceptional item for the period was INR 147.52 crores, which is 3.7% on revenue against last year's INR 141.92 crores, which is 3.9% on revenue. PBT after exceptional item for that period was INR 134.14 crores, which is 3.3% on revenue against last year's INR 141.92 crores. Tax for a nine-month period was INR 99.62 crores, which is 2.5% on revenue against last year INR 106.50 crores, which is 2.9% on revenue. With this, I will be requesting to start the question and answer session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Lakshmi K G. From Tunga Investments. Please go ahead. With respect to the appliances division, it was mentioned that there was a cost benefit that actually had to come in. But if I actually look at it on a nine-month basis, that doesn't show up in terms of your year-on-year growth in EBITDA or even PBT. Can you just explain if the cost benefit has come, where exactly it has actually gone? Yeah, Kartik here from Appliance division. The cost innovation what has come in A&M on a YTD basis was ₹35 crores. But what has happened is during the same period, Forex agencies depreciated by around 6%. The impact of that on material cost was ₹29 crores negative. Also, the commodity, mainly copper and GP has increased. So this negative impact was another ₹18 crores. So this negative impact in commodity and Forex has eaten into the cost innovation. Is there a way in which we normally do some hedging or even because I thought we would hedge it prudently. Why would this Forex loss even happen? Yeah. We have a hedging policy where we hedge 100% of the Forex exposure against the underlying. Okay? But this Forex negative is with respect to last year. Last year, dollar was around 86, and this year our average buy is a dollar around 89. So that 6% negative impact is increasing the material cost. In other words, this INR 18 crores would have it is an exceptional item for Q3. Is that a way to think? Sorry, can you please repeat the question? No. You talked about INR 18 crores of Forex and the copper-related stuff, right? So that is only in Q3 it happened, or it is actually nine months it spills over two quarters or three quarters? Yeah. I will again repeat. This impact was for the year YTD. Again, I will repeat, INR 29 crores is the impact of Forex, and INR 18 crores is the impact of commodity. So Forex is still at an elevated level. If you see, dollar is still around 90, and commodity like copper has breached 12,000. Yes. So this impact will We cannot predict the currency and commodity. But as of now, this impact is Sir, if that is the case, do you think this will continue for how many quarters this issue will be there? Hello? Sorry, can you please repeat this? Sir, my question is that, for how many more quarters, whether this will continue in Q4 or if this will also continue in Q1 of next year, how are you thinking about it? As of now, commodity is at this level. No, my question is that, for the full year, you have any kind of a number in mind in terms of what will be this impact of Forex and the other one you talked about, right? You said 28 plus 19 crores. For the full year, how much do you think it could be, or whether it could actually put set right after the Q4? Yeah. We will not be able to give a forward statement in terms of what will be the impact for next quarter as far as dollar and currency will be there. No. My question is slightly different, sir. Whether this is actually behind us or this will continue. I mean, I am not asking for quantification also, but do you think this will continue or- If you look at January, the rupee, except the last 2 days, it has again appreciated. But rupee was still around 90, and copper was in excess of 12,000 LME. So there was not much change in January with respect to quarter 3. Fair enough. So the cost benefit which you actually mentioned, which Anand raised in March, that will continue, that is on track and that will happen in Q3 and Q4. In addition to it, there are some other costs, right? Some variable cost reduction was also there. Can you just explain how much it is and when you would actually start getting the benefits of that? Also last call you had mentioned that there is a McKinsey project that is going on in terms of improving our e-commerce channel. Can you just let me know what is the total outlay of cost you have given for that particular project, and what will be the total benefit you will get from that initiative also? Yeah. As far as the material cost project with A&M is concerned. In the first quarter we had got INR 4 crore, second quarter INR 12 crore, third quarter INR 19 crore. Sir, we are expecting INR 44 crore. We are expecting to close the year with a material cost reduction of INR 79 crore. As far as A&M's project is concerned, in quarter 4 we have got the expected increase in e-commerce sale what we had projected, though we will not be in a position to give the numbers. Sorry. As far as is concerned, the growth in e-commerce project is in line with what we had expected. What is the cost outlay for that McKinsey project you have? What is the number you would like to spend on that project? Sorry, we will not be able to disclose the commercial terms with McKinsey. Another question is related to the gross margins of Appliance division. While you actually did a DDIP, can you just elaborate what have been the gross margins of this particular thing, 9 months at a percentage term with respect to 9 months of last year? No, sorry, sir. We don't give gross margin indication. I'm just saying not the indication, but what are actually the sales? No, sir. We don't give the gross margins. Sir, that will help us to understand what kind of material benefit it has come, because all the things that are taken comes after that. Right? That's the reason of asking this question. It will be helpful maybe for the benefit of all the investors you can give this information, if it is appropriate. Sir, another question is that what is the number of units of washing machine you have sold and what is the market share in front load, top load and in air conditioners? Can you just give the market share numbers? Yeah. And units. This is Ranjan. The market share in terms of front load addressable market share is touching around 25% plus, and in top loader it was 9.6% or 10%. With respect to the last year, how was it? Have you increased market share? Have you- In front loader, there has been a-- I will not say substantial, but there has been a good increase in market share and in front load, it is almost at par, a slight increase. In terms of number of units, can you just give the number of units made in FY 2029? Sorry, we do not give the numbers. I have shared the share with you. Sir, do you have enough capacity on both washing machines, front load and top load, going forward as the growth comes in? Do we have enough capacity or how much more is available for us? Hello. Yeah, I can answer this. This is Govindaraj here. As far as capacity for front loader is concerned, we have got capacity about 85,000-90,000 and we have used about 88%. So still we have got enough capacity to meet the market needs. Similarly, in top loader we have got a capacity of about 65,000. There also we are operating at around 90% in the peak months. So we have got enough capacity, and we have already started working on how to increase the capacity. Can you just give the market share and this number for AC also? Market share as well as capacity utilization in AC. As far as AC capacity utilization is concerned, in the peak months we are touching about 80%-85%. As far as market share, Ranjan, can you please answer? Yeah, please. Although there has been a growth in AC volumes, our share is right now very low, which is around 3%-3.5%. Okay. Okay, sir. Thank you. I will come back with you. Thank you. Our next question is from the line of Shreyansh Jain from Swan Investments. Please go ahead. Hello. Hello, can you hear me? Yes, please go ahead with your question. Sir, my first question is how are you looking at the whole washing machine growth rates for us? Because last few quarters had been weak and we were hopeful of gaining market share and obviously top load as a category was something that we had just recently, not recently, but we had entered quite late. And that category we were given to understand that for us will be a high growth category. So in that sense, how do you look at 5% growth rate in top load? And our channel check also suggests that you would have lost some market share in the offline market, at least on the front load washing machines. So what are your comments on first two- Yeah. First of all, I do not know from where you got this information that the growth is 5%. The growth is much more. I shared just now the kind of market share gain. It is given in your invest presentation, sir. No, that is if you are talking about the quarter. We are talking about the YTD. I was talking about the YTD growth. I am just talking about the quarter specific. Quarter overall, the industry was a bit sluggish. We have been able to maintain our share. Rather, a slight improvement in some decimals was there in top loader also. But on YTD basis there has been an increase both in terms of growth as well as in terms of share also. Okay. Sir, when you look at some of the other players who had entered the market much later than us, they have reached about 10% market share in washing machines. Just in light of that- You are talking about top loaders? Washing machines, sir, as a category. Overall washing machines. First of all, we are into fully automatic machines. In top loader, the growth rate is far ahead of the industry growth rate and is far ahead of any player in the industry. That is for the top loader I have answered. In terms of front loaders, I said that we have been able to maintain the market share. It has not increased substantially, but we have been able to retain our position. As per our understanding, you are saying the market would have grown below 5% because you- Yeah you are saying you have outgrown the market. In top loaders, yes. Okay. Sir, my second question is, what portion of our COGS is imported? Because the impact of Forex seems to be really high. Can you help us with that? How much do we procure from out of India? Yeah, Kartik here. Product to product, it differs. It is between 20%-30%. 20%-30% of my overall COGS, is it? Yes. How much of this would relate to home appliances? Yeah. I am answering for home appliances. Okay. For overall as a company, how much do you import? Hello? Hello? Hello. Can you hear me? Yes. Hello. Can you hear me? Yes, sir. At the company level, our import content is almost the same as whatever Kartik has told because home appliance division is catering to 80% of our company revenue. So naturally, whatever import percentage we are having at the company level, the percentage is almost same. It is around 20%-30% only. Okay. Sir, my next question is, when I look at your investor presentation, our channel schemes and discounts, they have gone up by 100 basis points. From 25% of gross sales, it has gone to 26 odd percent. Can you help us understand where will this number settle at or because the ACs and ref is slightly newer category for us, so this will keep on increasing. Can you help us there? Yeah. During the quarter we had given higher promotion scheme for customers like cashback, free IFB Essentials kit. This has increased the cost of scheme. Okay. But the last few quarters we were talking about rationalizing the spends that we've been doing consistently. We had also mentioned that we will see something on the A&P front, at least on the ATL side. But I think those two things are not actually materialized. Where are we, sir? We have started the process. We have put in a full-time team working on this. We expect the gains to come in subsequent quarters. We have set a tie up with all the channel partners, where the payout will be linked to volumes. The benefits of this will come in Q4 and starting from Q1 of next year. Okay. And sir, last question is the 44 crores of cost savings that you are talking about. Can you explain to us where, which line item, is this gross profit or is this below that? Also, we were looking at 15-20 crores of cost savings on the logistics front. So has that also come through in this quarter or not yet? To answer your first question, INR 44 crore is the reduction what we are expecting in material cost. So it will be a part of gross. Okay. Logistic cost, we have started the activity, but the full impact of that is yet to come. Okay, sir. Thank you. All the best. I will get back in the queue. Thank you. Our next question comes from the line of Vinod Krishna from Avendus Wealth. Please go ahead. Thank. Sir, are you able to hear me? Am I audible? Yes, please go ahead. Yes, please. Sir, my question is on your ability to pass on the cost. I understand there is an import component and also commodity prices. So how many quarters lag normally you get to pass on, or it is a function of competition and item to item, or you can pass on because we have good market share in microwave and washing machines. Or by Q4, have you already passed on at least some part of the cost to the customers? Yeah. We have planned that. This will be a judicious call based on the market scenario. We have already planned something for the Q4. Because this is a continuous thing, right? Rupee is depreciating around 3%-4% every year. So we have in the business model that we pass on the cost, I assume. Yeah. Sir, second question, sir, is on the how do you look at competition, sir? Is it like there is enough room for many players or even though there are few players, it is very intensive? Because Bikram sir has been guiding around, he is been saying we should grow minimum 20% on home appliances. So when do we think we will get to a stage in terms of we have done our distribution, we have channel extraction. When do you think we will get into that flywheel of 20% growth in home appliances? Because that is what is your organization target, is what has been communicated in all the con calls. Last time also, there were some changes which we have brought in terms of manning, et cetera. Plus, we are also working on improving our productivity through our counter sales representatives. So we expect that from quarter four onwards, there will be a good change which will be visible. Sir, normally if you can give qualitative comments on how do you look at competition? Is there enough room? Because when we go to channels and see, we just see too many players. But from your angle, maybe there is room for all of you. In the categories we are in, we feel we have got enough room to grow and to consolidate our position. Yes. Sir, this is not a question, sir, this is a suggestion. If you can conduct con call immediately after the result, because there are two days, nobody knows what has happened, because sometimes I understand we are human beings, and there is a huge difference between guidance and what is happening. We do not know, and price just, if people just react and we have to wait for two, three, four days. Or else, whenever you can conduct con call on that day, if you can release the results, whatever, if you can match it, then there is not a big, huge time gap. It will be easier, sir. We will keep your suggestion in mind. Yes, sir. Sir, last question. We can take that we are going, in terms of distribution, channel extraction, and all the cost benefits, and also the branding that you are planning, we can say in the next 2-3 years, we should deliver home appliances growth of 20%? We can say that given that now we have I think you are saying 2-3 years. We are saying it will be before that. No, I am saying in the next 2-3 years, if I take a CAGR, it will be 20%. I am not saying we will wait for Yeah 2-3 years. That is what we are targeting. This, sorry, sir, I am just repeating. I can assume that there is an increase of cost will be passed on with some time lag and market conditions. That is my view. It has to be. Sir, thank you very. Thank you, sir. Thank you very much, sir. All the best. Thank you. Our next question is from the line of Manoj Gori from Equirus Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. My question would be to Mr. Nag. So we have been talking about cost savings and margin improvement for more than a year. It has been around 1 and a half year or even more than that. So far, we haven't seen any improvement. This was only a quarter-related issue about raw material prices going up, INR depreciation. But throughout, there are no signs of any margin improvement which we can term as sustainable. Secondly, when we look at the numbers of other companies who have reported, we don't see that impact into those companies. Whether we talk about large appliances, we talk about electrical companies, even there, we are not able to see any such major impact on their costs. Third, we have been talking about annual savings of roughly around INR 200 crores, and we are talking about roughly around INR 20 crores impact of INR depreciation and material increase. But still there should have been gross margin improvement and EBITDA improvement. Rather than that, we have seen margin contraction. If you can, please clarify on these three issues first. Sanjit, you first answer, then I will take it. Yeah. On the margin not improving, I had already answered that there are three things. One is commodity Forex going up has eaten into cost innovation. During the quarter, we had given consumer offers like cash backs, so those had a negative impact on the P&L. We got a growth, but whatever gross margin came out of the growth, part of that was eaten out by this promos cost. Sir, probably if you look at other companies and into the category, let's say AC is a category which has been relatively more impacted as compared to washing machines. There, the discountings were normally higher versus the trend. Still, we have not seen such kind of impact on the overall margins. Secondly, we just talked about 3%, 3.5% market share into room AC. When I look at the industry size of close to around 1.3 CR to 1.4 CR, it comes to close to roughly around 5 lakh units, which is our present capacity. We are doing some manufacturing for brands as well. This data, I am not sure. Can you explain how we have derived that 3.5% in room AC on market share? The room is split ACs I am talking about. You might be considering the window AC also, but I was talking about the split AC industry. In the split AC industry, the share which we currently have is around 3%, 3.5%. Even if we consider 10% would be windows. We are not into window AC. Sorry, you said something. I missed out. Yeah, I was just saying, if we look at window AC contributes close to around 10% of the room AC market. Around 35,000. Out of 1.4 CR- Yeah Let's say 15%. Yeah it comes to close to around 12 million units. 12 million units into 3.5% will be roughly around 4.2 lakh units. Yeah. We do some manufacturing for brands as well. That number should be around 1.5, 2 lakh kind of number. No, that figure is not that high. Our majority of the sale is into our brand. Okay. Mr. Bikramjit Nag, if you can clarify on the cost savings, because we have been committing and we have been talking about the same for almost 1.5 years. I think the first point I would like to state is, I will explain this. The first point I would like to state is, overall end-to-end management has not been up to the mark, which is right from looking at the entire chain, which is sourcing to selling. This we have to tighten. The four, five areas to tighten, which we are doing now. Actually, one of the points came from one of the shareholders on one of these conference calls. I will repeat this point, and why I am thankful for that is, in one of the calls, one of the shareholders said, "Look, don't try and do everything yourself. Use third-party consulting firm, et cetera. You will move faster." I never did that. We delayed it. Then we brought in Alvarez & Marsal. A lot of delay happened. That's a mistake on our part. We couldn't get it done internally to the extent desired. I will tell you why this point is important for me, or for us as a company. We then brought in McKinsey for a different project, which has now really given us traction in e-com. We are expanding that to marketing cost with McKinsey also. Profitability will come from the following. Kartik, if you have summarized this better. One is good management of scheme, which is both rationalizing of scheme as well as ensuring tie-ups with all those 3,000 odd accounts. 3,000 odd accounts roughly translates to about 9,000 to 10,000 counters. These tie-ups are not done. Now what we have done is, post this McKinsey document, we have nine points to work out account-wise or counter account-wise. Account is what? Suppose there is an account called Reliance. Say Reliance has 500 counters. Or there could be- a single owner driven account which has single dealer or single shop, or we might have two shops, et cetera. These tie-ups are not done with all. The tie-ups are only done with approximately 10% or 15% of accounts, leading to approximately, say, 30% of counters or 25% of counters. There is a lacuna here. And tightening of this now, we have a full-time team only to do this. This came out- of the McKinsey team. What to do in that, so McKinsey, and then we also agreed, the team, our team and McKinsey together came out with a document which also said, account by account, all product tie-ups, rationalizing of scheme, rationalizing of cashback, et cetera. Schemes to be done on higher-priced products, et cetera. So if pricing is higher, pricing is better, or where our margin is better, where we see more scope, we do something extra there, and tighten it in areas where margins are tighter. You understand? Looking at products, et cetera, these tie-ups need to be done, which is not done well. Now, that work is going on full steam. So one is material cost, other is this. Then comes logistics cost, which we are working with A&M, and the logistics tower is being built. The logistics tower will have to control INR 150 crores on logistics cost, INR 150 or INR 175 crores on logistics cost. We expect approximately 15%-20% there. All of these things together is going to give us double-digit margin. I'm confident of that. The team has not been able to execute or project manage the entire thing. That is a problem. That we are correcting. Not having a CEO has also had its faults. We found our CEO. The CEO has agreed to join by April 15. The CEO is not from a consumer durable company. The CEO is from a different industry, but very well experienced in sales and distribution and marketing. He comes with that background, and comes from a company of over INR 20,000 crore sales. The company is very well known, and well known for consistent double-digit margin for over 20 years. I think we found the right person, at least, to lead on the volume and margin front. This has just taken a lot of time. We had totally seen about 476 people. The last person who we selected did not join at the last minute. This guy, the new, has agreed to join, and he is a better person. I cannot disclose the name now. Yeah. He sent us a letter yesterday confirming this. Sure. The team went through this. I think- Yeah I think on the margin side is point on material cost innovation with A&M, logistics cost with A&M, e-com with McKinsey, and marketing cost with McKinsey. All of this will lead to- And which will lead to the tie-up of all those 3,000 odd accounts, et cetera. All of this will lead to margin. That is my belief. No, sir. It sounds interesting. Margin has been bad. It sounds interesting. Just to counter this Your point on margin on when you compare us to other industries, you are absolutely correct. Before this call, we had a call. I said the same thing to my team. Even if you look at, for example, Engineering Division. Engineering Division also faces price increase issues. They manage it. Our management of this has been not up to the mark. Mm-hmm. Get it, sir. In the appliance division. Of course, copper suddenly growing after being. These are things we have to tackle. So now, just lastly, when you talked about copper moving up, INR has been under pressure. Though it has improved in last few days, but if you look at copper prices, copper prices continue to remain at around LME copper at 13,000. Yes. And we are just planning to take price hikes. So how can we expect? That is not. Yeah. So how can we see probably the cost savings actually flowing in? Probably not in Q4 also, because we have not taken a price hike. Yes. But somewhere in FY 2027 point of view, how can we see actually positive impact because of the cost rationalization measures that you are taking, actually flowing into P&L? The cost rationalization thing, even though we are saying 200, our internal target is higher. Point number one. Point number two, we are working on certain DAV, et cetera, to see how we can rationalize things. See, in AC for example, hypothetical. Let us take a hypothetical scenario. Suppose copper goes to 16,000. Yeah. 1,600 whatever. LME grade copper. Suppose it goes from present. Suppose if it goes up by another 20%. Then what do we do? These are scenarios we have to think through. I've told the division this. Mr. Govindaraj, he's in charge of this, so they are now thinking through on various scenarios. If the commodity prices, A, B, C, D happen, then what can we do, and how should we work on this beforehand? I have said that. They have to work out scenarios and work out defensively on what all we need to do. There is no point in the quarter passing and then just reporting the price has increased. I have said exactly what to them. That work is still not fully done, and this is the same thing I have told A&M also. We have told A&M, if you are going to work on cost innovation and parallelly ABCD happens- we are not really gaining. We are involving them in this also to think it through, what else is possible. So that it flows into P&L in a positive manner. Right. Got it. I hope, sir, things fall in place for you, and we see margin improvement. Wish you all the best, sir. Thank you. Thank you. In order to ensure that management is able to address questions from all the participants in the conference, please limit your questions to one per participant. If you have more questions, you can rejoin the queue. Our next question is from the line of Naveen Baid from Nuvama Asset Management. Please go ahead. Yeah. Thank you for the opportunity. I had a question on the engineering division. What sort of growth are we seeing over the next couple of years, and which segment is going to be driving that growth? Just some colors on the margins. Hi, this is JM. On your first question, our growth targets are in excess of 20% per annum. We intend to grow, and we are pushing the order obtainment in that direction only. Regarding margins, we are currently at 14.5% PBDIT, which is slightly lower than previous quarters. This is because some startup expenses we are doing in the electronic sector. We hope to recover that, and engineering division's margin objective is 17%-18% EBITDA. What sort of CapEx are we kind of envisaging? This year, engineering division is nearly doing INR 100 crore of CapEx. We are modernizing our lines. We are adding new presses. There are new businesses from newer customers which have called for- Santosh, can I just interject please? Sorry. I am interjecting. I think the CapEx plan what you are telling him is not fully correct because this is only possibly Bangalore you are talking, but when you take into account Delhi as well as Gujarat proposed CapEx. Then what is the CapEx? Nisarg, I was talking what was approved in FY 2025, 2026, the Gujarat thing- That is- Let me first see. We have about INR 200 crore of CapEx plan for our new plants in Gujarat. If I may share, we are in advanced talks with a company- Yes for a project which is not entirely something that we do now, but it is for the automobile sector. Yes. So we are talking to Government of Gujarat as well as to private parties for land, et cetera. It is a project with planned sales of how much, I think INR 400 CR. Yes. About INR 300, INR 400 CR. Phase 1 will be INR 200 CR, going up to INR 400, INR 500 in the 3rd year. INR 200 crores of investment likely to lead to peak sales of INR 500. No, 1 second. This investment, we are now looking at should we do a leased plant or should we buy the land and do it? That is being worked out as we speak. If we do a leasehold plant, it has certain advantages as well as disadvantages. Of course, the CapEx will come down. We are not sure as yet on that score. With the plant, suppose if we buy the land and do the building and all, then it comes to INR 100 CR or INR 120 CR, something in that region. Without that, I think it will be around INR 50, INR 60 CR. Other is a project in Gurgaon, which will be around the same, about INR 50 CR, INR 50 to INR 75 CR. From that angle, these 2 alone will be INR 200 CR, Delhi and Gujarat, if we do land as well. If we just lease and do it, then of course, the CapEx is reduced. We are looking into this, and we will take a call on this in the next 30 days. If I just for the moment assume that you will actually buy the land. So INR 200 crores of CapEx in Gujarat and NCR and INR 100 crores in Bangalore, so INR 300 crores of CapEx in the division. You said this could lead to peak sales of what, INR 500 crores or more? Peak sales? No. So only Gujarat will be INR 200 in phase one. Okay. It will go up to INR 400 in three years. Okay. The project in Gurgaon should give us INR 100 crores plus. Project in Bangalore should give us INR 100 crores plus. Nisarg, if we count the chain factory. Yes. And the chain factory in Bangalore. That will give us INR 150 crores-INR 200 crores in the beginning, going up to INR 500 crores by fourth or fifth year. Which plant are you talking about? This one? For the chain. Motorcycle chain. Okay. Got it. For the chain. All of this together then could be with land and all, INR 300 CR-INR 400 CR. Without land, of course, it comes down. The turnover we are expecting is far, far higher. We will give a proper note on this in our annual report in the quarter of May, we will give a proper update. Got it. Thank you. Or we have a further call. Thank you. All the best. Thank you. Thank you. Next, we have a follow-up question from Lakshmi K G from Tunga Investments. Please go ahead. Yeah. Two things, sir. From a manufacturing division, can you just explain what is the business breakup between various components and in terms of, I think, which are the areas where we have a distinct leadership in those different sectors. That is one thing related to manufacturing. Second, in terms of our motor division, can you just outline, because you are trying to get the motor stable, there have been some changes you have done. Can you just let us know, has the products come out well? And then what are your plans for both domestic captive as well as domestic non-captive? What are you planning to do with that? And third is with respect to our distribution, in the last nine months, how we have increased our distribution footprint in the appliances division. If you can just give answers to this, it will be helpful. Can Anand or Mr. Khanna please answer about motors? VC, you will answer. Who is there? Anand and Mr. Khanna are there? VC? No, sir. JCF. I can answer. I can answer on that note. I can answer on that. I think as far as AC motor goes, suppliers have already started to go up. We are talking to the other companies, which is Voltas, Blue Star, et cetera. With Voltas, it's gone to the R&D, and the discussions have started on the technicalities, et cetera. I think Blue Star thing got delayed for various reasons with Blue Star, and they are now talking to us. I think our people are visiting them around the 14th, 15th of this month, and samples will be sent. With Voltas, the volumes are very large that we are talking on. If you see the AC market, as you said, it's 15, 16 million, someone said, and Split is about 90% of that. It's all imported nowadays. We need to break through against Chinese pricing. Government of India has still not done the BIS thing on motor as yet. We've started working with the ministry to impose the BIS standards also. Why that is going on? Because there is no standard first. The government is working with us on this. I think, suddenly you will see there will be a spurt in the Atmanirbhar Bharat scheme, and domestic thing will go up. We are well poised for that because we have capacities on the ground. My view is even with this, it's taken so much time. The project management again has not been done as well as it should have been done. I think we may fall short of capacities in due course, especially in AC. If you see, the plan is to sell to others. In washer, we've reached out to others, for front load, but we've not got any favorable thing as yet. We are again reaching out to Bosch in India, and we've also started talking to Samsung again in India to see whether they can take it from us or not, instead of importing it from wherever they're importing it now. Those discussions are on, but nothing has crystallized as yet. Ideal scenario should be 40% should be sold internally, 60% should be sold to others. That's the plan as set for them, so we are working on this. What kind of addressable market? What kind of revenue potential? Sorry, I cannot hear you. Sorry, I cannot hear you. What kind of revenue potential you can actually anticipate in this particular division? Okay. The addressable market. See, the market for AC motor is 50 million or 40 million, whatever it is. That is the market today. Our- What is the realization Sorry? No, what is the realization from motor? I am just trying to understand. No, we are working out those numbers, Peeyush. But anything less than 10% margin will not work. It is not financially feasible. That is the target we have, and we are not achieving it is a separate point. But that is what we need to achieve. The Chinese have done it. The Chinese are very good at cost innovation. We have to compete with the Chinese, and we have to become better than them. There's no point in all Indian companies saying the Chinese prices are very low. We have to compete with them. That's it. Good. Okay. And sir, in view of the distribution part and the business mix of motors. Sir, not the motors, the engineering division. Because you're talking about 20% growth, 10 comes from that, the growth would actually come from organ- Which division? There are two questions. One is on the appliance division. We want to know how the distribution footprint has actually increased in the last nine months as opposed to the previous year, nine months. And second, in terms of the engineering business, we are talking about a 20% growth. How are you going to get that growth organically? And therefore, what is the business mix we have in the engineering division between two-wheelers or I can't understand the other one. What is your opinion? It is getting cut on my form. Sir, I have 2 questions on the engineering division. His question is that how are we going to ensure a 20% growth in engineering division, and what are we- Yes. Sir, we are already supplying to all the OEMs in India, whether in 2-wheelers or 4-wheelers. All of them buy from us in some way or the other. Number 2, we are also actively present in tier 1 and tier 2 companies also, who are supplying to the OEMs. Now, we are increasing our share of business. Our marketing is driving the increase of share of business with these companies. We are also venturing into newer areas. This Gujarat investment, which we talked about a few, it is a completely new area. It is a futuristic thing that is going to get us a completely new, about INR 200 CR to start with. That will be an absolutely new revenue stream for us. Similarly, we are into other breakthrough projects, what we call newer products, which have become mandatory due to government legislation like Brexit, et cetera, we are venturing into that. These will give us additional revenue streams. So 3-pronged approach, basically increase the share of business with each OEM and each of our customers, get into newer revenue streams through investments, and just push marketing to get it. We are quite sure because many of the orders are right now in maturity stage, and we are also preparing ourselves for the investment that will follow. So we are more than confident that we will be able to deliver this target, which we are talking. What are the business mix between different segments in this engineering division between two-wheelers or non-two-wheeler products in the class? Sorry, your question was what is the business that we are getting into? No, no. What is the business mix? How much percentage is driven by two-wheeler OEMs and how much is driven by passenger cars? Engineering division, roughly 50% of our turnover comes from two-wheelers and 50% comes from four-wheelers. Yes, that's it. Another question on distribution, how we have done on distribution or IFB Points, with respect to last year and this year in the appliances division. I can answer that. You see, as I said, post the McKinsey report, we are very focused and this even from before we've been trying to do, but not done a very good job at, which is the 3,000 odd accounts, which are all the Pareto counters. Those need to be properly supplied with all our products. Most of these will fall under the direct dealer route. I think only about 15%-18% will fall under the distribution group. We hope that all these tie-ups will be done by April. By April end actually. It may not be done by 31st of March, but we sincerely hope that all these tie-ups will be done by April end. If that is done, if we are able to do this, of course, it's a very big if, but I'm hoping now it will get done, because real focus are coming to this, post the McKinsey thing, and the team working on this full time. You will see growth across categories in each account. Reliance is an account. For example, today, say we are weak in AC or in refrigerators or, say, any one of the two. We need to talk to all these accounts for all the products, and even to small dealer on all the products. Hopefully, this will get done. I'm not calling it distribution alone. I'm calling it direct dealer sales as well as distribution. Correct. Mr. Nag, one last question to you. If you just look at for the next three years or five years, what are the markers of success you have in your mind, particularly in terms of the appliances division or it could be an overall division? When you look back after five years, when you say that we have been successful, what are the vectors you're actually thinking that you'll be satisfied? We thought of 3 years. We've not thought of 5 years. There is an internal thing for 3 years. In no category should we be below 10% market share, point 1. In more category, and especially in washer, et cetera, our market share should grow significantly from wherever we are today. Suppose in top loader, we are at, hypothetically, whatever share we are at, we should get double the share, et cetera. I think we have an internal plan, but because we don't give guidance, I can't talk about it in that manner. Our thing internally is always talking on exponential growth. We have not delivered on that. We are very well aware of that. What we are doing, I'll tell you, apart from these margin factors which you all have discussed, and correctly, and whatever we've answered, we have answered, this point of bringing in A&M as well as McKinsey, et cetera, the delay happened. I did not understand the importance of bringing in these firms and making a separate team work on it. What I mean by separate team, from our operations, we have pulled out people and put them into this setup. Now, for example, McKinsey has 5 people in Goa or something like that. So does A&M. With them, we have put in another 5, 6 people. You see that team working together as one and chasing impact, that is something that has taken me by surprise. Most importantly, my internal people are very, very enthused by this. Whenever corrections are needed, they are correcting things themselves. That has been a good thing. Now, coming back to the point on growth, we only talk on exponential growth internally, including in auto component division, for example. Apart from the processing, M&A is on the cards. So far nothing has happened, but we've seen exactly 57 companies, and we could have bought many of them. We chose not to buy out of financial prudence. Many of the companies were extremely good, but they were very expensive. Some we did the deal and then they backed out by saying other things, et cetera. We had to back out, sorry. We are aggressive on both these divisions, and especially appliances. No company can be considered to be run well if it's running at 5.5, 6% margin. I am very clear on this. What we are doing to correct this is also, if you see at the top level, lots of people we have replaced, lots of people in the regions we have replaced. We have replaced people in the branches. We are doing a correction on manning. This correction on manning that we are doing now aggressively, based on data, is helping to rectify things. It will help to rectify things in the time to come. As a company, let me tell you also, and as an individual, me personally, it's very difficult when you replace people. I've gone very slow on this. I don't enjoy doing it. Then we came to the realization that we had no choice. It's very painful, but the process has been slow, and we are aware of that, but we've now started doing it. We are doing it aggressively now, and lots of people we have changed, which we have never done. I have been in this company for 30 years, and we have never done it. We are doing it now, and I am sure we will see results. Wonderful, sir. This is being very Unless we get exponential growth, and for exponential growth in appliances, it has to be more than 20% a year. 20% is not adequate with the capacity that India has. Got it. I think it is clear that in spite of having such a great brand, we are underutilizing it from a profitability point of view. I hope all these initiatives with Gaurav and this company will do wonderfully well. Thank you so much. Thank you. Thank you. Our next question is from the line of Vinod Krishna from Avendus Wealth. Please go ahead. Sir, am I audible, sir? Yes, please. Sir, can you throw light on what are the kind of feedback that you are getting on your refrigeration or acceptance, competition, refrigeration? So that is a new category for us, and the ACs also. Is it well accepted or any changes to be made in the products and we are doing it? So if you can throw more light on, because these are the two new categories where we are having very small market share, and what are the plans to increase the market share? Because these are the two where you will be having less than 10%. I think the first thing on the product on refrigerator is, as I said, many of our team members at the branches were just not adept at handling all the products. That took us time to understand why they are not able to do it. But we just realized some people cannot do it or will not do it. So we replaced most of them. That is the first thing. On the market side, the feedback has been by and large product is okay. There are certain areas where cost innovation has to be done. The product has been configured for far higher specs in certain cases. There are cost innovation things there which we have to work on in certain areas. The one thing in refrigeration which has come out clearly is that IFB should not have gone for DC, but should have gone for higher end product first. Yes. But the thing with that is if we had come out with the higher end product like what Geepur has come out with, for example- then placement would have been difficult or not in the counters. Okay. This call was taken then, and I was party to that call, surely. But clearly it is coming up now that the channel expects a higher end product from us and not what we have. There is an issue there. But now we have what we have, and we must sell the capacity. These tie-ups that we are talking about and insisting on with my team for the 3,000 odd accounts is very essential to sell capacity. First point is that. Second point is, will we go as per market demand for CapEx to make more higher end products for refrigerator? Answer is a no. Today it is a no. We will not do it. We are looking at possibilities of import of CKD and all of that, and seeing whether this is something we can do over the next 9 months or if not, we will not do it. We will only focus on whatever we have, postpone CapEx now till it becomes profitable. Okay. It is clear on that. No more CapEx on this. As far as AC goes, we have to push the higher tonnage ACs and the higher end ACs instead of fighting at the lower end. Sure. And one of the things we have seen from the market is if you see pricing, MOPs for one category of AC, let us say, sometimes our pricing, we are at number 8. Okay. So we are between 7 and 9 in pricing in different markets. Okay. Now, we should not do this. We have to see how to improve brand recall for AC and improve pricing. Okay. That is something marketing needs to work on. That is something- So AC, our product- AC product, we have seen some issues, some technical issues we have encountered. Okay. We are correcting those. But by and large, on cooling side, we have not seen much issue. On cooling side- Great we have some issues on fit and finish, et cetera, is there. Okay. Some issues with the remote we have encountered, but all of those have been fixed. You are confident that your market share in AC will go from 3% to 10% over the next three years? I am not. The question is not of my confidence. The question is Okay what the company must do. The company must do it. Otherwise company should not be in the business. When I say confident, I mean you have a plan. Every company should have a clear plan on what it must achieve. Your question was, by and large, what will be- How do we go there? et cetera. Correct? Yes. How do we go there, though? If we are not there, how do we go there? We will go there only by fixing the team, by having a very good team. Okay. Market by market, as well as in the factory. There is no other way but fixing organization. Got it. You are confident. When I say confident, I am not saying you give the guidance. Sorry, but I was just saying that these are all fixable things. We are not having things that are not fixable. Right? That is my question. Well, I can only assure you, whatever question you are asking me, on a lighter vein, my mother is asking me the same things. Right. How come your sales are not improving? Share price is coming." That is exactly. No, sir. Share price is okay, but IFB is a well-known brand. Actually, it is known for a premium positioning, and there is so much we can actually do. I am just trying to understand whether the path is full of frictions or it is. You will see in the next. Mr. Govindaraj, if you are here on washers, the things we are coming out with right up to 14 kilo. When is that going to be done by? Sir, on the 14 kg machine, 12 and 13 kg will be there in September, and 14 kg, we should be there in November or December. By December, I think all the lineup will be ready. Yes, sir. Top loader also. Correct? Yes, sir. Okay. You will see us coming out with higher-end products, et cetera. You can actually benchmark if not better. The other thing I told my people is, "Please stop benchmarking and become the benchmark yourselves." I told them that we have to do that now. That is the challenge if you ask me. Sir, if you do not mind, I just repeat my. I am just asking, like take AC, because AC you are seeing the path to become 10%, right? It is not something undoable. That was my question, because sometimes we will know. It is doable. It is doable. That was my question, sir. We must do it. If we don't do it, we should exit AC. Got it. Because other places you have entrance- We should not be in that business. Top loaders, front load. Because other places you have entrance and it is more easier. Here you have not entrance, so that's what I was asking, both refrigerators and AC, is the path to 10%? Here it's a failure. As I'm telling you, here it's a failure to create demand for our product by marketing. Okay. I'm strengthening overall company's marketing ability. Okay. And one of the things which I forgot to say is, one of the things we are working on is, we have this 10 million customer base and cetera, and also direct customers, 12,000 we have B2B customers for our industrial products now. And how we sell to a customer base directly is a business by itself. Got it. It's a huge opportunity, but we don't know how to do it. We as a company The digital, the- We have all the tools. Suppose you are a customer. Let us assume you have, let's say, an IFB AC, for example. But I'm not reaching out to you on a regular basis to find out what you need and for you to know what all we have. Just like a bank does with you. If you have an HDFC account, they will send you things on housing loan and car loan and this and that. You understand? Got it. This is what we are working on now. We are strategizing this with McKinsey also. Got it. No, thank you because IFB is a great brand, so expecting better growth and better all the best wishes. Thank you. Thank you. Ladies and gentlemen, in the interest of time, that was our last question. I would now like to hand the conference over to management for closing comments. Soumitra here. Thank you very much for participating in this call. We will be meeting again after quarter 4. Thank you very much. Thank you. On behalf of Nirmal Bang Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.