Q2 25/26

Nov 7, 2025

Summary

Q2 revenue, EBITDA and PAT rose YoY, while H1 EBITDA margin eased. Appliance cost programs target material and logistics savings, with fixed-cost actions still ramping up.

Ladies and gentlemen, we have Soumitra Goswami, sir, connected with us on the line. Soumitra, you can start. Hello? There is something wrong with your line, I think. Yes. Soumitra, sir. You can start. 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 quarter 2 of FY 2025/2026. Now, I will inform you about the quarter 2 result. Revenue for the quarter was INR 1,327 crores against last year's INR 1,189 crores, which is a growth of 11.5%. EBITDA for the period was INR 102.5 crores, and its percentage to revenue is 7.7%, as compared to last year's INR 79.04 crores, which was 6.6% on revenue. EBITDA amount came across a growth of 13% year-on-year. Fixed expenditures for the quarter were well within budget. EBT for the period was INR 68.3 crores, which is 5.2% on revenue against last year's figure of INR 44.6 crores, which is 3.8% on revenue. Quarter 2 PAT was INR 50 crores, which is 3.8% on revenue against last year's INR 33 crores, which was 2.77% on revenue. YTD September 2020 figures are like this. Revenue for the period was INR 2,637 crores against last year's INR 2,434 crores, which is a growth of 8.4%. EBITDA for the period was INR 172.45 crores, its percentage to revenue is 6.5%, as compared to last year's INR 165.57 crores, which is 6.8% on revenue. Performance for the YTD period was impacted due to subdued quarter 1 results, which impacted the overall growth momentum for the six-month period. Fixed expenditure like quarter 2 were well within budget. EBT for the period was INR 102.25 crores against last year's figures of INR 97.04 crores. Half year PAT was INR 75.11 crore, which is 2.8% on revenue against last year's INR 72.14 crore, which is 2.9% on revenue. Before we move to the question and answer session, I would like to highlight briefly on some important points, where we intend to focus on for driving our future improvement. Those points are: Ongoing material cost reduction initiatives are expected to deliver annualized savings of INR 200 crores. Out of that, Soumitra, you have to specify this is for appliance division only. It is for appliance division only. All the initiatives, whatever I am talking now, it is for appliance division only. Material cost reduction initiatives are expected to deliver annualized savings of INR 200 crores. Out of that INR 14 crore, we have realized already in first half. For the balance period, balance amount of around INR 60-70 crores will be realized. On fixed cost reduction, we did not do well in this area. The team has been prepared. The team is focusing now to address this area, and initial results are expected to materialize from quarter 4 of the current fiscal. On logistic cost of approximately- Are you working with Alvarez & Marsal for this specific team? Yes. We are working with Alvarez & Marsal on this. On logistic cost of approximately INR 150 crores, a cost optimization project targeting a 10% reduction has been initiated. A&M and our team are working together on the same. Efforts are underway to improve counter sales representative productivity and optimize market coverage. We are improving the efficiency of scheme payout. Up to 30th September 2025, we have reversed INR 28 crores from dealers who did not achieve their volume targets as per the tie-up letter. The annual scheme payout, including consumer finance and scheme of service, stands at INR 1,500 crores up to 31st March 2025. We continue to identify additional inefficiencies in this area, and further actions will be taken in the second half of this year. Our intent is to achieve double-digit margin by addressing all the five points which I have spoken now, along with enhancing counter level extraction and expanding the market share on each individual product category. With this, I will be requesting to start the question and answer session, please. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Vivek Kumar from Best Plays Research and Advisory LLP. Please go ahead. Am I audible, sir? Yes, you are audible. My general question on the home appliance division. We are having good market share in front loaders, top loaders, and microwaves. This newly, we are now concentrating on refrigerators and air conditioners. But if you go to any big retail mart, you see lots of competition. How should we think? I am not saying you will not be able to make it or you will be able to make it. How should we think? Are you going to concentrate in few circuit, few locations, states? Why do you see you can go to 15% market share that you are seeing in AC? Why do you think you can go there in, I am not even saying this timeline, but there should be some assumptions, right? That you have put up your own plant, you are doing everything in-house, which is very commendable. There should be some assumptions from the management side why we will get to that market share in both refrigeration and. Because if you see, there are Korean companies, Japanese companies, Chinese companies, and also some Indian companies across all these categories. I am not undermining either way, I am just saying, what are the assumptions that you think this AC and refrigeration, you will get some market share over the next 4 or 5 years? I think Ranjan Mathur will answer this question. He's the sales head. One thing, this is Vikram Nag. I would like to say, I don't think anywhere we have said AC will get 15% market share. I don't think we have said that anywhere. Okay. My point is you want to get established. Yeah. However, I think the fact is, if you are in a business, in the business, you have to aspire to do well. To do well, many things you have to do well. One is your design has to be good, the look of the product has to be good, durability has to be good, your sales structure has to be good, your overall cost structure, including material cost, et cetera, has to be good. Logistics and warehousing has to be very good. Even if you take a company like Panasonic, which is a global company, with everything being very good, by and large, they have failed in a lot of product categories, and they have decided to exit some. We feel, however, that in many of the product categories we are in, we can do much, much better than we are doing today. That is our belief. However, from here, Ranjan Mathur will take over, please. With regard to ACs and reps, the initial response, both for refrigerator and ACs in the market is very encouraging. Today, we call it modern trade, we are being placed across, and the overall secondary movements are reasonably good. We are quite confident that we will be able to get our rightful position in both the categories. Okay. Is there any targets or growth rate targets you have on the home appliance division over the next 2-3 years? Because we have now undertaken cost initiatives with the sales extraction and now that I think, I am not saying there will be no new products, but at least good solid product across clean cooking and cleaning. Any growth rate you can give target out of 3-4 years, I am not asking this year or next year. Home appliance division target, growth targets, revenue targets. Basically, we do not give any forward guidance, but what we envisage is overall, the growth which we could feel or we could assess, we will be growing at a far rapid pace than the industry and we will be gaining our market share. Can we assume a 20% growth over the next 4 years now that lots of investments have gone over the last 6-7 years? There is not much growth. I am not asking you to give guidance, but there should be some assumptions that, okay, 20% should not be difficult or 10% should not be difficult. Like that. I am not saying you should grow only at 20% or 10%, but some growth rate should not be difficult that we have done so many investments over the last 4-5 years. Look, all this will depend on industry, but we are quite confident of growing at a much rapid pace. So much rapid pace can be double digits, at least 20, north of 20 or north of 10? Yeah. It has to be more than that. It has to be around that. It will be more than double. Thank you. Thank you very much, sir. All the best, sir. Thank you. The next question comes from the line of Lakshmi K from Tunga Investments. Please go ahead. Yeah. Thank you. I just want to understand your cost-saving things which you are actually talking about. I want to understand, whatever tax you are saving, thinking whether it would actually be passed on to the consumer or it will directly come to our bottom line. Or it will be spent on advertising and things like that. How are you thinking about the cost savings? Look, cost saving has nothing to do with saving on tax. They are two different things. Saving on tax has to, on the GST saving, et cetera, everything goes back to consumer. No, I am not talking about that. Cost saving is different. Sorry. I am talking about the cost-saving initiatives which you have taken, which is in the variable cost saving and the fixed cost saving, which you have actually discharged as a project. I am talking about that. That will go to bottom line. Okay. In terms of the variable cost savings among the INR 200 crore plan which we had, how much you think would actually get affected for this year? I think we just answered that. We just answered that, about INR 70-80 crores will come this year. Balance will come next year, which is as per our last quarter figures. Got it. In terms of the fixed cost savings which you talked about, I think it was mentioned that there is some kind of a delay in fixed cost savings. Can you just talk about- Yes. Now that project has been given to Alvarez & Marsal as well. We now have a team full-time with Alvarez & Marsal and ourselves to look into this. In this, there has been no movement at all, sadly. A lot of movement on material cost and other things. Got it. Sir, moving on to your BLDC motors, can you just help me understand, because there has been some mention that you have started, I mean, not only producing, but also having some orders in hand. Can you just talk about the BLDC plan for now? BLDC plan for which one? Washing machine or for AC? For both, sir. How many we are manufacturing and- Washing machine supplies have started. Okay. Full stream, to IFB Industries' Goa plant. We do not have any other customer, though. We are only supplying internally now. AC has also supplied now. I think we supplied in October certain dates, certain number. In November, I think we will do over 20,000 or 30,000 numbers. For the OEM for AC, the OEMs have already started putting our motors, are working on the development program with us. Got it. AC production has started also. I am reviewing that. Got it. Sir, when I look at your refrigerators volume, I see that the realization has actually gone up by around 5% when compared to the last quarter. Can you just help me understand what is the mix of Is it because of the no frost also coming in, or is it for any other changes you have done? No frost. I think no frost has come in. As soon as volumes increase, I think you get better economies of scale across the board. However, in refrigerator overall, if you see, we are still unhappy with the volumes. As a percentage, if you see there has been sizable increase, but compared to our internal target, we are still about 30% short. Got it. 32% short. Got it. Sir, can you just give the volume number of front load, top load machines for this quarter? Karthik, could you please take over, please. You are talking Q3 or Q2? Yeah, the current, I think Q2. Q2 we sold around. I do not think we gave volume. I think if you see for whatever we have done so far, July, August, September, and October have been good. Got it. For top loader it has been very good. Sorry, sir? For top loader it has been very good. Okay. In terms of capacity for front loading and top loading, what has been our capacity right now and where do you think you will actually end in terms of utilization for the year? Karthik, I think capacity we still have a lot to do in FL. But top load, I think we are using sizable capacity. But Karthik will answer this. Sir, can I answer, sir? Govindaraj here. Yeah, please. As far as the front load is concerned, our capacity has been 85,000 per month. In the month of September and October, we are almost close to 92%-93%. Going forward, we are doing activities which we want to enhance the capacity by another 10%-15%. As far as top loader is concerned, our capacity is 60,000, and in September we have almost achieved 95% utilization. Same way, we are looking forward to about 10% increase in our capacity. Got it, sir. Sir, as we grow forward in the next couple of years, are we mainly using- Mr. Govindaraj, there is a question. Exactly what he is asking. For two or three months if capacity utilization is good, the question is the balance nine months. Yes, sir. When you look at it overall, then optimization is not good. That's his point. Understood, sir. Yeah. If you just increase capacity, it doesn't make sense. Unless it increases substantially. It will only help us in better. Yes, sir. Sorry, should I go ahead? Sorry. Yes, please. Sir, my question is that for the full year, I assume your capacity you are talking about all the shifts included. My question is that, from a full year point of view, what is the total capacity you can actually do? Is it 85,000 into 12 and 60,000 into 12, and three shifts a day is what I assume. As we go forward, maybe in the next one to two years, how can we add capacity? Do we have a place to add the assembly line, or how do we think about it? Yes, we have all that. Got it. There is space for the next two to three years. By and large, we are okay. But if sales grow by that amount, by a huge amount, then we may need to add tools, et cetera. Got it. We are working three shifts a day, sir, on both the things? Not for 365 days. In certain sections, we are working three shifts throughout the year, like in the plastic molding section, et cetera. But certain sections we are not. Got it. There was a mention regarding having a McKinsey for a consulting engagement. Yes. Can you just help me understand what would be the duration, or what are the things you are expecting out of that as an outcome? It's about a 12-month thing, basically on e-commerce. We realized that the processes, et cetera, we may need to update. The better word is modernize, that we have internally vis-a-vis the best practices followed by other leading firms. We realized we need an outside firm to just help us speed up on this. Hence, it's about a one-year assignment. Along with that, we've given them a target of marketing cost optimization at the same thing, so that the project cost is cost neutral. That's our agreement with them. Got it. Thank you so much. I will come back. It's marketing cost optimization. Okay. It is marketing cost optimization as well as eCom. Okay. Thank you, sir. I will get back in queue. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Udit Bhakoria from Tata Marin. Please go ahead. Yeah, thanks for taking my question. Just wanted to understand, historically, despite being a market leader in front load washing machine as well as microwave ovens, why were our margins low? What was the rationale, or what was the thought process then, and what is the stabilized margins? That is the first question. The second question would be, if you can just break up that INR 200 crore, how much is due to fixed cost reduction, and how much is material cost reduction, and what are the other things? Yeah, these are the two questions. I think the major thing on margin, if you see, you will see our material cost is high and fixed costs are high by and large. I mean, that has to be fixed. Any good company works on double digit margin plus. Yep. Double digit plus margin. We have to get there. We are very clear on that internally. The fact that it is taking so much time is bothering us, and hence we brought in external firms to help us. In fact, in one of the investor call long time back, one of the investors said to me that, "Look, it is much better you work with an outside firm because it will help you move faster rather than trying to do this internally." I had resisted that, and we wasted a lot of time. We have corrected that. We are very clear on the margin objective and various corrections need to be done, including material cost, logistics cost, fixed cost, et cetera. Schemes, optimization of schemes, which Karthik spoke about. All of this has to be done. We are clear on that. Is there any quantum which you can share, of that INR 200 crore, how much is material cost, how much is fixed cost? I think as we've said, in this year, our target was 100, but I think we'll end up with material cost of anything between 70-80 CR. The balance will come between April and September, October of next year, significantly. The reason for this thing is the material cost, et cetera, a lot of validation, et cetera, has to take place. When you go for alternate material and all of that. So all that project is on. So this is significantly material cost. Some of it will be logistics cost. Fixed cost is over and above this. The material cost reduction is just that you have found a supplier who is able to give you the same quality No parts at a cheaper rate, or what is it? Yeah. No. We are able to renegotiate better with zero-based cost structures, et cetera, zero-based costing in place, et cetera. In certain cases, we are replacing. In certain cases, there is design optimization, et cetera. So I think a lot of different levers are being looked into. We now have, in fact, six, seven people from our teams full-time pulled out of operation into this, and about five, six people from Alvarez & Marsal side. So it's a 12 or 14-member team, which is full-time working on this, and that is helping actually. Got it. Just talking about engineering division, it seems like there's a renewed focus and a lot of capital, because you have planned of acquisitions as well as there is organic CapEx going. What is the reason for excitement or higher capital allocations towards this division? Especially acquisition, nothing has happened. We bid for a company recently, which was into railway. Yeah. Significantly into the railway segment. We bid for a company, but we were outbid by others. The company had sales of close to about INR 300 crores, but we were outbidded by others. We think this is a good, stable business, engineering business, for the long term. India becoming a good manufacturing haven in this China plus one thing, we thought we should expand capacities of our own and look at others we can acquire, other things we can acquire in order to really grow. However, we have looked at approximately up to last week, I think we've looked at 60 targets. 60. It was 48 in last quarter, I think. 48 or 50. We looked at 60 targets, out of which formal bids we put in is I think about four. Three or four. Four, I think. The last one being this railway thing. None of them materialized, mainly on valuation. There was a Japanese company that we had bid for because they told us they will exit and come back into India on their own after selling to us. We then backed out of that transaction. So it's really taking us a lot of time. But we think this is futuristic for us. Okay. Any organic plans, like where you are seeing good traction, like where you can put good amount of capital and customer, and you have found some customers as well? Yes. If you see our growth this quarter has been very, very muted in engineering. Our internal target was much, much more. Many customer schedules dropped, and I think marketing has not done what they are supposed to do because our internal thing was much, much better. It has not happened. However, even at these lower sales, they could control costs and keep the margins intact. Internally, we are expanding capacity in the stamping business, which is in Bangalore. In fine blanking, there is marginal, there is some CapEx going in, but a lot of work is going into productivity improvement, including making tools with newer technology, which will free up existing capacity and all. A lot of debottlenecking work and in stamping business, we will put in CapEx. Also, we are looking for expansion in Gujarat. A stamping facility to put up in Gujarat. We are applying to the government of Gujarat to set up a greenfield plant there for stamping and few other things for that market where customers have asked us to put up a plant. We are doing that. Got it. Yeah. What stage of commercialization are we in the advanced electronics division? I think you had mentioned the same in your- Advanced electronics venture has started. We supply to Titan. We are doing work for Titan, so that has started. It has started slowly. I think we will have a lot more to say about this in the January quarter. What is the part that you are supplying there? We are only doing machining work now, high-end machining work. The discussion on parts is still on, but machining has started. This is for their TL division or which division of Titan? Titan for their advanced electronic division. Okay, got it. But I cannot name the customer. The end customer, we are not allowed to name. Got it. Understood. Thanks a lot, sir. Thank you. Thank you. The next question comes from the line of Mahek from NV Alpha Fund. Please go ahead. Hello? Hi, am I audible? Yes. Yeah. Hi. Hi, Chandrakanth, and good set of numbers, and thanks for taking your question. My first question is, we have seen very decent momentum in demand and in numbers, both in the washing machine segment this quarter. My first question is, do we expect this demand momentum to sustain, and what sort of growth can we see in this division? Kartik and Sanjay. Yes. What we feel is the momentum is still continuing, and October was good and November also, if we see the secondary sales, it is on the track. We expect the momentum to continue in both the categories. Right. Is there any sort of number that you would like to sort of give in terms of growth, how we see this washing machine growing this year and next year? I think we answered that. We do not give any forward guidance. Okay. It will be a level growth. Got it. My next question is, what percentage of your portfolio has actually been benefited from GST rate cut? Have we actually seen demand increasing because of that in that part of the portfolio? I think GST, the major thing was supposed to be AC. The AC sales are down. There were rains and all. Karthik can explain this better. In our case, it was basically ACs and dishwashers. ACs, the secondary sale has not yet started, which- Karthik. Karthik. Yes, sir. It is correct. Yes. You have no benefit from GST because AC, which was supposed to benefit, is totally down. Yes. Please explain properly. Yeah. The GST reduction is in two category. One is AC and second, dishwasher. In AC, since there was an industry-level issue with regard to stock, though the benefit is there for the customer in terms of reduction in selling price, because of the rains, in last quarter, there was no benefit. As far as dishwasher is concerned, there is an uptick in demand and our growth rates are also much higher than industry. We have increased on the market share also as far as dishwasher is concerned. Dishwasher. I think in this quarter and going forward, are we seeing increased demand now or it is still being affected because of the weather conditions? No, Karthik, one thing. On the dishwasher front, the GST benefit vis-à-vis the exchange rate, what has happened exactly? Yeah, the EUR has appreciated. Yeah Which has impacted the material cost. But as far as the customer, There is a benefit per sale. Yes. At the company level Karthik, can you explain that properly, please? Yeah. At the company level, what has happened is that since the imports are denominated in EUR, so the cost has gone up by 10%. So to that extent, the price has gone up. So after GST increase, after passing on the benefit to the customer, there is no net benefit to IFB in terms of margin. Got it. So next question is the INR 150 crore logistics cost savings you mentioned is over and above the INR 200 crore material cost saving, one, and No. We said INR 150 crore is logistics cost. Yeah. INR 150 crore, we are expecting minimum 10% sales, which is INR 15 crore. Okay. INR 150 is the total cost. Okay. Got it. Yeah. Got it. That is it from myself. Thank you. Thank you. The next question comes from the line of Pratiti from Param Capital. Please go ahead. Yeah. I would just like to ask around the cost savings that were mentioned here. You guided that around INR 80 crore is going to be the savings for this year via the A&M cost program. How much of this is actually going to flow down to EBITDA and how much will be offset by pricing pressure or inflation? Hello? Yeah. Karthik here. As we explained earlier, in the first two quarters we have already got INR 14 crore in P&L. In Q3, Q4, we are expecting another INR 60 crore to come in P&L. As far as commodity and Forex is concerned, we cannot predict what will happen in Q3 and Q4. At the same time, wherever possible, we are also increasing the selling price to recover the commodity and Forex impact. In top loader, we have increased the price from 1st of November. In front-loading washing machine also, we are looking at a price increase, and judicially we will do the price increase. Okay. So there will also be raw material cost savings as well as ASP increases quarter-on-quarter, right? Yes. Okay. So how much can we expect the EBITDA margins to look like steady state? No, Madam, we will not be able to give the EBITDA forecast. Okay. All right. Okay. Thank you. That's it. Thank you. The next question comes from the line of Naveen from Nuvama Asset Management. Please go ahead. Thank you. Thank you for the opportunity. Just wanted to know what's the IFB Point count and what's the revenue that you're doing in that segment? Currently, we have got 521 IFB Point across the country and they contribute to around 12% of our sales. Thank you. Thank you. The next question comes from the line of Lakshmi K from Tunga Investments. Please go ahead. Yeah. Thank you. So in terms of air conditioning, what is the total capacity we have and how do we plan to expand the OEM sales there? Okay. This is Govindaraj here. As far as the air conditioner capacity is concerned, we are about 65,000 per month capacity is available. In the peak, we are touching about 55,000, is about 90%. That is point number one. Point number two is as far as the OEM is concerned, our efforts are with our partners to give a competitive price, and we hope we will be able to get some orders on that. Got it. One feedback which I have received, you may correct me if I go wrong here, is that the servicing of IFB washing machines has sometimes been a problem because the franchisee who you appoint, when they come up with addressing the customer query, they end up selling so many other materials because they want to actually maximize their profit. If that is the case, have you corrected that particular factors and how your customer satisfaction scores in the washing machines have been? How it has changed in the last one year? I am sure you would be measuring that score. Is Mr. Negi there? Yeah. Karthik, is Mr. Negi there? No, Mr. Negi is not there. Oh, Mr. Negi is not there. Mr. Rishik with us. Karthik, you can answer this, you or Varun. Otherwise, I will answer. Sir, the customer satisfaction survey is being done. The score is above 90%, and it has improved over last year. With regard to- Yes. This is actually monitored every week on Monday. So the customer satisfaction score as well as pending calls, these two things are actually monitored by the Director in charge of service, Mr. Negi, every Monday morning. Got it. And we have seen improvement. This point on selling, it has come out before, and we are seeing how to do this in other ways. For example, now we are also working on selling can be done whilst we do digital marketing and all to basically the customer. A lot of the delivery can be done by third parties, thereby reducing the strain on the service people to sell. And therefore, we have increased sales of our detergents and all via Blinkit, et cetera. We have done that. Okay. Got it. Sir, I think last time you mentioned that we are trying to improve our sales saliency through this cashback mechanism because many of our competitors have tied up with several credit card companies. My question to you is that, what percentage of our sales happen through these EMI kind of options and what percentage goes through this cashback? Because the feedback I have received is that our tie-ups are not very strong, therefore, in some fringes we lose our market shares. Karthik? Yeah. In this current season, Diwali season, our cashbacks and schemes have been very competitive in line with the competition. For the industry and also for IFB, the attachment for cashbacks, consumer finance is up 40% to 50%. Further, I said in last conference also that we are into product sales. The competition, where you are just now saying we have higher cashbacks, is not the right approach. We sell our products on features and benefits, not on cashbacks. That is something how we differentiate ourselves. Thank you. Got it. Sir, on the fine blanking division, can you just help me understand what is the industry mix which we cater to? In the last call you mentioned that there is a growth plan you actually have in research. Organically, how do you intend to grow that particular business? I am just talking purely organic growth in the fine blanking division and the industry split which we have now. I think organically any business should grow. I mean, we have enough within to grow by 20%, I think. 17%-20%. Okay. We need marketing to do a better job. In the case of stamping, however, because we are very small in stamping. We are doing about 8 CR a month. When we add capacity, either in the existing plant in Bangalore or a new greenfield in Gujarat, this can of course grow by many more times. Whilst I spoke about Gujarat greenfield, we are also looking at setting up a plant close to Maruti and Hero, close to Manesar. Two facilities to come up, one in Gujarat and one close to Manesar is what we are thinking of. Therefore, this business from INR 8 crores a month, we will significantly grow it. We have not put any numbers to it as yet because we have not taken it to the board as yet in terms of a number, but we expect it to be substantial. Got it. This will be finalized in the next 60 days, and we will take it to the board. Got it. Sir, I have one last question. Then we can give you this in January. Got it. Sir, how many P&L divisions we have in our company? One is, of course, the engineering division and the home appliances division. No, engineering division, the P&L is bifurcated. For example, fine blanking is one, stamping is another P&L. Okay. Motor is the third P&L. Okay. Like that we have it. The reason we have it is so that the existing management of that line of business takes responsibility end to end. Okay. How is it in terms of the consumer appliances division? In consumer thing, we have factory heads for each of the plants. P&L is one. Service P&L is separate. Got it. Meaning marketing, we have a P&L, factory we have, service we have. Ultimately, consolidation is one. Got it. as appliance business, but we look at it as three. What is the pure advertising budget we actually have for the year? How much we have spent on media advertising? If you can just give me a split of whether it is in terms of print, I mean, TV or- I do not have it with me now, but if you see how much we spend annually, it is approximately INR 100 CR-INR 120 CR, taking everything into account, including what is spent on digital. Got it. Hence, one of the things given to McKinsey was, help us to optimize this by 15%-20%. The advertising spend also? Yeah. This INR 100 CR to INR 120 CR cost that we have in marketing overall, we have asked them to help us to optimize this. Got it. By 15%-20%. Sir, in terms of the customer sales representative or the CSRs which we have Yeah how have you increased in the last six months over the previous six months? Because one feedback which I hear from the market is that our variable structure to the CSRs has to improve, and just because of it, there are some attrition also. Can you just help me understand that bit, sir? Yes. I think our major thing is we actually continuously benchmark. One of the points that have come out in the benchmarking, which is what you are also quoting, is the difference in the variable pay structure between us and others. Yep. Namely, like the bigger guys. Yeah. That is because the bigger guys are working on a structure which is suitable for them, which we don't think is suitable for us, but we are re-looking into it. Whilst re-looking into it, we have found some anomalies in our existing structure. For example, in our existing structure, let us say that we pay a person has to do a minimum of 20 before they earn incentive. Okay? Okay. Whereas others talk about 30, for example. Okay. But the others have a slightly higher fixed as a result of that. Okay. Our thing is that when you look at the 20, the 20 cannot be looked at flat because every single counter has a different throughput. Meaning, if a counter, if total sales is, say, 200 numbers from that counter across brands. Okay. Okay? And then you say, okay, your target is only 20. Then we are doing lesser than the requirement. Got it. In terms of market share in that counter. Similarly, in some counters, suppose the throughput is only going to be maximum of 18- or maximum of 15, maybe asking for 20 is also unfair. You understood? Correct that counter by counter proper planning is not there. Having said that, as far as the CSR goes, whose average wage is, let's say, anything between INR 15,000-INR 17,000, INR 18,000, depending on the city, I think we need to rationalize the structure and the incentive depending on the city rather than a flat all India. Got it. Meaning the structure for Bombay cannot be the same as the structure for Amritsar. Got it. I think this rework is taking place. It will be done by November 15, 16, and the new thing will be rolled out. How much we have increased our CSR people in the last six months over previous six months? I think we have increased by about 600 numbers. 600 numbers. On a base of 4,000, right? Something like 600 to 700 numbers. Correct, Ranjan Mathur, what's the- 700 we have increased, and our current- Of CSRs is 5,300 across countries. Thanks. Yeah. Sir, given the kind of complicated things which you actually just mentioned, how are we structured in terms of our information systems, right from the factory to the primary sale to the secondary sale? How do we track it so that the right product positioning happens, the right CSR is actually put. How have you improved our Yeah. I think this overall thing of connecting right up to the end in real-time, we have some issues here. We are working on this. We are working on this, and I think these are one of the points where we may need external help. Sir, right now you have multiple plants. All of them are in the same information system that what you are buying in Goa versus what you are buying in other place. Do we have the visibility in terms of whether the materials are correctly procured at the right price and right inventory? Is that unified now from an information system point of view? From an information system point of view, it is there, but may not be used effectively, as effectively as it can be used. Is the information there in the system? The answer is yes. Is the information used effectively? Maybe not 100%. But to your question, is the information there? Answer is yes. What we've done now is supply chain across the board has become one in terms of buying. We put one person basically in charge. We put a committee in charge of price increase to be given to suppliers, et cetera. A lot more control has been brought in, and that is giving us benefits. Got it, sir. Thank you so much for answering all my questions. Thank you. Thank you. The next question comes from the line of Shreyansh Jain from Swan Investments. Please go ahead. Hello, am I audible? Yes, please. Hi. Thanks for the opportunity, sir. My first question is, when I actually break your P&L other expenses up, and I am talking about FY 2025, I have got these numbers from the annual report. There is this cost called ancillary cost, which has actually doubled in the last five years. Can you just throw some light there? INR 140 crores of ancillary cost. What are these costs exactly, sir? You are talking about the engineering division? No, I am talking about the overall consolidated profit and loss account of IFB Industries. Sir, I am answering this. Pravindra, ancillary is only engineering, no? No, ancillary is there in home appliance division also. I am answering this question. For my knowledge, what is ancillary in home appliance? Why don't you answer me? What is ancillary in home appliance? Apprentice allowance. Which? Apprentice allowance, which was grouped earlier under employee cost, now it has been regrouped under ancillary cost in P&L. The cost looks higher as compared to last year. Whatever he is saying is correct. There is an additional impact of INR 4.5 crores in the quarter and around INR 9 crores for the YTD period. Otherwise, there is no such additional impact in ancillary cost. Sorry, sir. If I am getting this right, this is employee cost, is it? INR 140 crores of employee cost. No, this cost is pertaining actually to apprentice. We have many apprentices in the appliance factory who are actually- Pravindra, please understand what he is saying. Ancillary cost of INR 140 crores cannot be apprentice. No, I am not telling that. See, in the IFB Industries P&L, GCR for the quarter, ancillary cost is INR 14 crore as compared to INR 9 crore. No, I am saying the full year. Full year 2025, sir, last year. I want to understand the expense head broadly. For last year. Yeah, for last year it was INR 140 crore. This year INR 140 crores has become It was INR 70 crores in FY 2021. It has doubled in the last five years, whereas our home appliance division and all divisions put together, our revenues have not compounded at the rate that this expense has compounded. I am telling you. If you talk about 2024, 2025, INR 140 crores, out of that approximately 78%-80% is pertaining to our engineering division. Engineering division, they are doing many ancillary jobs which are happening inside the factory, which are going outside the factory, that are being grouped under ancillary cost. In addition to that, home appliance division also is having ancillary cost, which is around 18%-20% of the total ancillary cost of the company. Okay. My second question related to the same thing. When I just break this other expenses, INR 1,250 crores of total expenses. If you look at the five largest expense heads, one is consumption of stores and spare parts, the other is freight, octroi, carriage, the other is ancillary cost, and the fourth is advertisement, sales promotion of INR 285 crores. As per my understanding, all these four large cost heads are largely variable in nature. As you increase your business, you will need a lot of these things, right? I am just trying to understand, when you talk about INR 120 crores of cost savings, which will come from other expenses, which line item are we actually targeting or are we looking at getting the most out of? Regarding the material cost reduction, whatever we are talking about for last one hour, many shareholders. The material cost is 60%-80%, right? One minute. I am just coming. Suppose you are talking about consumption of stores and spares under other expenditure. Correct? Consumption of stores and spares, though it is appearing under other expenditure in Schedule III, but it is clubbed under material cost only when we are combining the P&L. Understood? This is point one. Ancillary cost, I have already explained. The next cost is sales promotion expenditure, which we have discussed about five minutes back, where CSR expenditure and normal promotion expenditure are clubbed. Apart from that, another head is CSR expenditure, that is also a big amount, but it is coming under promotion cost only. Is it clear to you now? Sir, it is not very clear. Or you can- We request you to, if we can take this offline, somebody from the team- Yes, you can come back to me offline. I will explain to you. Yes. And sir, the other question is, you know, we- No, Kartik. Sorry. Can I just interject you? Because I like this point, Kartik. Yes, sir. Kartik. Yes, sir. Out of the 200, whatever he is saying, 250 odd or 280 odd, as far as I know, marketing cost is 120. That is what we have given to McKinsey. Yes. Now, CSR cost is about INR 14, INR 15 a month, or INR 13 to INR 15 a month, correct? Yes. Soumitra was saying that is added to marketing cost, correct? And hence it becomes INR 280. Am I right in assuming that? Yes. Okay. If the question of CSR, it is an issue of getting the productivity up, which is what we have been debating for the last few days. So that is a separate exercise, and you must put some numbers around it. So how much should we get out of that exercise? Kartik. Yes, sir. We are working. Have you understood what he has said? Yes, sir. No, first you understand the question. His question is a correct question. On the CSR part, what is the productivity improvement, et cetera, you are expecting, and there must be some numbers. Like in cost reduction of material, we are working on some numbers. Kartik, please answer yes or no. Yes, sir. So during the But you have no numbers for CSR. Yes. So during the fixed cost reduction project, we will assign targets. I don't want fixed cost reduction in CSR. I want productivity improvement in CSR. Yes, sir. And you understand what I said, Kartik? Kartik, you can speak about whatever we discussed yesterday evening. Kartik, please. Soumitra, please don't interject when I'm talking. Kartik, have you understood what I'm saying? What am I saying? Yes, I understood it. What you have said is CSR is not a fixed cost reduction exercise. We need to work on productivity improvement, and we have to set a target of productivity improvement. Yes, like what you say, do we need to improve the structure, et cetera? The point is a correct point. We have been discussing this for the past few days. Put some numbers to it. Okay. Okay. Like we have done for material cost. We are saying material cost, we will get, let's say, 80 odd crores or whatever. Now it is here. Put some numbers to CSR. What will we get out of this restructuring? Understood, sir. For each of the points, the other points that he is raising also, those four or five headline items, you put some numbers to each one of them. The point is a correct point. Yes, sir. My last question is, when we talk about INR 100 crore-INR 120 crore of pure advertisement expenses, can you help us understand how much of this is above the line and how much of this is below the line? Why I am asking this is, sir, when we did our channel checks, a large part of the MBO guys we met, their feedback is, IFB as a product is top-notch. There is no question on that. But what the feedback was is, none of the customers actually who come in, they actually know what the product delivers, how superior is the product. So they said the customer awareness is very low. Yes. We are working on a campaign with O&M for awareness building. That campaign will come out soon. It is delayed. We have not come out because the right idea we have not been able to strategize on, but that work is going on. This cost includes a lot of digital cost also. INR 120 crore includes a lot of digital costs. We can give you the breakup. But the ATL as you are talking about in print, that is minimum. That point is a correct point. But we are relooking at this, and therefore that optimization and then recasting that and deciding on which media, how much to put in, that whole work is being worked out with O&M as well as the media buying agency, which is Initiative Media. Okay. Do we expect some ramp-up in that expense head, INR 100 crore, INR 120 crore? No, we don't expect ramp-up just blindly. We first expect McKinsey to help us with some rationalization, and we expect EBITDA improvement to happen before ramp-up happens. Okay. My last question is, if I just dial back to the last quarter, where our top load and front load, front load specifically, which is our major part of the washing machines, that did not do well. I think last quarter, we were targeting 15%-20% kind of growth rates. In that light, when we have done 14% this quarter, how do you look at this number? Are you internally happy with this, or do you think there was room for a 5%-6% kind of growth rate more? I am just trying to understand. There was room for further improvement. In some of the states where the management is not good in that state, changes are being made. To answer your question, yes, we were not happy because in pockets where management is weak, we have had issues. Okay. Would we have gained any market share? Yes, I think we have gained market share. Okay. All right. Thanks. Thanks a lot. This helps, sir. All the best. Thank you. Thank you. As there are no further questions, I would like to now hand the conference over to management for closing comments. Thank you very much to everybody for participating in this call. We will meet again after quarter three. Thank you very much. Thank you. Thank you, sir. This brings the conference call to an end. On behalf of Nirmal Bang, we thank you all for joining us. You may now disconnect your lines. Thank you again. Thank you.