Q1 25/26

Aug 6, 2025

Summary

Q1 revenue grew 5.33%, but EBITDA and PAT declined amid material inflation, monsoon disruption and higher operating costs. Management expects recurring cost savings and double-digit EBITDA in FY26, with cost reductions beginning to flow through from Q2–Q3.

Ladies and gentlemen, good day and welcome to IFB Industries Limited Q1 FY26 earnings conference call hosted by Nirmal Bang Equities Private Limited. This conference may contain certain forward-looking statements about the company, which are based on beliefs, opinions and the expectations of the company as on the date of this call. These statements are not the guarantees of the future performance and involve risks and uncertainties that are difficult to predict. 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 the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Ms. Arshia Khosla from Nirmal Bang Equities Private Limited. Thank you and over to you, ma'am. Thank you, Shruti. I, Arshia Khosla, on behalf of Nirmal Bang Institutional Equities, welcome all of you to first quarter FY26 earnings conference call of IFB Industries Limited. From the management today, we have Mr. Bikramjit Nag, Chairman, Mr. Soumitra Goswami, CFO, Mr. P. H. Narayanan, MD, Engineering Division, Mr. C. S. Govindaraj, ED, Manufacturing of Home Appliances Division, Mr. Jayanta Chanda, CFO of Engineering Division, Mr. Kartik, Head Finance and Accounts, Home Appliances Division, 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 first quarter FY2025-26. I have with me Mr. Bikramjit Nag, Chairman of IFB Industries Limited, Mr. P. H. Narayanan, Managing Director and Chief Executive of our engineering- Soumitra, she just said all that, you can just get onto the call. She just said all of it. Okay. Now I will inform you about quarter 1 result. Revenue for the quarter was INR 1,310.82 crore against last year's INR 1,244.44 crore, which is a growth of 5.33%. EBITDA for the period was INR 69.95 crore and its percentage to revenue was 5.34% as compared to last year's INR 86.55 crore, which was 6.95% on revenue. Fixed expenses for the quarter was within budget. However, in case of some expenditure heads, expenditure had crossed the last year's expenditure. PBT for the period was INR 33.96 crore against last year's figure of INR 52.40 crore. Quarter 1 PAT was INR 25.36 crore, which is 1.93% on revenue against last year's INR 38.84 crore, which was 3.12% on revenue. With this, I will request to start the question and answer session. Hello, you can start the question and answer session. Hi. This is Bikram Nag here. Just one point, please, before we start the Q&A. If you see the results, there is increase in fixed cost as well as some in material cost. Kartik and Mr. C. S. Govindaraj and all will explain exactly why and the remedial measures which are being taken. And Mr. Mathur will explain the issues on sales, especially related to AC due to monsoons, et cetera, early onset of monsoon, et cetera, and us not getting the required sales in washer, which has caused margin issues and remedial steps to be taken in Q2, which are underway. Okay, please start. And Kartik, you will answer most of the questions, but I'm here. Thank you. Thank you very much. We will now begin Hello? Hello? Sir, we are here, but I think there is some problem at their end. Can you hear us? We can't hear. What is the problem? Madam, we cannot hear anything. We have given our opening remarks. Mr. Nag also has spoken after that. Yes, sir. We heard that. Just give me a second. Callers team, there is an issue. Are you able to hear me? Yes. Yes. Okay. Thank you. Should we begin with the question and answer session? Yes. We have said it twice. Please do start with the Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Lakshminarayanan from Tunga Investments. Please proceed. Thank you. If I just look at your advertising expenses, it is almost INR 285 crores or thereabout, right? In addition to it, we also have the sales representative cost of around INR 126 crores or so for the last financial year. If I put this in context of the other companies like Voltas, Blue Star, Whirlpool, et cetera, our advertising expenses is far high for the proportion of the sales they actually do. I just want to understand, is there an opportunity to actually balance between the 4,000 odd people you have as sales representatives at the counters versus, is there an opportunity to kind of reduce the advertising spend? Are we getting the right return on advertising budgets? That is my first question. What I have understood is you wanted to know why our cost of ad and promo is more compared to Voltas and other companies. Yes, sir. Yep. Let me first of all tell you that in our ad and promo, the CSR cost is also included, which majority of the companies don't include in their ad. Point number two- Ranjan, first please give your name so that they know you are answering the question. Right. I am Ranjan Mathur. I will be replying to this. What I explain you is, in case of- we take CSR cost for ad and promo expense. That is why it appears that- No, your CSR expenditure is also called out separately as other expense in the other expenses. That is on a separate line item. I did not understand that. Sorry. Mr. Kartik here from finance. What Mr. Mathur means is customer sales representative, the person who is there on the counter. Our ad- Okay and promo cost, that cost as well. There is definitely opportunity to optimize the ad and promo cost. Okay. That is something which you say- Kartik, please give them clarity. Advertising cost is not INR 250 crores. Yes. Our ad and promo cost annually is around INR 100 crores. We are working on reducing the ad and promo, optimizing the ad and promo cost by increasing the visibility with the same spend. We are also evaluating working with partners to help us how to reduce the cost and optimize the benefit from this. Got it. So there is an expense of around INR 126 crores paid towards IFB Appliances, right? So that is your promo cost, right? The CSR cost you are mentioning. Yeah. Yes, correct. So 284 minus 126, that is still around INR 160 crores of advertisement spends. No, our advertising spend purely is INR 100 crores. Because apart from IFB Appliances, we have another agency who also provides us customer sales representative. So if we remove that cost, then our annual cost will be around INR 100 crores on ad spend. So how many customer sales representative? Give the other party's name, Kartik. The party's name is Genius. What is the total number of customer sales representatives you have on counters? Currently, we have 4,000 odd customer sales representatives across country. Okay. IFB Appliances itself has 4,000 people, so Genius is that plus this, right? Plus, yeah. What is the total number, Ranjan? Answer the question. The total number will be around 4,600 odd. 600 are on Genius rolls. Got it, sir. Thank you. I will get back into you. Soumitra, can you please give clarity? What is the advertising cost exactly? Yes. Actually, for the quarter, we are talking about first quarter. First quarter sales promotion expenditure was INR 30 crores against last year, INR 28 crores, which have increased by INR 2 crore only. That is due to increase in in-shop branding in the dealer counter. Point one. Point two, CSR costs have increased from Out of the INR 30 crores, how much is advertising? Sir, this is the full amount of advertisement. INR 30 crore is advertisement and sales promo cost for the first quarter against INR 28 crore. Kartik, how much is advertising only? Yes, sir. We will work out and. Yes, sir. We will work out and give it, sir. Give it now. Bring it. You can't give answers which are. Carry on. Next. We will give you this answer. Just give us five odd minutes, please. Carry on, please. The next question. The next question is from the line of Naved from Bastion Asset Management. Please proceed. Yeah. Am I audible? Yes, hello. Yes. Thank you for the opportunity. So sir, if I look at our gross margins for the quarter, and if I compare our gross margin with the same quarter last year versus the previous quarter as well, I can see some healthy improvement. Is this a correct understanding that the project which we have taken up with Alvarez & Marsal, which is our consultant, that has started to pay off? Is it the improvement you are looking for? Yes. Kartik here. Yes. The project with Alvarez & Marsal started from 15th Feb. In quarter 1, we have got a reduction of around INR 3.5 crores due to this project. But when you compare with quarter 1 of last year versus quarter 1 of this year, there is a slight dip in the gross margin. This is mainly because compared to quarter 1 of last year, there is an increase in commodity prices, which is mainly in copper, GP, ES, and there is an INR depreciation against US dollar, which is around 3%. But this has been mostly offset because of the cost innovation, whatever has been done. The net impact is that the material cost has increased by 65 basis points with respect to last year, quarter 1. So Kartik Ji, just to clarify, I may be wrong there. The numbers which I have done in Q1 FY 2025, the gross margins are about 38%, and in Q1 FY 2026, that is this quarter, I can see gross margin almost touching 40%. So I have 160 basis point improvement there. This is encouraging to see. Therefore, the question which I wanted to understand is the improvement I am seeing, is the improvement sustainable, and can we consider 40% gross margin as a steady state number as we move forward from here? Sir, are you referring to the appliance division gross margin or the company-level gross margin? No, no. Company-level gross margin. Kartik, company-level gross margin is mostly driven by Home Appliances Division. Yeah. Then I will talk separately because the margins are not at 40%. I will connect with you separately to give more details on this. Sure. Regarding the other operating expenses, there is a sharp increase of around 23% on a YOY basis. I just wanted to understand what the factors are that are driving this high increase because our revenues just increased by 4% to 5%. Yeah. As far as operating expense is concerned, as we explained earlier, customer sales representative cost has gone up. This is because we have added 680 numbers of CSR compared to last year. Second, our professional cost has gone up due to engagement with A&M. The third point is E-waste compliance cost and salary cost also has marginally gone up. These four together have increased the cost. Sure. That's it for my side. Thank you and all the best. Thank you. The next question is from the line of Lakshmi Narayanan from Sundaram Investments. Please proceed. Kartik, I wanted to understand what is the total capacity for front loaders and top loaders and refrigerators across our plants, and what kind of utilization we are actually aiming at for this year. Okay. This is Govindaraj here. As far as the front loader is concerned, we can make about 85,000 washing machines in a month, and we will be touching about 95%-100% capacity in the season ahead. Both in August and September and October, we should be able to touch 95%-100%. As far as AC is concerned, we can make about 65,000 as of today. The peak, whatever we have touched in the month of March and April was we have touched about 100% utilization. As far as- Okay As far as the refrigerator is concerned, the plant has been built up over for 1 million capacity. The peak we have touched is about 50,000. That is about 50% utilization. In the season ahead, we will be able to touch about 60%-65% utilization. All right. Okay. These ACs you mentioned is per month, I think, right? Yeah, per month. Yeah. Washing machine, what is the split between front loaders and top loaders, sir? Can you just explain that? We have a separate line for front loader. We are now going to touch about 85,000 in September and October. In top loaders, we have a capacity of making about 60,000. I think in the month of September, we will be doing about 55,000. So about 90% utilization. Got it. Sir, the second thing is that when I actually look at some of your products, I see that the tie-ups with some of the credit cards which you have is comparatively less when compared to the tie-ups which some of the other brands have. Have you looked at it in terms of again reworking or revisiting this particular thing in terms of sales? How much that would actually shave off your profits also. If you think there is a subvention, something which you need to give, et cetera. Can you just touch upon your tie-ups with credit cards on at least the sort of products you said? Yes. We are working on this. As you said, we are strengthening our team on consumer finance and affordability so that our cost has to further go down. At the same time, affordability to a customer has to go up, and that is a sellout for IFB, which will help us to increase our sales. Okay. Now, will it hamper our gross margin because of this? Look, this is Ranjan Mathur. In our case, what we see is we are in a business of selling products rather than selling cash discounts, which is the trend in the market. So what we do here is, we give our products at a right price and then give support in terms of cash discount. But that cash discount, what other brands do is they raise the price and then they give cash discount and burn money. So the impact, our piece in terms of cash discount will not be that much as the other brands will have. Got it. The third question which I have is that in terms of our services outreach, what kind of services network we have, after-sales network, and whether it is run on a franchise mode or on a company-owned, and how you have strengthened in the last one year? Our service is basically on the franchisee mode. But the network is varied from PAN India, right from J&K to Kanyakumari. The network is really good and our aim is to provide service within four hours of the complaint registered, and that is what we all are driving. How many you have now? How much was it last year? Just give me a minute. I will give you the exact figure. I think it is about 1,400, if I am not mistaken, but just check. I will give you the right. That figure is 1,530 franchisees. Sorry, sir? 1,530 franchisees. Okay. They are all different franchisees, I believe, right? Every franchisee is different. There is not one group or two, couple of groups. No, we do not entertain that. Got it. Thank you, sir. I will get back into you. Thank you. Kartik also, please look into this point. The franchisees are covering how many pin codes? Yes, sir. Mm-hmm. Franchisees are covering how many pin codes in how much time? How many pin codes in 2 hours, how many in 3 hours, how many in 4 hours, and like that. Can you please differentiate it and come up with this? Another time. Yes. Thank you. The next question is on the line of Shreyans Jain from Swan Investments. Please proceed. Hello, am I audible? Yes, sir. Sir, my first question is, sir, I am just looking at your refrigeration ramp-up. So somewhere in the presentation we have written we have done about 118,000 units for this quarter. And on page 8 of this presentation, we have said that we are doing about 18,000 a month in refrigerators. So 54,000. So I am just trying to understand the differential is all OEM sales or all ref sales are branded sales? So there is another company which we have, IFB Refrigeration. So INR 18,000 is for IFB IEF. Kartik, why don't you explain properly, Kartik? Yes, sir. It's a very simple thing. Explain it. Yes, sir. Sir, 118,000 is the total refrigerator manufactured and sold by IFB Refrigeration Limited, where IFB Industries is holding 40% stake. Out of that, IFB Industries is selling approximately 18,000 per month. The difference is OEM sales, sir? The difference is OEM- No. Sumit sir here. I am just telling you clearly. 118,161 is the figure of IFB Refrigeration Limited, and that is around 39,000, around 40,000 per month. IFB Industries is selling, has sold 54,000. That is actually 18,000 per month. Is it clear? No, sir. Not able to actually understand. IFB Refrigeration Limited is a separate company, right? We are having a shareholding there of 41%, correct? IFB Refrigeration is directly selling to dealers, distributors, through branches, and they are giving some material to IFB Industries also. IFB Industries is billing to their dealer and distributor. Whatever sales is happening from IFB Industries Limited, that is 18,000 per month. In case of IFB Refrigeration, it is 40,000 per month. It is not the question of balance quantity pertaining to OEM production. The structure is really confusing. It's not. It's not confusing. It's not confusing. IFB Refrigeration Limited is a separate company. Clear? Is that point clear to you? IFB Refrigeration Limited is a separate company. Is that point clear? Yes, sir. Okay. IFB Refrigeration Limited has sold 18,000 per month to IFB Industries Limited. Clear? Clear. Now, suppose IFB Refrigeration Limited is hypothetically producing 50,000 a month. 18,000 were becha to IFB Industries Limited or balance, suppose hypothetically, 30,000 becha under IFB Refrigeration Limited in different states where IFB Industries Limited is not selling it. You understood? Right. And 2,000 went into stock. That's the hisab of 50,000 produced. Clear? Got it. And sir, the INR 66 crores of revenue in quarter one is just IFB Industries revenue for 54,000 units, right? Yes. Correct. Okay. Are we trying to say that we have two distributors, two separate distribution teams, one in IFB Refrigeration and one in IFB Industries for refrigerators? IFB Industries sells refrigerators in certain states. Hypothetically, let us say, IFB Refrigeration is selling in Maharashtra. IFB Industries does not sell in Maharashtra. Clear? Okay. So IFB Refrigeration has some people to sell it in Maharashtra. Correct. Got it. Sir, the second question is, what would have been the volumes for us in air conditioners for quarter 1 versus last year? Yeah. Kartik, you can answer that. Yeah. During the quarter, we have sold 115,000 air conditioners against last year, 129,000. As far as OEM is concerned, we have sold 9,800 air conditioner versus last year, 6,600. You tell total, Kartik. 120,000 this year, first quarter, against last year, corresponding quarter, 137,000. Yes. It will be easier for them to understand. Sir, my last question is, what is the kind of cost savings we envisage in Q2 and Q3? I think in the presentation, we tried to mention that, but I think somehow got missed. So what is the kind of cost savings that we, because a little bigger impact expected in Q2. Kartik, you can reply. We discussed this today. Yeah. This is Govindaraj here. I will explain. The quarter 2 innovation, what we are expecting is, it will be to the tune of maybe about INR 15 crores-INR 20 crores, and we are in line with the target, whatever we have taken for the fiscal year. Okay. That run rate should ideally be continuing for the balance three quarters. Yeah, it will continue, and it should improve on. Okay. So that we are in line with the yearly target, whatever we have taken. Got it. Thanks, and all the best. Have a good afternoon. Thank you. Thank you. The next question is from the line of Sai Kiran Pulavarthi from Pulavarthi Advisors. Please proceed. Yeah, hi. Thanks a lot for taking my question. Just a broad level question is that in terms of the market share, except for the washing machines, you are not material enough in the rest of the segments, in the larger ones like refrigerator or AC. How do you look at yourself in a very highly competitive industry when your market shares are very less? How can you able to improve your margins sustainably and also have very good return ratios? Thank you. This is Ranjan Mathur. First of all, along with washers, we have good market share in our microwaves as well as dishwashers. We launched ACs, and last year, I shared in last meeting also, we sold 4 lakh ACs last financial year, and this year we are targeting around 4% market share. Similarly, in refrigerator, in a span of two years, we are now touching around 40,000 every month, and we are targeting around 65,000 per month, a share around 7%. But even in your presentation, you mentioned that by FY26 you want to be 5% market share in ACs, and then probably now you are seeing refrigeration at 7%. At that kind of market shares when your competition is global peers like Samsung or LG or Haier or Midea. Is it possible for you to sustainably improve the margins from where you are? Or how difficult or how challenging it is? Experience tells us that in the last five years, you guys tried a lot on the sales and improving the marketing, but still the margins are still struggling. We are just trying to understand where the challenge is. Is it subscale or is it because of something else? Or where is the issue? We as investors outside think that this is primarily because of probably the lower market share is not giving enough of pricing power. That's our assessment. Is our assessment right or is it something else to think about? No, look, in this, I will only say one thing. In terms of air conditioners, the responses which we got in the category in last financial, last one and a half years have been very good. This year also, if you see despite of a major drop in the industry, we were able to sustain our volumes. Same thing is with refrigerator. In a span of two years, we are practically touching 4%. Our biggest strength is our network. We are working on improving our range. Ranjan, his question is not that. Please answer when people ask you all a question. One problem with all of you is you do not answer the question. Answer the question. If you do not understand the question, you ask him again to repeat the question. He has asked a very clear and factual question. Can you please repeat the question, please? My question is that except for the washers, you do not have a substantial market share in any of the products, and this industry is extremely competitive. With what I can say single-digit market shares like 5% or 6%, will you be able to have pricing power or not? If not, then can this be impacting your subscale, what I can say, EBITDA margins, which was there for quite some time. Is it the right way to think about it or is it something else or rather which we should think about? As I was telling you, our market share in microwaves, our market share in dishwashers, our market share in cloth dryers are substantially at a good position along with our washers. Top loaders, which have after the launch of the new range we shared, the market share have started improving. With regard to AC and ref, as I just now shared, now the question which you are asking whether we will be able to sustain the margins and pricing. In IFB we firmly believe that we should give a good technology product, and that product give us good sustainable volumes. That is how we are- Sir, that is not his question. Kartik, can you answer the question? Ranjan, first you hear the question well and answer the question. Please don't make up stories for the public. This is not a marketing meeting. Sir, pricing power is not coming from the market share. If we see the new products, what we have launched also, our market share is only going up. In front-loading washing machine, we are number one as far as the customer selling price is concerned. We have features and we give value for what price we are charging. In air conditioner, as you know, it is a crowded market. There are more than 40 brands operating. If you look from the price point, we are in top 10. So lower market share doesn't mean that our price point is discounted. So margins will not get impacted because of market share. Also in air conditioner, if you see, the market leader has around 20% market share. So 4%-5% market share is a good market share to start with, which ultimately we want to further increase. All right, sir. Thank you very much. Thank you. Really appreciate. Bye. Thank you. The next question is from the line of Udit Sehgal from FinpointX Capital. Please proceed. Yeah, good afternoon, sir. Regarding the cost-down measures, in the last concall we had discussed that INR 200 crores we are targeting from the material cost reduction, around INR 75 crores from the fixed cost reduction and INR 20 crores from the warehousing and freight reductions. I wanted to know, sir, what's the timeline on that and from when do we start to see these savings kicking in? Yeah. This is Govindaraj here. We had already indicated that out of the INR 200 crores planned, approximately about INR 85 crores we will get in the fiscal year 2026, and we are on track of that. We will be able to achieve that INR 85 crores. Okay. Like you said, that some part of it was available in Q1, but it was offset by the increase in material cost. Could that happen in the future as well? Our estimate for the Q2 commodity price increase is not as high as what happened in Q1. We should be able to get substantial benefit from the cost innovation activities, whatever we are doing in Q2. Mr. Govindaraj, please also inform them what we did not do in Q1, which had led to this. Why don't you and Kartik give them visibility? What did we do wrong? Even though we could achieve about, in terms of 1.6% cost innovation, the commodity price increase happened more than that, so that there was a net increase in the material cost, which could have happened. Our cost innovation should more, so that the impact of the commodity, we should have been able to absorb. Point number one. Point number two, the realization took some time, which would have happened in Q1, has moved to Q2 because of the validation we had to complete. No, Kartik, there is another point. Yeah. What did we do wrong? Yeah. Apart from that, overhead cost has gone up. What did we do wrong on commodity pricing? Yeah. Okay. We have now- See, Mr. Govindaraj, you should be able to explain. You are the manufacturing director. What did we do wrong, you should transparently say. On the commodity. Sir, what we could have done better is the control on the commodity pricing through a price committee regular follow-up and the why the commodity price is and what measures we can take to mitigate. That we do it properly. We have now corrected. Okay. So if I understand correctly, sir, for FY 2026, we get around INR 70 crores-INR 80 crores from the material cost saving, and for next year, FY 2027, we will get the full INR 200 crores for the material cost saving. That's my understanding, correct? Okay, sir. Yes, yes, that's correct. Okay. Secondly, No, that is not correct. That is not correct. Total is INR 200 crore, I think. Correct? Correct, sir. Out of that, out of INR 200 crore, this year you are supposed to get 60 to 80. So balance will be only 120, for example. No, the total we will get 200. Yes. So 120 plus 80 is 200. So this is like a one-time saving, or it is like a recurring saving since we have re-engineered the products. Mr. Govindaraj, am I right or wrong? That is right, sir. The savings are recurring only, and based on the target of overall 200, the realization will be about INR 60 crores-INR 80 crores in this fiscal year. The remaining we will get in It is recurring only. So ultimately, okay, the recurring part will be around INR 120 crores, or it will be INR 200 crores? The recurring part. The recurring part will be about INR 120 crores. Okay. With respect to the fixed cost that we talked about, that we will be reducing around INR 6 crores per month and the warehousing and logistics cost, what is the visibility on that? Yeah. Kartik here. We have put in place a team for this along with Alvarez & Marsal. We have identified areas of overhead cost reduction, and we are setting internal targets for this. So if you say freight, in case of freight, we have done trial on network optimization for Bangalore. The project is complete. Now we are rolling out pan-India. So we expect that the savings will start coming in from Q3 of FY2026. Okay. Regarding the fixed expenses, sir, is there any visibility on that? Yes, yes. This is for fixed expenses also. The same team is going to work on. From Q3, we expect the savings to come in the P&L. Okay, sir. Sir, if we look at the year-on-year sales, the sales have increased, but the margin has gone down. That is because of the material cost increase or some other reason? Yes. Okay. That should normalize going ahead since the cost savings will also kick in. Yeah. As we explained, cost savings are in the pipeline. Validations may take some time, but we expect INR 60 crore-INR 80 crore to come in P&L in FY26. At the same time, we have put in a team for a pricing committee, which will look into commodities. And find ways to reduce the commodity price. We expect commodity price on future quarters to be much lower, or we expect a reduction in all this to add to P&L. Okay. Because our eventual target is to reach 10% EBITDA margin is what we have been targeting. With these cost savings, do you think in the next two or three years we can achieve that? Our intent is to hit double-digit EBITDA in this financial year. In this. Oh, so that would be for the whole year, or that would be on the exit? Yeah. The first quarter we could not do, but we are working towards double-digit EBITDA. Okay. On a full year basis. Okay. Excellent. Great, sir. Thank you. That is it from my side. Thank you. The next question is from the line of Naveen Nair from Vama Asset Management. Please proceed. Yeah. Thank you for the opportunity. My question is on the engineering division. What kind of growth are we seeing for the next couple of years, and what segment of the engineering division will drive that growth? Mr. Narayanan, can you take this question? Yeah. Narayan here. Actually, we are now looking at almost 3x growth, and we are also having fine blanking, we are also having stamping. So we are now trying to improve both in fine blanking as well as stamping. We are also having plans. This year we are looking at a growth of around 20%. The next two years, we are looking at around 30% growth. Okay. For which we are also working other than automotive, other customers also. Mr. Narayanan. Mr. Narayanan, he asked a question. Yes, sir. You started off by saying 3x growth, and then you said 20% and 30%. Does that add up to 3x? I am just asking. You are from Sundaram Clayton. That is how you are answering a question. JC, can you answer? JC, can you answer? Yeah. Can you answer? It is okay. If you can just throw some light on what- No, no. One second, one second. Jayanta, are you there? Mr. Nair, I just got cut off. I just joined, Mr. Nair. Can you please answer the question? I did not hear the question, please. Can somebody repeat the question, please? Mr. Narayan said 3x growth you are planning, and then said you will do 20% this year, and 30%/30%. Does 20, 30 add up to 3x? No, it does not. Okay. What is your plan? The plan is that we have to grow organically, minimum 30% per annum. We also have to grow through inorganic acquisition route, which we are actively pursuing. We have already seen 48 companies, and due diligence have been done for many. Apart from that, we are also working on some breakthrough projects, like which are new lines. For example, brake disc line, et cetera. We are working on these, which will give us additional revenues using the fine blanking methodology, basically. Okay. If you see our margins, our margins had been- Can I just take that? Sorry. I will just say, Jayanta, try again. It is important to learn how to present matters, huh? You and the CEO both. There is a division, fine blanking division. What is your plan for that? Explain to the shareholders. What is your plan for stamping? What is your plan for Advanced Electronics Division? Why do not you go step by step? Have some water and present. Okay. Okay, Mr. Nair. Will do that. The Engineering Division basically has four verticals now. The primary vertical is the fine blanking division, which is about INR 600 crores out of- What will be the growth in that? Get to the point. We are aiming to grow it by INR 400 crores by March 2027, new orders into the pipeline. INR 445 crores by March 2027. These will come from new lines of business, which is the brake disc line, as well as we are talking to increase our sprocket business with various OEMs. We are pushing for newer businesses in the non-auto sector also with companies like ABB, et cetera. You don't have to say all that. Just explain. What are the segments you're getting into? Just explain. So automotive segment, as well as we are also now embarking into the non-automotive. With the onset of EVs, there is a thrust to keep our portfolio EV neutral so that we are certainly not out of business. So gradually we see the onset of EVs in automotive horizon. We are aligned with that. So this is in fine blanking. In stamping, our plant is in Bangalore, and it is working at full capacity. We are adding some presses in that facility there, but we are also planning a new facility in north of India, because most of the big OEMs are there, including Maruti, Hero MotoCorp, HMSI. We are planning a new greenfield facility there, and we are also talking to innovative new products, contemporary products like the battery can. For these products also, we are talking to the suppliers in Nidec and Tata Motors. We are in advanced stages of discussion, and we are hopeful of good order pipeline in the near future. We have a vertical which we call the aftermarket. That is about close to INR 100 crore. We make the chain and sprocket kits. The chains we were importing from China, the sprockets we were manufacturing in our fine blanking plant. Now, the government is imposing some restriction on imports. Our board has cleared an investment for setting up a chain manufacturing plant in India. We will do that, but our Chairman has said to get the organization right before we move ahead with the procurement of that. We are setting the organization right, which we will complete by the next 30 to 45 days. Thereafter, we are going for and we hope to put up this plant in the next 8 to 10 months. The supplier has been identified. The equipment has been shortlisted. We are in discussions with them. Very recently, we have made a foray into electronic sector. We have named this Advanced Electronics Division. We are making components for a global player, a very big player who will be the ultimate consumer. We have made a beginning, and we are quite hopeful that this business will grow substantially for us. We are also in talks with other electronic players. We want to grow this segment also. This is headed by a separate person, and we keep a fully independent vertical under the engineering division. Yeah. I just had a follow-up question on this. Your margin saw a very sharp increase in FY 2025. Do you expect this margin to kind of stay around this level? Because in the past, your margins have been volatile over the past 4 or 5 years. Do you see further improvements in margin from here on? My answer to this question is, the last two years, we have been blessed with a stable commodity price, and it has not been very. In quarter one this year, the steel prices have increased by INR 3,000. In the automotive industry, it is the standard norm that whenever there is an increase in RM input, we get it from the customer. But there is a lag of a quarter to half an year. We definitely will defend the margins that we have been doing, but our target is to improve it further. And definitely, we will do that. Thank you. That was it. Thank you. The next question is from the line of Netic, from NV Alpha Fund. Please proceed. Hi, sir. In the beginning of the call, you mentioned that expenses have increased because increase in sales representatives and increase in professional legal charges. Can you quantify these charges, which has led to increase in below gross margin expenses on a company level? Kartik here. CSR expenses has increased by around INR 7 crore for the quarter. Professional fees has increased by INR 3 crore, and E-waste expenses has increased by another INR 3 crore. Sorry, last INR 3 crore you mentioned is for E-waste? E-waste. Yes. Got it. My second question is, you briefly also mentioned about gross margins had fallen in home appliances division. Was that primarily due to increase in RM cost, or was there any other reason also? No, that was impact of commodity less recovery through cost innovation. Right. My next question is, what sort of growth do we expect in the washer segment, top load and front load individually, and in RAC this year? All three separately if you can quantify. Yeah. In case of load, the growth what we are targeting is around, initially in the financial year, we were targeting some 25% growth, but the industry in front load is a bit stagnant. We still feel that this festival season will be good and we will be able to recover our volumes, and we will be growing by around 20%-25%. In the top loader, with the launch of new range, we have been able to grow at a much higher level and have been able to gain the share. Here we anticipate around 35 odd percent growth for us, which will be better than what industry, and we will be able to gain some market share. Air conditioners you asked. In air conditioners, there was a drop of 30% plus in the industry in first quarter. First of all, our strength was we were able to sustain our volumes compared to industry. What we feel is from quarter three and quarter four, we will be able to get the volumes which we have lost in quarter one. Then we anticipate a growth of around 25%-30% in air conditioners. My last question is what sort of market share do we currently have in RAC segment? We have marginally gained. We are at around 3.5%. Okay. That is it sir. Thank you. Thank you. The next question is from the line of Lakshminarayanan from Tunga Investments. Please proceed. Yeah, thank you. Sir, you mentioned E-waste provisioning. Approximately what is the amount you would provision for the full year? Yeah, our monthly cost is around INR 2 crores. Annually that will be around INR 24 crores to INR 25 crores. Got it. The savings would be after accounting this only, right? The savings we are talking about. Yes. Got it. The second question is that in terms of our compressors, have we secured compressors for both refs and AC as we expand? Because there has always been some shortage in terms of compressor capacity in India, be it ref or be it AC. How secured we are in terms of the supply chain? Yeah. This growth stage here, we are aware of the demand supply gap in compressor, but we are already in discussing with the manufacturer, and as of today, we are secure with the quantities whatever is required for the season. Got it. Sir, can you just help me understand what is the capital structure of this IFB Refrigeration? 40% is owned by IFB Industries. What is the rest 60%? I think individuals are owning about 20 odd percent, and others in promoter group are owning significant shares. Okay. Promoter group meaning the one declared to SEBI as promoter group. They are owning shares. Okay. The rest is by the employees, you mean to say the 20%? Various individuals, yes. Okay. Is there a plan to kind of consolidate it at some point in time? Is there a Yes thought process? I think now if you look at the overall thing, IFB Refrigeration above a threshold volume makes positive EBITDA. As we have said, 55,000 to 60,000 is what we must sell to make decent amount of money. Hopefully we will get there soon, and we hope to at least consolidate it in the near term. Near term meaning maybe in the next 6 to 12 months hopefully, subject to board approval. Got it. Are we strong in DC or no-frost in the refrigerators? We now make more of DC, but the no-frost thing is increasing because we are producing more of that now. We are launching the 328-litre very soon. After that we will launch other models. Our ideal structure would have been to launch the higher end models first because that is what IFB stands for. When we were considering the project, we realized that if you do not do the lower end also, to succeed in this is going to become very difficult. Going forward, we will do more of the higher end. Got it. One last thing on washing machines. Do we still manufacture the pulley driven washing machines, or we have moved to completely motor driven? We have moved completely to BLDC. Got it. We are moving completely to BLDC. Got it, sir. Thank you so much. Thank you. Thank you. Due to time constraint, that was the last question. I now hand the conference over to the management for the closing comments. Over to you, sir. I think one of the things we have to say is, sorry, I am just going to sum up something. Performance has been relatively weak, and most of the participants have asked the question, what happened to the issue on commodity cost, et cetera. I think whilst we were working with A&M on cost down, the team that was supposed to handle commodity price, et cetera, got de-focused. Some slippages have happened there. That is an area that we need to tighten. I think that let us down. On the fixed cost increase, if you see, increments were given, et cetera, which had to be done. But areas where consolidation of work, et cetera, should have happened has not happened as fast as it should have. That is also an area of slippage. So we have slipped. AC, of course, got affected due to the monsoons, I think across brands. In other categories, in various areas, we have still not tightened and changed management where required. That work is still WIP, and we have been very slow at it. Hopefully, in this quarter, a lot of that will get fixed permanently. Soumitra, anything else? No, sir. Thank you very much to everybody for participating in this call. We will meet again after quarter 2. Thank you. Thank you. Thank you. On behalf of Nirmal Bang Equities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.