Ice Make Refrigeration Limited

Ice Make Refrigeration Limited reported a consolidated revenue of ₹111.50 crores in Q1 FY26, marking a 30.90% year-on-year growth from ₹85.23 crores in Q1 FY25. Despite this top-line growth, the company incurred a consolidated net loss of ₹1.47 crores, a significant shift from a profit of ₹3.64 crores in the prior year's quarter. The consolidated EBITDA declined to ₹4.53 crores from ₹6.13 crores, resulting in an EBITDA margin of 4.06%, primarily due to seasonal input cost fluctuations, higher finance costs, depreciation, and initial operational expenses associated with new verticals.

The company continues to focus on diversifying its revenue streams across various verticals. Cold rooms remain the largest contributor at approximately 51% of revenue, followed by commercial refrigeration at 17%. New verticals like continuous panels and commercial freezers are gaining traction, contributing 9% and 8% respectively. Exports accounted for ₹4.51 crores in Q1, representing 30% of revenue sharing. Strategic initiatives include expanding into tier 2/3 cities, doubling QSR and cloud kitchen segments, and exploring new export markets in MENA and Africa with compact refrigeration units.

Ice Make reported a robust current order book of ₹173.12 crores as of Q1 FY26, providing strong revenue visibility for the coming quarters. Key components of the order book include ₹52 crores for the Ammonia vertical, ₹33.66 crores for continuous panels, and ₹26.63 crores for cold rooms. Management expressed confidence in achieving the full-year revenue guidance of ₹650 crores and an EBITDA margin of 8-9%, anticipating that challenges related to new vertical scale-up will be addressed in upcoming quarters.

The new business verticals, including continuous panels and commercial freezers, contributed ₹18 crores to the top line in Q1 FY26. Management expects these segments to reach break-even by the end of the current financial year. Specifically, the continuous panel business is targeted to break-even at ₹80-82 crores, while the commercial freezer business is expected to break-even at ₹55 crores. These new verticals are projected to contribute over 10% EBITDA margin in the longer term and aim for a total top line of ₹150 crores this year.

Over the past five years, Ice Make has significantly optimized its working capital cycle, reducing it from 37 days to approximately 19 days. However, in Q1 FY26, inventory days increased to 70-80 days (from a normal of 60 days), and debtor days rose to 70+ days (from 60-65 days). This temporary increase is attributed to stocking for new products and market penetration efforts, particularly in the commercial freezer segment, which operates on a dealer/distributor model with standard credit terms of 30-45 days.

The company maintains its long-term target of achieving ₹1,000 crores in revenue by FY27-28, with an EBITDA margin of 10-10.5%. This growth is expected to be supported by the establishment of two new CAPEX facilities. While a ₹150 crore Phase 2 CAPEX is currently under discussion, routine maintenance and upgrade CAPEX is estimated at ₹7-8 crores annually. Management believes its installed capacity will exceed ₹1,200-1,300 crores, enabling it to compete globally by sourcing components domestically.

India's cold chain market is projected to grow at double-digit rates over the next decade, driven by rising consumption, exports, and government initiatives for food security. Despite competitive pricing pressures and an estimated 30% excess manufacturing capacity in the domestic industry, demand for refrigeration solutions remains strong across diverse sectors like dairy, food processing, e-commerce, and agriculture. The company sees good long-term prospects for the next 10 years, supported by increasing average income and demand for basic consumer products.