Ice Make Refrigeration Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Ice Make Refrigeration Limited reported a challenging Q1 FY26 with a consolidated net loss of ₹1.47 crores despite a 30.90% YoY revenue growth to ₹111.50 crores. Profitability was impacted by seasonal input costs, higher finance costs, depreciation, and initial expenses for new verticals. However, the company maintains a strong order book of ₹173.12 crores and expects to achieve its full-year revenue guidance of ₹650 crores with an EBITDA margin of 8-9%, driven by strategic market diversification and the ramp-up of new product lines.

Highlights

  • Consolidated revenue grew 30.90% YoY to ₹111.50 crores in Q1 FY26.

  • The company maintains a strong current order book of ₹173.12 crores.

  • Working capital cycle reduced from 37 days to ~19 days over the last five years, indicating improved operational execution.

  • New product verticals, including chest freezers and continuous panels, are performing well and securing good reference orders.

  • Management is confident in achieving the full-year revenue guidance of ₹650 crores and an EBITDA margin of 8-9%.

Concerns

  • Consolidated Net Loss of ₹1.47 crores in Q1 FY26, compared to a profit of ₹3.64 crores in Q1 FY25.

  • Consolidated EBITDA margin declined to 4.06% in Q1 FY26 from 7.2% in Q1 FY25, attributed to new vertical scale-up costs and seasonal factors.

  • Inventory days increased to 70-80 days (from a normal of 60 days) and debtor days to 70+ days (from 60-65 days) due to new products and market penetration efforts.

  • The ₹150 crore Phase 2 CAPEX plan is still under discussion with no clear timeline for implementation.

Key financials

  1. Consolidated Revenue ₹111.5 Cr +30.9%YoY
  2. Consolidated EBITDA ₹4.53 Cr -26.1%YoY
  3. Consolidated EBITDA Margin 4.1%
  4. Consolidated PAT ₹-1.47 Cr

What they filed

Q1 FY27: revenue up 60.4%, net profit down 12.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue103 111 180 112 147 +43%153 +39%256 +42%179 +60%
EBITDA8 7 21 4 10 +14%10 +48%21 +0%3 −32%
Net profit5 3 12 -1 2 −58%1 −48%10 −13%-2 −13%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Cold Room
    51% Revenue Contribution
  • Industrial Refrigeration
    3% Revenue Contribution
  • Commercial Refrigeration
    17% Revenue Contribution
  • Transport Refrigeration
    6% Revenue Contribution
  • Ammonia-based Systems
    6% Revenue Contribution
  • Continuous Panel Business
    9% Revenue Contribution
  • Commercial Freezer
    8% Revenue Contribution

Order book

high confidence

Total value

₹173.12 Cr

as of 2025-06-30 quantified

Execution

Unsolicited order book strength includes strong revenue visibility for the coming quarters.

Composition

Mix 7 products
  • Cold Room ₹26.63 Cr 19.6%
  • Industrial Refrigeration ₹3.27 Cr 2.4%
  • Transport Refrigeration ₹2.21 Cr 1.6%
  • Commercial Refrigeration ₹17.38 Cr 12.8%
  • Ammonia Vertical ₹52 Cr 38.2%
  • New Product Verticals (Chest Freezers) ₹1 Cr 0.7%
  • Continuous Panel ₹33.66 Cr 24.7%

Share of order book by product, derived from disclosed amounts

The order book remains strong, and the company has good revenue visibility for the coming quarters.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Routine day-to-day upgrades, new technology, semi-automation ₹7 Cr
    To exclude that CAPEX, it is our day-to-day up gradation and such things. We do around Rs. 7 crore to Rs. 8 crore in a routine.
  • Debt Debt disclosed
    Our working capital limit, we have deployed profit in our CAPEX plan. So, we have a limit of Rs. 80 crores in our working capital.
  • Liquidity Liquidity disclosed Working capital cycle reduced from 37 days to ~19 days over the last five years. Inventory days increased to 70-80 days, and debtor days to 70+ days in Q1 FY26.
    The company has significantly optimized its working capital cycle, reducing it from 37 days to now almost 19 days... inventory days, which used to be around sixty days that will now be ten more towards, it will be around eighty days... the debtor days, which used to be around sixty to sixty five days, will now be more towards seventy plus days.

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · High confidence ₹650 crores
    I think that Rs. 650 crore top line is fine, we should be able to achieve.

    — Management

  • New Business Revenue Revenue · this full year · High confidence ₹150 crores
    So we think that this vertical will contribute target of Rs. 150 crore in this full year

    — Management

  • Total Revenue Revenue · FY27-28 · High confidence ₹1,000 crores
    I think we will stick to the plan of Rs. 1,000 crores in FY'27-28.

    — Management

  • Maximum Revenue from New Products (post Phase 1 expansion) Revenue · Medium confidence ₹400 crores
    If we add both the verticals, we can generate a top line of Rs. 400 crores.

    — Management

Margin

  • FY26 EBITDA Margin Margin · FY26 · High confidence 8-9%
    EBITDA margin, we feel that somewhere around previous EBITDA margin, we may close in current financial year. Maybe around 8%, 9% full financial year.

    — Management

  • New Business EBITDA Margin Margin · longer term · Medium confidence 10%+
    By the way, we can expect EBITDA of 10% or more from both the verticals.

    — Management

  • EBITDA Margin (at ₹1,000 crores revenue) Margin · FY27-28 · High confidence 10-10.5%
    We have kept a 10%-10.5% EBITDA benchmark. Till the time new products are established, we have some entry-level tactics. But on Rs. 1,000 crores, 10%-10.5% EBITDA is achievable.

    — Management

Capacity

  • Peak Level Capacity for New Products Capacity · 2-3 years · Medium confidence 2-3 years
    We may reach the peak level capacity in two, three years.

    — Management

Market Share

  • White Labeling Percentage Market Share · this year · Medium confidence Not more than 8%

    Previously 5-6% → Not more than 8%

    It can increase a little. If we look at the percentage, it will not be more than 8%.

    — Management

What to watch in Q2 FY26

FY26 Revenue Guidance Achievement

Next quarter (Q2 FY26 results)
Current Q1 FY26 Consolidated Revenue: ₹111.50 crores
Target Progress towards ₹650 crores for FY26

Why it matters

This is a key indicator of overall business performance and the company's ability to recover from the Q1 loss and meet its annual targets.

I think that Rs. 650 crore top line is fine, we should be able to achieve.

Risks & concerns

  • Profitability Pressure in Q1 FY26

    high

    Net loss of ₹1.47 crores and EBITDA margin decline to 4.06% due to seasonal input costs, higher finance costs, depreciation, inventory adjustment, and new vertical expenses.

    Management acknowledged

  • Working Capital Deterioration

    medium

    Increase in inventory days to 70-80 and debtor days to 70+ due to new products and market penetration, temporarily blocking working capital.

    Management acknowledged

  • Competitive Intensity and Pricing Pressure

    medium

    Price pressure due to competition and 30% excess manufacturing capacity in the domestic industry.

    Management acknowledged

  • Uncertainty in Phase 2 CAPEX Timeline

    medium

    The ₹150 crore Phase 2 CAPEX plan is under discussion, but the timeline for implementation is not yet clear.

    Management acknowledged

  • Seasonal Impact on Demand

    low

    Early monsoon and unseasonal rains in May impacted Q1 season demand, leading to a missed revenue target of ₹130 crores for the quarter.

    Management acknowledged

Q&A highlights

5 direct
FY26 Revenue and EBITDA margin guidance Direct
I think that Rs. 650 crore top line is fine, we should be able to achieve. And EBITDA margin, we feel that somewhere around previous EBITDA margin, we may close in current financial year. Maybe around 8%, 9% full financial year.

Confirms the company's full-year financial targets despite a challenging Q1, providing clarity on management's outlook.

Asked by Arnav Sakhuja

Status of the Rs. 150 crore Phase 2 CAPEX Partial
There are some dialogues currently going on. There are some acquisition related, technology types, JV related discussion is also going on. They all are very positive discussions. Maybe in a short while, at an appropriate time, you may get an update. But currently, we have been focusing on stabilizing our research and new CAPEX plan related updates will be communicated in due course, once there is any update in that.

Indicates that significant strategic growth plans are in progress but not yet finalized, suggesting potential future expansion without immediate commitment.

Asked by Arnav Sakhuja

Break-even targets and Q1 contribution for new business verticals (continuous panel, commercial freezer) Direct
The new business of Q1 has a contribution of Rs. 9.61 crore for the continuous panel and Rs. 8.61 crore for commercial freezer. And if we talk about the break-even of the whole year, then in the continuous top panel, at Rs. 80-82 crore, after recovering the cost of depreciation and interest, there will be a break-even. At EBITDA level, it will complement the break-even. And in commercial freezer, there will be a break-even between Rs. 55 crore and Rs. 55 crore.

Provides specific financial targets and current performance metrics for the new growth drivers, which are crucial for assessing their ramp-up and contribution to overall profitability.

Asked by Ajay Surya

Deterioration in working capital metrics (inventory and debtor days) Partial
If we look at the inventory level, going forward, we will do aggressive business... So, the utilization of working capital in this year, and maybe it will be there for the next year also... inventory days, which used to be around sixty days that will now be ten more towards, it will be around eighty days... the debtor days, which used to be around sixty to sixty five days, will now be more towards seventy plus days.

Highlights a short-term operational challenge impacting cash flow, which management attributes to new product stocking and market penetration, requiring monitoring.

Asked by Resha Mehta

White labeling percentage for last year and current year expectations Direct
It will be around 5%, 6%... It can increase a little. If we look at the percentage, it will not be more than 8%.

Offers insight into the company's strategy for capacity utilization and market penetration, particularly for new products, by leveraging white labeling.

Asked by Manish

Impact of early monsoon on Q1 performance and revenue targets Direct
The early monsoon started in full-fledged from 10th to 12th June. In May, it rained for four, five days. Because of this, the consistency of the first quarter's season demand, the fourth quarter and the first quarter, it broke for the first quarter. So, our target was also to do Rs. 130 crores in the first quarter. But because of the early rain, it did not happen.

Provides a specific external factor that negatively impacted Q1 revenue and profitability, offering context for the underperformance against internal targets.

Asked by Ajay Surya

Overall demand scenario, competitive intensity, and industry outlook Direct
As you are saying, there is a pressure on the price because of the competition. Because of the import opportunity of domestic industry, everyone has increased their install capacity. Actually in front of Indian there is 30% excess capacity for manufacturing... Overall, if I talk about the Indian market, it is good. There is no need to worry... Overall, the business is good. It is looking good for the next ten years.

Offers a comprehensive macro view of the industry, highlighting both the competitive pressures and the long-term structural growth drivers for the business.

Asked by Ajay Surya

3 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

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.

Strategic Growth Drivers and Diversification

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.

Strong Order Book and Future Visibility

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.

New Business Performance & Break-even Targets

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.

Working Capital Management

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.

Long-term Vision and CAPEX Plans

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.

Industry Outlook and Competitive Landscape

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.

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