IFB Industries Limited

IFB Industries reported a strong Q4 FY25, with revenue growing 23% YoY to ₹1,312 crores and PBDIT increasing 28% YoY to ₹69 crores, achieving a 5.28% margin. PAT for the quarter was ₹22 crores, up 57% YoY. For the full year FY25, revenue reached ₹4,977 crores, a 14% YoY growth, while PBDIT grew 35% YoY to ₹325 crores, with a margin of 6.5%. Full year PAT saw an 87% increase to ₹129 crores, demonstrating significant profitability improvement.

The company has initiated a major cost reduction program with Alvarez & Marsal, targeting a minimum of ₹200 crores in material cost savings over the next 18 months, with ₹70-80 crores expected in P&L by FY26. Total savings across material, fixed, logistics, and warehouse costs are projected to exceed ₹350 crores. Specific targets include a ₹20 crore reduction in indirect costs (freight/warehouse) and a ₹6 crore per month reduction in fixed costs starting from Q2 FY26, aiming to significantly boost margins.

The front-loader washing machine market remains stagnant, though IFB gained 1.5-2% market share in the addressable segment. The company's new top-loader series, launched last year, achieved 27% growth in Q4 against an industry growth of 15-16%, also gaining 1.5-2% market share. Management has no plans to enter the semi-automatic segment but is focused on improving gross margins through sales volume, increasing market operating price (MOP), reducing scheme payouts, and lowering bill of material costs.

The AC segment achieved 400,000 unit sales in FY25 (342,000 IFB brand, 61,000 OEM), with IFB brand sales growing 52% in Q4. The AC segment turned EBITDA positive in FY25, a significant improvement from over ₹70-80 crores in losses in FY24. The refrigerator segment also became EBITDA positive in FY25 and is expected to stabilize at 55,000-60,000 units per month. Management is confident of robust growth in these categories, targeting a minimum 5% plus EBITDA margin for AC and expanding into higher-end refrigerator capacities (326L+).

A key challenge highlighted by management is the persistent inefficiency in distribution and sales force management, particularly in regions like South India and Uttar Pradesh. Despite acknowledging these 'manning issues' for several years, the company is now accelerating efforts to uplift internal talent into leadership roles and strengthen its town-by-town, dealer-by-dealer approach. The expansion of IFB retail exclusive stores (IFB Points) from 487-500 to over 750 by end of FY25 is a strategic move to enhance customer experience and market reach.

Planned CAPEX for FY26 includes ₹100-130 crores for the appliance division (for new washer capacities up to 14kg and refrigerators up to 326L), ₹45 crores for normal engineering division CAPEX, and an additional ₹40-50 crores for bringing the motorcycle chain project to India. The electronics manufacturing project with Titan will also entail ₹20-25 crores in CAPEX. The engineering segment, which saw only 2% growth in Q4, is targeted to grow at least 20% annually, driven by internal growth and greenfield projects.