Singer India Limited

SINGER experienced an unusual Q1 FY26 with an overall drop in revenue, impacting profitability. The sewing machine segment saw a 4% decline in revenue, primarily due to the traditional cast iron segment. The appliances segment faced a 14% revenue decline, resulting in a ₹2.36 crore loss, attributed to a shorter summer and intermittent rains affecting cooling product sales and leading to higher trade inventory. Despite these challenges, management expressed confidence that the revenue drop is transitory^📎 and not indicative of underlying growth momentum.

The zigzag sewing machine segment demonstrated strong growth, with revenue increasing by a healthy 38% in Q1 FY26, supported by the introduction of Husqvarna Viking sewing-cum-embroidery machines. In contrast, the traditional cast iron segment experienced a decline. The industrial sewing machine category, while showing over 29% revenue growth in FY25, remained flat this quarter due to high trade inventory. Management aims for healthy double-digit growth in the coming years for the overall sewing machine business, targeting a 30% industrial segment mix within 2-3 years from the current 17%.

The appliances segment's Q1 performance was significantly impacted by adverse weather conditions, leading to a 14% revenue decline and a 100 basis point drop in gross margin. To counter this, SINGER is making a strategic push into the high-potential fan segment, planning to launch a full portfolio of 68 SKUs within the next 2-3 months. The company's goal is to bring the appliances segment to break-even and then into profitability within the current fiscal year, leveraging its strong brand trust and building a robust product portfolio and distribution network.

SINGER secured a significant purchase order for 2.8 lakh machines, valued at approximately ₹200+ crores, under the Pradhan Mantri Vishwakarma Rozgar Yojana. This order represents 70% of the total requirement under the scheme. While the order is currently sub judice, there is no stay on supply, and deliveries have already commenced. Management is confident in its ability to fulfill the order within the 12-month execution timeline and expects this to be largely incremental business, providing a strong footing for further distribution expansion.

The company is focusing on innovation across all sewing machine categories, including colored machines and redesigned models in the black segment, and multi-needle embroidery machines. For appliances, the focus is on fans, coolers, heating products, and kitchen appliances, with 68 new fan SKUs planned. SINGER aims for a long-term EBITDA margin of 8-10% and does not foresee operating margin compression. The company plans to build its e-commerce presence, starting with cities, to ensure proper price positioning.

Overall expenses were well controlled, with increases mainly due to higher brand promotion, e-waste compliance, and frontline support for growth areas. A fire incident at the Delhi office did not affect business operations or data. On the manufacturing front, SINGER prefers outsourcing to good vendors to focus on growth areas, but has expanded capacity at Jammu to ensure self-reliance for large orders like PMY. The company is also advocating against the dumping of pre-used industrial machines and expects BIS standards to help.