Elin Electronics Limited (ELIN) Q3 FY2026 Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I'm Akash, moderator for the conference call. Welcome to Elin Electronics Limited Q3 FY '26 Investors Call. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Mr. Gulshan Singh. Thank you and over to you, sir.

Thank you, sir. Good afternoon and very warm welcome to everyone. On behalf of Sunidhi Securities, I welcome you all to Elin Electronics Limited Q3 FY '26 Earnings Conference Call. Today, we have with us our management represented by Mr. Kamal Sethia, Managing Director; Mr. Sanjeev Sethia, our Director; Mr. Akash Sethia, Head of Strategy; and Mr. Praveen Tandon, our CEO. We thank Elin Electronics Limited for giving us the opportunity to host the call. I would now like to hand over the floor to the management for their opening remarks, post which we will open the floor for Q&A. Thank you and over to you, Sanjeev, sir.

Thank you very much, Mr. Gulshan. Good evening, ladies and gentlemen. This is Sanjeev Sethia, Director at Elin Electronics. And we also have on call today our Managing Director, Mr. Kamal Sethia; our Strategy Head, Mr. Akash Sethia; and our CEO, Mr. Praveen Tandon. Thank you for joining our call for the third quarter and 9 months of fiscal year March 2026. Coming to our overall performance for the quarter. Operating revenues for the quarter was INR 294 crores against INR 266 crores in the same period last year, up 10% on a year-on-year basis. Our revenue growth was driven primarily because of strong growth in our appliances and fan business. This can be attributed to new product launches and customer acquisitions. Consolidated EBITDA for the quarter was INR 11.9 crores against INR 7.6 crores in the same period last year representing a strong growth of 57%. While margins improved, we saw a sharp surge in raw material cost due to increase in key raw material prices like copper, steel, aluminum. This impacted gross margins for the quarter. Consolidated PAT for the quarter was INR 3.8 crores against INR 1.4 crores in the same period last year. Our liquidity position remained strong with net cash of INR 59 crores as at December '25. Our working capital position is at net 68 days due to higher than normal inventory levels. We expect this to normalize within this quarter. Our CapEx spend in 9 months fiscal year '26 was at INR 24.5 crores. As stated in our earlier calls, the aspiration is to be one-stop shop for all high volume home appliance and durable needs of OEMs and our customers. This includes our existing business; lighting, fans, small appliances and our planned new business, medium appliances such as air coolers, chimneys, ovens, et cetera. We will continue to look for such products to add in our portfolio over the next several quarters. Now I would like to share with you the performance and the strategy in each of our business verticals. In lighting, fan and switch segment; the revenue for the quarter was INR 62.3 crores against INR 67.6 crores in the same quarter last year. This was primarily driven by strong increase in revenues from fan, which was partially offset by a marginal decrease in revenue from lighting. LED lighting, excluding flashlight, declined from INR 51.2 crores in last quarter to INR 38.6 crores in the current quarter. As mentioned earlier on our call, this was largely led by volume decline from Signify, which was largely offset by gains from new customers added. The revenue run rate on a quarter-on-quarter basis is on an improving trajectory. As on date, we are serving 5 new customers in lighting in addition to Signify. As on date, on an incremental basis, our new customers are contributing to 50% of our revenues on a monthly basis. We have hired a new business head with strong exposure in the lighting business. With his experience and customer connections, we reiterate that we expect double-digit growth in our lighting business in FY '26-'27. Moving on to our fan business. We have seen strong growth of 100% in our fans business on a year-on-year basis. This has primarily been driven by our BLDC ceiling fan business. We are also working on diversifying our customer base and adding new customers. We expect this strong growth momentum to continue in Q4 as well. Our TPW business is showing robust demand. Overall, we expect fans to grow by another 50% in fiscal year '26-'27. Moving on to the home appliance segment. Revenue growth was robust and increased from INR 52.3 crores last quarter to INR 102.8 crores this quarter. Kitchen and home care revenues increased by 330% year-on-year basis. This was largely on the back of OFR. Our existing businesses of irons, mixer grinders, et cetera, have seen good volume growth as well. Personal segment was down 10% year-on-year due to weak demand in hair straighteners and trimmers. Future growth is going to be driven by this segment and our strong focus on also growing ODM share of the business. While still nascent, we expect ODM to grow strongly over the next several quarters. A quick update about the medium appliance category. While these will be built out of Bhiwadi unit, which will start from next fiscal, we have already initiated discussions with customers for this. We have a strong outlook for our OFR business for next fiscal as well as happy to share that we have tied up with 2 customers for the to-be-launched chimney business. We had shared our optimism in our last call about our relatively nascent export business. We remain in exploratory talks with a few OEMs to supply from India and export to the U.S.A. Discussions will now commence given the easing of the tariff situation. We are very hopeful of restarting our fan export to U.S.A. Further, the government push for Make in India and disincentivizing imports via BIS and QCO makes us further optimistic on our business going forward. Moving on to the FHP motor segment. Revenue declined from INR 55.8 crores in last quarter this year to INR 45.6 crores this year. Please note, this segment reflects only third-party sales. Therefore, while segment sales appear declining, underlying growth is strong given that there is captive consumption of motor for the appliance business. In terms of pipeline of new products to be launched, we'll be launching the cooler motor and the BLDC chimney motor by the next year for both third-party sales and captive consumption towards manufacturing the finished products. I would like to share our guidance of 9% to 10% for revenues from FY '25 to FY '26. Our guidance included revenues from export to U.S.A., which has been 0 since August 2025 due to the tariff situation. We are optimistic that the situation is expected to be resolved soon. We are hopeful of adding a few more export projects over the course of next 4 to 6 quarters. EBITDA forecast for the year is forecast at 5.3% to 5.8% margin. Please note that the margin on export is higher than domestic sales. Therefore, EBITDA margin has been impacted. CapEx for the year will be INR 100 crores to INR 110 crores split as INR 60 crores to INR 65 crores for Phase 1 of the new plant at Bhiwadi and INR 35 crores to INR 40 crores for growth of the existing businesses and factories. Once the new facility is stabilized in 2 years from starting, this will also help us drive up our ROCE since cash sitting idle on our balance sheet has been a drag on the return on capital employed. A quick update on the Bhiwadi factory. Total project cost is estimated at INR 100 crores. Construction has commenced in July 2025 and is progressing well. Given the current progress, we expect the plant to be ready and operational by May 2026. There's a slight delay due to the pollution control restrictions imposed by the government. We expect revenue of INR 140 crores in FY '27 and INR 250 crores in FY '28. Reiterating that as per current estimates, revenue potential of the plant is INR 550 crores to INR 600 crores. Further, we expect a steady-state EBITDA of 7% to 7.5% for this plant. At these levels, return on capital employed for the plant will be at 20%. With this, we conclude our opening remarks. We can now open the floor for question and answers. Thank you very much.

[Operator Instructions] The first question comes from Rahil Dasani from MAPL.

Congrats on the good set of numbers. I'm rather new to the company so some more simpler questions. For these new products that we are getting into or even the new customers that we are entering, you yourself have said in the previous con calls that competition is high. So on what basis of USP or value addition are we able to enter these new customers whose supply chains are already fixed and established?

Yes, sure. Happy to answer this. So if you see in terms of the new products which we are entering to, a, of course the oil-filled radiators, which we already started last year and this is our [ set], then we are getting into chimneys and air coolers. These are the 3 products which are targeted where we -- which are absolutely new for us. Basically in terms of competence and the kind of backward integration which we have in all these 3 product categories is an advantage to us as over competition. So for example in oil-filled radiator heaters, we are the only company in India who is doing the complete fin assembly locally. The rest is being either imported in kit form and just assembly is being done. So there's a distinct advantage. And now after 2 years under our belt, we are further scaling up our local manufacturing facility so we become naturally competitive with shorter lead times. So I think in this, we want to capitalize on our first mover advantage [Audio Gap] capacities to a level that generally it's a limited market so other customers -- other competitors will not easily look at localizing the fin assembly here. So that's been one advantage of the kind of backward integration which we have. The same holds true for chimneys also. If you look at chimneys, basically the major categories in chimneys in terms of first is motors, we are currently the largest manufacturers of chimney motors in the country. So we already have a very strong base and a customer base for motors. Then the sheet metal fabrication and electronics, that is completely in-house. So again here the backward integration, which we can offer to our customers is far greater than, let's say, the existing chimney manufacturers because I believe none of them are making motors in-house and it accounts for -- and probably even the electronics is not in-house. So it accounts for a fairly large percentage of the BOM, which we are going to be doing in-house. In terms of air coolers, again it's a combination of the cooler motor, the submersible pump and the swing motor, which is totally being done in-house including the plastic molding. So that's an inherent advantage which we have in terms of our backward integration as compared to competition. And we are of course already leveraging our existing business with most of these customers because we have fairly long-term business relations with most of the customers who are in the either chimney, for example, Faber is there. We've been supplying motors for a very long time or oil-filled radiator heaters and air coolers. So I believe this gives us a distinct advantage of even getting into a competitive market and creating a space for ourselves. I hope it [indiscernible].

o just to understand this better. Having the fins and motors in-house that of course gives us a lead time advantage. But I believe that would also help us in terms of the cost competitiveness. So if you can share more on that, how much more competitive are we becoming cost-wise by having these things in-house compared to other players who do not have it in-house?

So of course it will depend little bit from product category to category. So for example in terms of OFR since there is no [indiscernible], we see that we are easily about 6% to 8% more competitive than imports for a totally locally made OFR heater. Chimney, again based on the current BOM and the current price valuation and the way which we have got in, I think we are again at least minimum 5% cheaper than the competition. Air cooler is a category we are currently working on. I mean we have not started in the sense that the samples are not out. So I don't have a number right now, but maybe in a couple of months, maybe by the next call, we can give you an update on that also. But chimney, currently we are in the sample -- giving the final samples for evaluation and then start of production when the Bhiwadi factory goes online.

Fair enough. And sir, this you answered me for the new products. But if I take the existing set of products for lighting for example where I believe in a very short span of time, we have been able to add 6 new customers. So if you can explain how were we able to enter those players? What did we give them better compared to their existing suppliers?

Okay. So see, in lighting we have been in the lighting space for close to about 22 or 23 years now. So we have a very long track record as a lighting company. Of course we were bound by the exclusivity agreement with Signify. So over these last so many years, there has been a lot of these companies who have been approaching us for lighting, but because of our agreement, we were not able to service them. Now that that agreement is no longer there, I mean it's been -- I would not say fairly simple, but yes, we've worked on it. We were always integrated in terms of lighting. So we were competitive, but we didn't have the scale to match the other lighting players. So we've worked on that. We enjoy a very good reputation in the market as a very premium quality supplier. So at similar prices, we have been able to attract some of the customers from our competition. And like I said, with the addition of a new resource who has a very proven track record of dealing with multiple customers in the lighting business, it has helped further attract these customers. So some of them have been existing customers, some are new additions. But with our track record of supplying to Philips for 2 decades plus, I think that's made it a little easier to attract these customers as a quality supplier of lighting products.

Fair enough. And just one last question before I get back the queue. For these 6 new lighting customers that we have added, I believe we have added maybe 4 of them and 2 are to be added by year-end. So in FY '27 what sort of turnover can we expect from these 6 customers in lighting?

So currently, we have already onboarded 5 customers that means where the billing has already started and we expect maybe to add another 1 or 2 customers. We don't want to spread ourselves too thin also with a very large number of customers, but we want to focus on quality customers who we can service and gain a fairly large business share in terms of volume. That's our overall strategy going forward. In terms of revenues, like we said, we are currently almost on a 50-50 basis in terms of the revenues. While we expect that the Signify lighting revenues will be at the current stage, I don't see it going up significantly. I think the existing new customers so we are looking at about a revenue of in terms of lighting from the new customers to the tune of around maybe INR 150 crores to INR 170 crores in the coming fiscal.

Okay. So why I was asking this is because in the previous con call, we said that these 6 new customers can do at least 20% to 30% premium revenue of what Signify used to do monthly for us, which was INR 17 crores to INR 20 crores. So that number...

What we said are our monthly run rate by probably the year-end will be on par with what we were doing with Signify, let's say, prior to the Lightanium deal and the revenue is declining. So we are almost there at those levels. So we are almost at revenues which we used to do with Signify. And now with the addition and growing of these new customers next year, the revenue from them will continue to grow.

Next question comes from the line of Ananya Nichani from Thinqwise Wealth Managers LLP.

Yes. Sir, I wanted to inquire about your gross margins. They are about 40 basis points lower this quarter as well you mentioned because of raw material pricing and some repricing with customers. So can you elaborate on that and how do we look at gross margins going forward? What would be like the steady-state basis like if there is a new normal or something on that? That's my question.

Sure. So like we pointed out in our opening remarks that our key raw materials especially on the metal side so steel, copper and aluminum have seen a fairly sharp increase. If you follow the metal pricing market, most of these are almost trading at all-time high levels. So the impact of this increase, which will be repriced subsequently in the next quarter, has been borne by us in the current quarter. So depending on our contracts, some of them are on a monthly basis, some of them are on a quarterly basis. So wherever it was monthly, it has been repriced already. Wherever it was quarterly will be done in Q4 or in the current quarter of the year where we are. So I mean as a temporary time period, there has been an impact on account of these increase in RM prices. So therefore, our gross margins have been slightly impacted like you pointed out to I think to the extent of 40 basis points.

So in Q4 as well we'll see a compressed margin sort of situation?

It's very difficult to kind of predict how RM prices behave. I'm sure you will appreciate that probably no one in the world can tell you where the metal prices will settle. But assuming they stay steady, then there should not be an impact because then the repricing will nullify any of that. But assuming they continue to keep on surging, there could be a further impact because last -- what happens is last quarter or the last month average is used in this quarter or this month. And I mean just to also give you all 3 sides of the coin. If there is a decline from these levels, then there could be an added advantage. So very difficult to predict where the metal prices will go. But I've explained to you broadly in terms of direction, whichever way they go, what the impact will be.

[Operator Instructions] The next question is from the line of Mr. Kunal Mehta from Sunidhi Securities.

My first question will be look, I think last year we saw that there was heavy price erosion in the lighting segment. So what is the current scenario there now that we have about 5, 6 customers onboarded? So are we able to get a competitive price or a better price or still the scenario has been same?

So in terms of lighting, I mean just like now Akash was explaining, commodity prices has been at all-time high, dollar is pretty strong. And in terms of electronics, again the chip availability is becoming a little bit of a problem basically driven by a lot of the chip volumes are being now diverted to AI-related chips, EV-related chips. So lighting is coming at a little bottom of the line in terms of how the capacity is allocated by the chip manufacturers. So lighting in general across all consumer electronic products are seeing a price increase. I think price erosion in lighting business is going to stop. The prices are going to head north for sure. It's already started happening from this month. If not this month, maximum I think next month I expect at least a 4% to 5% kind of price increase across the board in lighting products, some might be little more. But bottom line, I think we will be seeing now prices going north in lighting and other consumer electronic businesses.

And sir, I mean every quarter since almost Q1, we have been constantly downgrading our gross margin guidance for the year from about 6% to 6.5% to 5.5% to 6%, now about 5.3% to 5.8%. So is it only because of the raw material or there are anything other than that also that is coming up? Is it capacity utilization? Is it something else that is affecting the gross margins?

So look, it's -- so just 1 quick clarification. It's not gross margin. I think you're referring to EBITDA margins. Quick clarification. Look, it's probably like you pointed out, you pointed out a whole host of factors. It's probably a combination of that. It's never really 1 single factor that plays out. So on the lighting side, like we pointed out, the prices of electronics and weak rupee is impacting us because there are certain imported content in our lighting business. On the appliances side and the motor side, it is the price of metals that is very, very difficult to predict. So like I said, our job we feel is to give you a realistic picture of the business as we see it and in that very spirit, we are sharing the situation as is. We agree that there is a slight compression that we have seen and that we do expect in our EBITDA from what we have forecast. Our job is to lay it out to you as we see it clearly.

Okay. And sir, the impact of BIS, when do we see it to take effect? I mean is it September of this year or is it -- actual effect will come in the March of next year?

BIS in a lot of product categories is already implemented. So you are seeing the impact. If you -- let's say, for example if I take the chimney business, there's a lot of local manufacturing going on. Chimney motor manufacturing business has done extremely well last year. So these are already happening in terms of OFR also. I mean most of the appliances are now covered by BIS. For us, the next big growth boom which could happen because of BIS would be our FHP, fractional horsepower motor business. So that is still not 100% under BIS. So I think with those motors coming under BIS, there would be growth opening up of local manufacturing. Let's say, washing machine motors I think would be a big category where the current local manufacturing I'd assume is maybe at between 5% to 8%, maybe max 10%. Air conditioning ODU motors like the BLDC motors right now I think more than 80%, 90% of the motors are imported. So I think that category will see a big impact if BIS comes in. I think it's slated to come in for August or September of 2026. In terms of lighting, it's already controlled by that number. Most of the appliances are under BIS. And as far as the Chinese companies getting BIS, it's still a little difficult. Although a little bit getting visas and things have become a little easier, but still there are certain constraints there. So for us, the next big mover is going to be the motor business once it comes completely under BIS.

Sir, yes, just on the FHP motor, I think this year in this quarter, we saw about an 18% decline Y-o-Y and most of this was due to mixer grinder volumes declining and even the synchronous AC motors. So do you see this that because of BIS, a lot of companies might have some kind of a captive FHP motor plant. How is our market share turning up because of this?

Yes. Of course, our third-party sale of motors has gone down whereas there has been intercompany business, mixer grinders, that's kind of -- those numbers have gone up, but of course we reported as a final mixer grinder sale. But in general small appliances, I think this Diwali was a little tepid and the couple of months post Diwali, the demand of mixer grinder motors, chimney motors was fairly low. It's now picking up. I think a lot of the bigger appliances in the automotive industry did exceedingly well during Diwali. So small appliances in general and chimneys had a fairly tepid Diwali. Things are again now looking up and . I think again the motor numbers should go up. Like I said, for example we also got into the cooler motors. But last year, coolers was -- coolers and air conditioners both in terms of the season was fairly bad because of unusually long rainy season. So there was a lot of inventory carryover. So actual manufacturing of air conditioners and coolers has now just taken off. Normally it starts in October, but this time I think it got delayed by couple of months. So those categories of motors, which we're expecting to pick up during the October, November, December period really did not happen. So that's another reason why FHP motors was a little down. Captive has gone up in terms of mixer grinders for us and some a little bit in the TPW segment also. Now we've consolidated our motor TPW manufacturing, the complete fan manufacturing in Ghaziabad plant. And those numbers are doing well, but it's being reflected in the overall fan business for us as a complete product.

Okay. Sir, now can you see the Bhiwadi plant start from April or will there be some kind of a lag where you'll be shifting the chimney production from Ghaziabad to Bhiwadi and a new facility comes up. So will there be some kind of a shifting lag where you'll be shifting some operations or will it be a smooth transition?

We will be shifting our OFR business to Bhiwadi from the existing Ghaziabad plant. Chimney is also happening in Bhiwadi, but it will probably be the commercial production will commence there. Our date of commercial billing is we've given as May '26. Prior to that, there are a lot of regulations which have to be completed in terms of the BIS approval of the plant, the manufacturing line has to be BIS approved. So we need to do the preliminary sample build over there, then submit it for approval, then get the line approved. So this takes about 2 months' time. So we expect our internal trials to start somewhere in March of '26 and commercial production will go online in May '26.

Okay. And sir, just 1 last question. How are we on the working capital and how is the progress there? Are we lagging from our -- because net working capital days has increased to almost 68 days from 59. So are we maybe -- is there going to be a little delay in execution of improving on the inventory and the payable days or are we on track?

We are okay in terms of payable days. I think we are doing quite well. Like we pointed out again in our opening remarks that there were certain abnormal inventory buildup that we have seen during the quarter -- towards the end of the quarter. We expect that to normalize within this quarter itself. So hopefully, as at the end of March, we should be around the 50-day target that we have set out on a net basis of course.

[Operator Instructions] We have a follow-up question from Mr. Rahil Dasani from MAPL.

Sir, this INR 165 crores, INR 170 crore target that we have from the new lighting customers for next year, is this dependent on prices improving last year like we said in the previous answer or based on the prices as they are today?

So the value which I have given to you is based on existing prices. But in terms of the price increase, which I believe, I mean, which I said that I expect around, let's say, a 5% increase, I think this will be across the board. And I say this because I see some of it has already happened in this month. And max, China is going for the Chinese New Year. So we will be getting new prices from China also once they come back to work and that will also determine how the lighting business moves. But in general, I expect a price increase across lighting categories. And my current number, which I told you about INR 150 to, let's say, INR 170 kind of range, that is on the existing prices. What I'm saying is that the numbers which I gave you are on the current existing prices. That means what was operated, what was prevailing in the month of January. And like I said, the price increase, which I expect minimum around 5%, that could further push those numbers up.

Perfect. Got it. And sir, just a broader question to understand the customer stickiness in this industry. Why did we lose Signify after such a long-term relationship, that too an exclusive relationship?

Why did we lose? So I could give you my -- so a, let me answer that question. A, we have not lost Signify as a customer. So they continue to buy lighting business -- light fittings from us. And we are still partnering with them for the fan business and that's what that business is doing extremely well for both of us. So we are still a strategic supplier for them and they are approaching us for a lot of the categories which they are looking at to grow their business. Now as far as the Lightanium part of the business is concerned where Signify has formed a collaborative venture with Dixon, the lighting business. I mean I wouldn't attempt to answer the logic behind that. I mean that's how they've seen the lighting business and probably some consolidation which they wanted to do of their plants in Baroda where the conventional lighting business has gone down. So that's something best left to them. But what I can assure you is that we are still a strategic supplier for them, a priority supplier. And if I add the fan business, our business with Signify is -- combined business with Signify is growing. So whatever we've lost in lighting, we've gained in the fan category. So our business with Signify still remains strong and on a good growth trajectory.

Got it. And just to get my numbers clear, I believe we said that Signify used to be at least INR 19 crores, INR 20 crores in totality for us. And from that, monthly they used to generate INR 19 crores, INR 20 crores for us. And from that, annually maybe INR 40 crores, INR 50 crores is the business that we lost, right?

Correct. So we used to be, let's say, at the INR 240 crores, INR 250 crores range. So that's about INR 240 crores for the lighting business. And currently, we are at about maybe the INR 100 crores, INR 120 crores kind of range in the lighting business. It could be a little plus up and down. It depends. So what Signify has moved from us is the consumer part of the business, part of it, not entirely. We still work with them. The professional business remains intact. So if the professional business does well, then that number could further go up. But given the current scenario, that's what the business was around INR 240 crores, INR 250 crores in the last couple of years. And now currently, it's about looking at a run rate of about INR 120 crores to INR 140 crores with them.

Now coming to the chimneys, ovens and the OSR heaters; I believe the approval for that is going on at the Ghaziabad plant and the product will be shifted to Bhiwadi once the plant is ready. So have we planned the expected number of customers approved us to achieve our INR 140 crores, INR 160 crores of target in FY '27 from the Bhiwadi plant?

So 2 things. One, OFR is going to be a shifting of the business because it's already operational in Ghaziabad for last 2 years. And based on -- so we've already planned the entire shifting in terms of the assets and of course there's an approval process. So that's been planned. Based on what we did this year and the forecast for the current year where we are again increasing our capacity, like I mentioned, that we are further increasing our capacity so that we kind of be the dominant player and not let too many people in, I believe we should be able to hit the numbers between OFRs and chimneys. The oven is not a very big business right now because in terms of oven, there are slight shifts in the consumption pattern and by that, I mean in terms of oven, now you are seeing the air fryer is becoming very popular. And there's a new product in the market, which is a combination of the air fryer and the oven, which is again catching steam. So what we are looking in this oven category is to start with the oven and then maybe a couple of quarters down we could look at adding the air fryer business in our plant, which will further increase those numbers. So we are in active discussions with couple of key customers for the air fryer business as well. So with these 2 put together -- yes, the new products for Bhiwadi. So with these 2, but I think between OFR and chimney, we should be able to hit the guidance which we've given in terms of the turnover for Bhiwadi in '26-'27.

Got it. So just to summarize it a bit. Only 2 products, OFR and the chimney, can do INR 70 crores to INR 75 crores each in FY '27 and this is while we are launching chimney in H2 FY '26.

Please read it as combined between OFR and chimney, we should be able to do INR 170 crores. And the air coolers and the oven business, which we will start should -- there's always a lag by the time you launch and you show the product and the approval process happens. So we are fairly confident that these 2 products alone should give us about INR 170 crores kind of business outlook.

Got it. No, why I was asking for the split is because I believe we are to launch chimneys only in H2 FY '26. So that's only 2 quarters of numbers to generate a target. That's why I was asking for the split that we are planning for.

Currently not in a position to give you an exact split.

No problem. And sir, at 25% to 30% utilization in FY '27 from Bhiwadi, what sort of EBITDA margins can we achieve there?

Look, we've mentioned that steady state of course will be, say, 7% plus. But obviously initially, it will be much lower than that because of only part utilization of the plant. What we would ask is once the plant is up and ready, we'll have a better idea to give you some sense of what in totality for the year we can expect. So just bear with us for another quarter or 2. We are fairly close to [Audio Gap].

Yes. Got it. And sir, how much additional capacity will this shift from Ghaziabad to Bhiwadi leave in Ghaziabad? And will that excess Ghaziabad capacity will get utilized immediately or else we will also see a drop in margins in that unit because of a lower utilization like we have seen in the past?

So we already have a plan in place. Of course this is going to be a fairly large revenue, which will be moving out of Ghaziabad. So we are looking at 2 product categories to offset and then further grow. One, I mentioned that the fan business overall is doing fairly well for us. So we are looking to grow that business. This year I think we'll have 100% growth over last year. And so we are looking at a minimum 50% kind of growth or maybe a little more for the fan business. And the second category is in terms of the small appliance business, there are certain -- especially the mixer grinder category, we are looking to start operations out of our Ghaziabad plant also as well. The logic behind this is that in terms of mixer grinder has a fairly large market share and it's probably a round-the-clock kind of business. All our motors are being made in Ghaziabad for the mixer grinders. We believe making the mixer grinder in Ghaziabad will give us certain logistics and overall increase the overall efficiency so we could offer at a better price point. Secondly, of course, Baddi now does not have any excise benefit as such and now in the last couple of years, customers are also not very keen to buy out of Baddi because most of the sales happens in the bigger cities and in the metros. So the market is here. So we want to move part of our mixer grinder business from Baddi and we believe in Ghaziabad we can give a better value proposition and we can further add and grow our mixer grinder business given the fact that motor is going to become in-house. So of course it saves on certain logistics and packaging costs, et cetera, et cetera. So these are the 2 categories we are looking at of course along with certain FHP motors like coolers and chimneys, et cetera, to not only offset the shift in revenue, but further grow the business.

But sir, if we shift the mixer and grinders from Baddi to Ghaziabad, that will again lead to a lower utilization in Baddi and hence, we are again -- we will get what we call as a reverse operating leverage -- operating deleverage.

So the complete mixer grinder operations will not be shifted out of Baddi. It's selected customers where the market share is not very large that will affect the Baddi business. But we believe that once we start seeing mixer grinders in our Ghaziabad plant, we will be able to attract newer customers, more customers who are currently not buying the complete product from us. They might be buying motors from us and they might be getting -- some of them are making -- buying from us and offering to brands. So we believe that we will be able to corner a portion of that business also.

Got it. So I guess my point is that will we be able to continue at a 6% to 6.5% EBITDA margin at our existing 2 plants, if I forget about the Bhiwadi new unit where of course you will see a dip in margins and profitability on the consol level. That's what I'm trying to understand.

The point is well taken, sir. Like I said, so on the existing business, we are reasonably confident. But on the Bhiwadi business, like I said, just allow us a quarter or 2 till the plant actually starts to give you an idea of what the EBITDA for Bhiwadi will be and therefore, what the consolidated EBITDA for the company will be.

We have a question from [ Mr. Samarth Ashok ] from Janak Merchant Securities.

Sir, my question was on the motor division. Considering we have lot of captive needs and there is a large opportunity to supply to the in-house appliance manufacturing opportunity, which is arising.

There was a disturbance in between so may I ask you to repeat your question, please?

Sir, it was related to the motor business. Considering we have a higher captive requirement and we sell motors to other customers also and because of the BIS regulation, we have -- there are new opportunities opening up. So are you going to expand your motor capacity further and it is a better margin product also for us? So any plan to expand capacity further?

Yes, we are looking to expand our motor capacities. I mean, like I mentioned, we've already set up a line for cooler motors. However, this particular season, the cooler industry started a little bit late because of the excess inventory built up in the pipeline because of last year's fairly dismal cooler. So we are getting into the cooler business and cooler pumps. We are getting into the BLDC chimney segment. And we are looking at 2 more segments, one is the washing machine segment and the AC ODU, IDU BLDC motors for further expansion. Out of these 2 segments, washing machine motors are undergoing trials at our end so we are building up a line and getting our motors approved. We believe that once BIS comes into play in washing machine motors, a lot of local buying will start. So there, our existing infrastructure is aligned to make these motors. But however, BLDC, AC, ODU and IDU motors; we are a little bit of a wait and watch because our existing infrastructure is not exactly suited to make this motor. There's a fairly high large investment required to make this motor at the same cost levels, let's say, at which China is operating. So there we are at a wait and watch. But these other 3 categories, we are fairly confident. Two, we are of course equipped to start. The third one, we are getting our motors approved and as and when the BIS kicks in, I mean we will be in a position to start that as well.

So from the past time from the [ DRSP ], we had almost like 10 lakh capacity of motors per month. How much we'll be expanding to?

So are you talking about expansion or utilization in terms of overall FY '26?

No, expansion.

I think, sir, the 10 lakh number that you're probably referring to is number one, an overall kind of number. It comprises of multiple types of motors. So let me get back to you offline on that because we are not seeing expansion on all categories of motors. There are -- like Sanjeev ji mentioned, there are only 3 categories of motors where expansion was being undertaken or considered. So the number is not going to be very large, but we'll just get back to you offline with that number.

The next question comes from Mr. Kunal Mehta from Sunidhi Securities. It's a follow-up question.

I just have 1 question. It's on this personal care segment. In Q1 also we saw a dip in the volumes and even in Q3 because Q2 was the festive season so there was quite a lot of volume. But is there some kind of lower volume scenario that we are seeing in personal care and trimmers and hair straighteners and hair dryers. So I mean is the focus more on medium appliances and kitchen and home care and personal care is kind of we are not having much focus to expand our customer base there?

No, no. It's not like we don't have focus, but these are -- look, the way we see it is these are vagaries of the market. Consumption has been a little bit erratic. This is more an urban discretionary kind of category. I mean much more urban, less rural. So sometimes the way an urban customer allocates wallet share, automotive prices have come down, certain wallet share gets allocated there. So you see temporary kind of mismatch. It's very difficult for us to give you an exact precise reasoning as to why it's gone down. But rest assured, it is not due to lack of focus. We are working strongly with our customers to kind of drive this growth as well.

Have you added any customers in the personal care segment you think in the last year?

No, we have not been able to add any new customers, but we have been able to secure 3 new subcategories of projects within personal care. So we should see some growth being injected once those projects go live in about maybe anywhere between -- I mean roughly 6 months' time.

Okay. And sir, now do we see this order from the U.S. because of the tariff situation again reversing? Do we see that order in the U.S. soon coming in in FY '27?

Yes, yes, we are very hopeful of that. I mean this is just a very, very recent development, just about maybe less than a week ago. So teams are on the ground already. We are all in touch with our customers. But we don't have an exact answer for you yet. I mean I don't want to jump the gun and tell you that it is done. Probably -- I mean we are very hopeful that it's going to be done. But till it's done, I don't want to give you any premature indication.

There are no further questions, sir. Now I hand over the floor to the management for the closing comments.

This is Kamal Sethia. Thank you for sparing your time and giving us an opportunity to address your questions. I hope we have answered them well and looking forward to next call to give you more updates on our company's performance. Thank you so much again for your time.

Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha s conference call services. You may disconnect your lines now. Thank you and have a pleasant evening.