Ice Make Refrigeration Limited ($ICEMAKE)

Good day, and welcome to Ice Make Refrigeration Limited Q4 and FY '26 Earnings Conference Call, hosted by Aryana Matasco. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ariel Rana from Aryana Matasco. Thank you, and over to you, sir.

Thank you, Yousuf. Good afternoon, ladies and gentlemen. A very warm welcome to Ice Make Refrigeration Limited Quarterly Vision Dialogue for the fourth quarter and financial year ended 31st March 2026. Ice Make Refrigeration Limited is 1 of India's leading providers of industrial and commercial refrigeration solutions serving a diverse range of industries through its comprehensive portfolio spanning core rooms, commercial refrigeration, industrial refrigeration, taskport refrigeration, ammonia refrigeration systems and POF panels and cold storage infrastructure and allied cooling solutions. With the presence across India and export to multiple international markets, Ice Make supports critical sectors, including food processing, agriculture, pharmaceuticals, healthcare, hospitality, retail, dairy, seafood logistics and cold chain infrastructure. We appreciate the presence of investors, analysts, shareholders, lenders, business associates, media analyst representatives and other stakeholders who have joined us today. The objective of today's session is to provide transparent communication around the company's financial performance, strategic initiatives, business outlook and long-term value creation road map. Before we begin, I would like to remind everyone that certain statements made during this discussion may be forward-looking in nature and are subject to uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied. Please refer to the company's regulatory filings for a detailed discussion of these factors. Joining us today from the management team is, and I welcome Mr. Chandrakant P. Patel, Chairman and Managing Director; Mr. M. Srinivas Reddy, Chief Executive Officer; Mr. Nikhil Bhatt, Vice President of Strategy; Mr. Ankit Patel, Chief Financial Officer. Last but not the least, Mr. Mandar Desai, Company Secretary and Compliance Officer. I now invite our Chief Executive Officer, Mr. M. Srinivas Reddy, to share his opening remarks. Over to you, sir.

Thank you, Arien. Good afternoon, ladies and gentlemen, and a warm welcome to all those participating on the call today. It's a pleasure to address you for my first earnings call as the CEO of the company. FY '26 has been a year of strong growth momentum, strategic execution and capability building for Ice Make, resulting in a record revenue performance during both the fourth quarter and the full financial year. The growth was broad-based across key consumption sectors. One of the key highlights of FY '26 performance was a strong traction witnessed in our newer product categories, especially the chest freezers, coolers and continuous panel businesses. These businesses have gained very encouraging market traction and acceptance and are emerging as the important growth engines for the future growth of the company. During the year, we made deliberate investments in the manufacturing infrastructure, channel expansion, leadership capabilities, product development, warehouse network, technology and systems and organizational core strengthening. These investments are intended to build future-ready capabilities and create a scalable platform for sustainable growth over the coming years. While some of these strategic investments, along with a few one-time regulatory and growth-related expenses have had an impact on near-term profitability, but are very important building blocks for strengthening our competitive position and unlocking future value creation. As we look ahead, our strategic priorities remain very clear. We'll continue expanding our integrated cold chain product and solution portfolio, tailing high-growth product categories, strengthening our distribution and service network, improving operational efficiency and deepening our presence across domestic and international markets. Our objective is very simple and clear. We want to build a future-ready repetition products and solution enterprise that delivers sustainable growth, operational excellence, customer delight and long-term value creation for all stakeholders. With that, I will now request our Chief Financial Officer, Mr. Ankit Patel to take you through the financial performance for the quarter and the full year 2026. Thank you.

Thank you, Srinivas. And good afternoon, everyone. I'll briefly walk you through the company's financial performance for Q4 FY '26 and the full financial year '26. For the fourth quarter ended March '26, Ice Make reported consolidated revenue from operations at INR 255 crores plus, representing a robust 41.8% year-on-year growth compared to INR 180 crores reported in previous Q4 FY '25. On a sequential basis, revenue increased by approximately 66.8% over Q2 FY '26, reflecting strong order execution and project deliveries during the quarter. For the full financial year FY '26, consol revenue stood at INR 668 crore plus compared to INR 479 crores in FY '25, registering a growth of approximately 39.3%. Moving to profitability. Our EBITDA for Q4 FY '26 stood at INR 21.77 crores, while EBITDA margin was 8.5%. For full year FY '26, EBITDA stood at INR 46.04 crores and EBITDA margin at near 6.9% compared to 9.1% in previous year. Profit after tax for Q4 FY '26 was INR 9.5 crores and full year PAT stood at INR 5.13 crores. The moderation in profitability during FY '26 was preliminary due to investment explain the other investment in building multicapable standing today its 1 of the costs related to growth initiatives, expansion and distribution network, some brand building and market development activity goes in some of the energy labeling transition BIS compliance, that was one-time and some other related expenditure related to labor low. Compliance was also there. Too high depreciation was also there because of our past CapEx. This investment was strategic in nature, aiming to build long-term growth stability. Few of the onetime expenditures was somewhere around INR 4 crores. We are aiming for INR 1,000 crores top line in the near future. So capacity building and market penetration is very essential at this stage. The Board has recommended a final dividend of INR 2.25 per equity share subject to shareholders' approval. And overall, we remain confident about the company's financial strength, balance sheet position and liability to capitalize on emerging opportunities. With that, now I invite Mr. Nikhil Bhatt, Vice President, Strategy, to provide an update on business development and growth initiatives. Thank you.

Thank you, Nikhilji. FY '26 was an important year for Ice Make as we strengthen our market position, expanded our product portfolios and build a stronger foundation for future growth. Our growth was broad-based across geographies. The Western region remained our largest market, while the Northern region emerged as the fastest-growing region. The Southern and Eastern regions also delivered healthy growth, reflecting increasing acceptance of the Ice Make brand across India. Beginning the year, we continued to strengthen our customer reach and market bridges. We expanded our retail footprint through new brand outlets in various parts of the country, enhanced customer engagement initiatives and actively participated in major industry platforms such as trade-related situations for India. Looking ahead our focus remains on expanding our integrated affiliation and on solutions portfolio, scaling new product categories, strengthening distribution and service infrastructure, improving operational efficiencies and increasing our presence across domestic and export market. With a diversified product mix, growing market opportunities, strengthened leaders has a held order book of around INR 237 crores is in line, we believe Ice Make is well positioned to deliver sustainable growth and create long-term value for all stakeholders. Thank you.

[Operator Instructions] First question is from the line of Kanesh Gupta from SS Family Office.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Am I correct?

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Next question is from the line of Tej Patel from Niveshaya.

Congratulations on a good set of numbers. Sir, is it possible to provide split for business segments for this quarter or full year [Foreign Language] with these numbers?

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Okay. Okay. [Foreign Language]

[Foreign Language]

[Foreign Language] can this margin improvement also come at gross margin level because sourcing [Foreign Language] if you can take time on this and explain [Foreign Language].

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Great. Great. [Foreign Language]

Current year?

Yes, yes.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Understood. Great. Great. Sir, 1 more question. I just wanted to understand that, that is also, of course, [Foreign Language] we have grown really well in [Foreign Language] Just wanted to get the understanding [Foreign Language] Just trying to understand [Foreign Language] which have played good -- well for us.

So we are a new entrant in the market. I think that that's 1 reason that I think we could probably get that initial interest and traction until we have an excellent brand equity in the Western region. Our seating has started from Western region. So the customers confidence that I expect brand is pretty good. So I think that enabled us to place the deep freezers and vizi coolers in the market very effective numbers, okay? So you're right, while the industry has degrown not degrown at least to the same level, but we managed to get good numbers out of this business because we are the first player. Obviously, there's an interest in the new player coming up and that from a reputed brand.

Right, right. Do you see this demand continuing? Or let's say, we have been almost 2 months into the next financial year, how has it been the demand because [Foreign Language]? How is the demand right now? Are we getting more incremental business from the same dealers? How is the scenario right now?

No. So April and May, we have seen a good traction and we'll have to watch and wait the June, and we hope to continue the momentum. And anyway, you know that our base is low. So obviously, we will definitely post excellent growth in this business.

Got it. Got it.

[Operator Instructions] Next question is from the line of Raj Agarwal from CJ Shah Family Office.

[Foreign Language] this will be like a greenfield, you wll acquire something? [Foreign Language]

Actually [Foreign Language] there are various things in this consideration. [Foreign Language] how we will go about it. [Foreign Language] then we will be able to answer it perfectly. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Sir, last question. [Foreign Language]

[Foreign Language]

Okay. [Foreign Language]

[Foreign Language]

Next question is from the line of Kush Baruch, an individual investor.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Okay. [Foreign Language]

[Foreign Language]

[Foreign Language] So at that time, you had put up some trade discounts and all that. So have you grown over that pay discount and now have you increased pricing out there? [Foreign Language]

Yes. So being in the first year of operation, we definitely had the aggressive pricing to penetrate the market. Now that entire network has stabilized, and we will be able to get the benefit out of our stabilized network in the coming years for sure.

So have you increased the pricing?

Yes, of course. We have done -- we have done 2 rounds that we in the commodity inflation. And that's a continuous process we follow anyway.

Now the thing is that you have always been talking about top line top line being INR 1,000 crores, you are trying, that's your target. So if you were talking of the top line being INR 1,000 crores, what do you think your bottom line would be?

So our EBITDA guidance has been in the range of 8% to 8.5%, but we even would work internally to stretch up to beyond 8.5% also. That's been the work that we will get on this year and next year.

And INR 4,000 crores top line, we are planning, maybe we can be near or in a double digit.

Okay. That's nice. And tell me 1 thing, if -- I mean, with the numbers that [Foreign Language] not really so conducive to your dividend. So what was the thought process of giving a dividend?

[Foreign Language] point of view, there was one-off plan things that [Foreign Language] We feel that profit generation from that existing business or vertical that was pre-decided [Foreign Language].

[Foreign Language] So would it be in the range of this year -- next year or so in 2027. So would we be stretching to 2028?

[Foreign Language]

I got the point what you're trying to say.

Next question is from the line of Mehul Panjwani from Forty Cent.

[Foreign Language] Can you break it up how it will be spread across the 2 halves, H1 and H2?

[Foreign Language] with the increased top line. Industrial refrigeration, as usual 2%, 3% [Foreign Language] 10% to 15% [Foreign Language]. These are about traditionally top stop margin contributing vertical. Transport refrigeration of 5% to 7% [Foreign Language]. Ammonia along with the project can contribute somewhere around 10%, 15%. And [Foreign Language]

[Foreign Language] how would you -- would H2 be better than H1?

[Foreign Language] We are quite confident.

Right. Sir, [Foreign Language], right?

INR 237 crores. Right.

[Foreign Language] How are you positioned for the rest of the order because if you want to hit INR 850 crores, how are we placed?

[Foreign Language] The rest of the things are [Foreign Language].

[Foreign Language] Do you have repeat customers or you have rest set of customers every month?

A lot of customers [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Yes. So you know the war impact is obvious and any supply chain issues. So one could be an availability and one could be on the price. But I think we have been able to mitigate the impact of the world, especially the availability side. So we did some buying and front loading of the raw material so that helps us save the situation. So we're not really worried about the availability part. But you actually said that the impact of -- the impact on the price special inflation, it will be there, okay?

[Foreign Language] which raw material are we exporting, sir?

No. So this is the raw -- yes, raw material, which we are taking is essentially the chemicals of chemicals, and the steel anyway is ranging material only. We don't import steel, but compressive steel is imported. Some of it is India. So the impact of supply chain comes on in this broadly are the 3, 4 categories.

And sir, would we be able to pass on the pricing or price rise to our customers?

Yes, we have done it already in fact. In the month of April 1 week, we have done the price as to the market.

Right. And sir, 1 of the gentlemen asked the question earlier that how much of order book is from e-commerce. So what does it mean? Are we supplying to e-commerce. Can you just throw some light on this?

So I mean all the e-commerce players, they build their dark stores, okay? And the dark stoors required the cold chain equipment in terms of the cold rooms and some of the repreciation equipments placed to be able to serve their customers. So the business comes from that particular demand of e-commerce.

Right. Right. And how much of our business is from cold chambers required for the e-commerce?

So we managed to get about close to roughly 30% to 14% of our last year top line from acute commerce segment.

And I'm sure that this will increase in the coming years.

Yes. So our effort will be to increase our share of wallet from these customers and also adding more customers. So we -- our efforts are there to drive higher sales from the e-commerce segment.

Next question is from the line of Mahesh Atal from Barrier Investment Advisors.

Sir, what benefit or incentive does a dealer see when he buys a commercial freezer from your company rather than buying it from the likes of Voltas or Western? I could say that there is a lot of traction that you're getting on ground from the Tier 3 cities also. So if I may ask you what the incentive that dealer sees in buying your freezer?

So gentlemen, that depends on the market to market. But if I have to give you a particular simple typical case, the dealer incentives span from the discounts on the product pricing itself, and some discounts in the form of a marketing promotion scheme, some incentives in the form of the brand promotion itself. So we across the country, we've also developed the brand shops to be able to promote...

My question is a little different. What I want to understand is, when I decide to buy a freezer, why should I buy Ice Make? Why not Voltas or why not Western? What does a dealer has been that...

You're asking about a U.S. PFG product, right? Is that the question, right?

Yes, kind of. Yes.

So you understand that we have a long pedigree. We have about 35 year old in the company, and we are pretty strong in the Indian market in terms of our brand salience and the reliability of the product range. We are #2 in the cold room space. So that gives us the right to win in the customer mind. So I think that's the reason probably our products are well traction in the market.

At price point level, are we similarly placed with the brands with other banks?

More or less, depends on the market, for example, in Western markets, were less model the same, but in the markets where we want to penetrate probably our price points would be slightly lower than the competition.

And on the panel side, I think when we started this business, we said there's a lot of demand that you see on the panel side. So is that statement still holds good in this environment?

Yes. You are saying that our continuous final business, how we see the demand, right?

Yes. I mean when we started this, we were thinking that the on the West and side and maybe for the eastern side and now there'll be used demand. Are we still on that statement only that there you demand to be very active?

Yes, absolutely, yes. Our underlying assumptions when we set up this plant continue to remain hold good.

[Operator Instructions] Next question is from the line of Shashi Ranjan from Ananda Capital.

Two quick questions, growth in ammonia vertical and the ROC that we are expecting going forward in the next 1 year?

Project in ammonia business, we are targeting -- our traditional target is also not in 20% of our top line. But we see that maybe near about 15% or odd, some here and there. our next year target would be somewhere around 15% or max to max 20%, not more than that. And the second question on ROC. So recent in past year, we have maybe the CapEx we have not done in the past 10 years, we have concluded in last year. Hello. Sorry. Okay. So the CapEx, which we have done over the last year is more than we have done in the last 10 years. So maybe you do that the cost depreciation and the new capabilities, CapEx-related costs, our ROC is down, but we are aiming to achieve it near about 20%, more than 20% let's say, not immediately in the very next financial year, it will drop. But internally, we are aiming that it should be near about 25%. If we maintain, then it will create very good value in the eyes of investors. But it's typically CapEx-related thing. So once we do investment, maybe after 2 years, there will be a book action of -- for ROCE and ROE. And if we do huge CapEx, then it will take some couple of years. So maybe after 2 years, it may be in a good momentum. But for 2 years, I believe, slightly it will be improving towards 20%.

If I may just squeeze 1 out because I think we're running out of time. I see that there is an increase in the plant in machinery and CWIP by double-digit crores. And there is also a doubling of right to use of the assets that is there. Can you please enlighten us where these plant and machinery CWIP and right to use has been pushed in?

The 1 thing is we have shifted to a new plant in new financial year. In Bharath Refrigeration, we have implemented -- we have taken new machinery, new premises as well. So the CapEx over there is currently shown in CWIP. Further, we are also developing a corporate office. So the expenditure, it is still under consideration and maybe this financial year end, it will get completed. So expense related to debt is being shown in CWIP. And so far as ROU, we have taken 1 warehouses for CF vertical that we have also specified in our earlier that we are enhancing our distribution and base network. As a part of it, we have taken a big warehouse and from where we are dispatching our related products. So ROE is pertaining to that warehousing cost. It's a long-term lease agreement, will be somewhere around 7 years.

Next question is from the line of Kanesh Gupta from SS Family Office.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Sorry?

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] but then we don't know how the situation will be. [Foreign Language]

And Mr. Reddy, would you like to add something on top of this?

No. So I would only give you a little more concern on the Indian story because India is very strong on the consumption side. So we don't expect any demand side challenges. So I think the -- like Ankit has explained, there could be challenges related to supply chain, inflationary-related impact on the financials. So that's the only thing that the challenges see at this point in time. Otherwise, demand side in terms of the revenue growth side and all that, we don't see any challenge at this point in time. And all fundamentals are in place now. So we are now good to have very widespread dealer network. So I'm sure in this year, we'll be able to take the benefit out of the expanded network.

And sir, lastly, sir, management's openness, were to raising equity capital. So how should the investors think going forward about the preferred capital structure? And what would be the upper limit for the debt-to-equity ratio beyond which if management would be uncomfortable of increasing leverage?

[Foreign Language] We cannot comment at this point of time. [Foreign Language]

[Foreign Language]

[Foreign Language]

Next question is from the line of Naman Desai, an individual investor.

Am I audible, sir?

Yes. Please go ahead.

[Foreign Language] I just wanted to understand vizicooler [Foreign Language]?

So currently, our product portfolio consists of starting from 100 liters to 1,600 liters approximately. There are 2, 3, which get cater to the Coke and Pepsi and Campa of the world. So there are 2 types of markets that we see in vezi. One is the sponsored market, so sponsored assets, which are essentially sponsored by the Coke, Pepsi or Campa, which are done from their bottler side. And second market that is address of the market for Ismael retail market, that what we call is a nonsponsored market. So that's the market that we are addressing right now, which means the typical convenience store person invest is on unit asset and then buys from brands like us. So that's the deal market. In fact, last season that we have seen an excellent traction for this cooler. So we are now -- this year, we'll be investing in strengthening our portfolio in cooler side. So I'm sure we will be able to tap better share of the nonsponsored asset categories in the busy coolers in FY '27 and FY '28.

And another thing, sir, recently in first June, I guess Amul made an announcement regarding INR 600 crore investment in West Bengal. They're putting up some dairy plant. So we're looking forward to some orders from there. I guess you already have a subsidiary in place for that region, correct?

See, Amul has been our strong customer being based out of Gujarat. We do a lot of business with me, of course. So this relationship with Amul will continue, and it's a good news for the country, good news for Ice Make as well. that they were expanding in the Eastern region. So Eastern region, we are pretty strong in terms of our market presence through our various products and solutions. So that's a good news, of course, indeed for us.

Next question is from the line of Tej Patel from Niveshaya.

I just wanted to understand right now a number of dealers are spread between regions if you could provide this, that would be quite helpful. In terms of sales as well, for the new business, for the CF business, what was the region wise sales?

So I would give you in terms of the percentages, roughly about close to 60% of our revenue, 55% to 60% of our revenue comes from the Western region, right? And 13% to 15% is shared between North and South. So the key point that we want to share with you is that our traction in the other markets, of course, we are pretty strong in Western region, but our penetration in North and South is also very aggressive in the last summer. I mean the current summer that we are going through on. And I'm sure our share of business from Northern South and West will be aggressively seen in the next financial year as well. I mean FY '27 as well.

Great. In terms of dealer spreads, I mean, number of dealers in terms of region, how they are spread?

So this follows more or less the ratio that I have said in the comes to the revenue. So usually, the number of dealers is directly functional to the revenue that we generate. So more the dealers in a particularly obviously, show business is going to go up from that.

Got it. Got it. And just 1 assurance 1 point. You said the West Asia has led to 2 things. One is availability and one is cost. On our availability, you are sorted, you're saying probably you have enough inventory of the raw material for, lets say, coming few quarters. Just wanted to understand cost. You said we are probably netted off by increasing the prices in the first month of April. Is it right to assume most of the incremental cost due to, let's say, whatever is happening right now is kind of a negative of this price increase? Or we will see some impact on cost due to the incremental prices of, let's say, copper, ammonia gas?

Yes. So this is a serious problem for the industry in general, just not for Ice Make. So there is a level playing ground as far as Ice Make is concerned. So obviously, every player would have been taking the prices. So that's the first answer my side. Second thing is like in terms of the quantum of pass-through, I think we have tried our best to pass through the quantum of increase that we are impacted with, but we continuously review our competitive market positioning, and then we take calls on a weekly basis on the price part with respect to the realization that we gather from the market.

The next question is from the line of Rakesh Khosla from Tanish Technical Investment.

[Foreign Language] One of them could have already been answered by you. [Foreign Language]

[Foreign Language] So that payment has already been started. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] How you insistive about it?

[Foreign Language]

[Foreign Language]

Next question is from the line of Mehul Panjwani from Forty Cents.

[Foreign Language] Am I missing something, sir?

[Foreign Language]

[Foreign Language] Is that correct?

Near about. [Foreign Language] Slightly better [Foreign Language]. Yes.

Next question is from the line of Kurshit Barucha, an individual investor.

No. I think gentleman before me had answered the question right? So I had canceled this thing. My only question was the same thing. When do you think the company will become debt-free. And I guess he's answered that. And are we shifting towards internal accruals in when we make more CapEx after that? That was my only question, but I guess he's answered this.

Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. C.P. Patel, Chairman and Managing Director, Ice Make, for the final thoughts. Over to you, sir.

Thank you, everyone. FY '26 has been a year of transformation and strategic investment for Ice Make. In line with the Make in India vision, we continued investing in manufacturing capability, product portfolio expansion, distribution network, strengthening market development initiative and leadership enhancement to position Ice Make as a comprehensive end-to-end PS product and solution company. The strategic investment undertaken during the -- along with higher depreciation arising from newly commissioned assets, increased finance costs related to growth initiatives and sharing time was a which in the port implementation, energy transformation and other growth-oriented program impacted profitability during the year. However, this investment has been made with a long-term perspective. We have intended to strengthen our competitive positioning, improve education for publicly, deepen customer reluctance and in this return. As utilization levels into and mission investment began to meet mature, we expect operating leverage to support profitability improvement over the medium term. The long-term opportunity remains extremely compelling. India's cold chain infrastructure requirements continue to expand rapidly, driven by food processing, pharmaceutical, agriculture, logistic and industry development. We remain confident on demand foundation built during FY '26, will support sustainable growth, strong profitability and long-term value creation for our shareholders. I thank you in investors, analyst, customer, employees, partners and stakeholders for their continued trust and support. Thank you.

Thank you very much, sir. I now hand the conference over to Mr. Mandar Desai, Compliance Officer, for his closing comments.

Thank you, everyone, for joining the conference call. We look forward for the next conference call after the first quarter results. Thank you.

Thank you, sir. On behalf of Ice Make Refrigeration Limited and Ariana Matasco. That concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

Thank you.