IFB Industries Limited (IFBIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '25 Earnings Conference Call of IFB Industries Limited. [Operator Instructions]. Please note, this call is being recorded. I now hand the conference over to Ms. Teresa John. Thank you, and over to you.

Thank you, Harshi. On behalf of Nirmal Bang Institutional Equities, I'd like to welcome you all to the 4Q FY '25 Earnings Call of IFB Industries Limited. The management today is represented by Mr. Bikramjit Nag, Chairman; Mr. P.H. Narayanan, MD Engineering Division; Mr. C.S. Govindaraj, ED Manufacturing of the Home Appliances Division; Mr. Soumitra Goswami, CFO; Mr. Jayanta Chanda, CFO of the Engineering Division; Mr. Kartik Muchandi, Head, Finance and Accounts, Home Appliance Division; and Mr. Ranjan Mohan, National Sales Head, Home Appliance Division. I will now hand over to the management for their opening remarks, after which we'll open up the floor for Q&A. Thank you, and over to you, sir.

Good afternoon, everybody. I am Soumitra Goswami, the Chief Financial Officer of IFB Industries Limited. I welcome you all for IFB Industries Limited Investors Call for fourth quarter of the year FY '24-'25. I have with me Mr. Bikramjit Nag, Chairman of IFB Industries Limited; Mr. P.H. Narayanan, Managing Director and Chief Executive of our Engineering Division; Mr. J. Chanda, CFO of our Engineering Division; Mr. C.S. Govindaraj, Executive Director Manufacturing of our Appliances Division; Mr. Kartik Muchandi, Head of Finance of our Appliances Division; Mr. Ranjan Mohan Mathur, Head of Sales of our Appliances Division. Now I will inform you about the quarter 4 results. Revenue for the quarter was INR 1,312 crores against last year, INR 1,067 crores with a growth of 23% and in value term the growth amount is INR 245 crores over last year. PBDIT for the period was INR 69 crores and its percentage to revenue was 5.29% as compared to last year's INR 54 crores, which was 5.10% on revenue. PBDIT amount came across a growth of 28% year-on-year. Fixed expenditure for the quarter was well behind budget. PBT for the period was INR 29 crores against last year's figure of INR 16 crores, growth of 81%. Q4 PAT was INR 22 crores as compared to last year's INR 14 crores, which is a growth of 57% (sic) [ 61% ] over last year. Figures of YTD March '25 period are the following: Revenue for the YTD period was INR 4,977 crores against last year's INR 4,344 crores, with a growth of 14% (sic) [ 15% ]. In terms of value, revenue growth for YTD period was INR 633 crores. PBDIT for the period was INR 325 crores and in percentage to revenue was 6.5% as compared to last year's INR 240 crores, which was 5.5% on revenue. PBDIT amount came across the growth of INR 84 crores, which is a growth of 35% year-on-year. PBDIT growth is attributable to higher revenue...

This is the moderator here. Mr. Goswami, sir, can you use your handset mode, please? Your voice is not very clear.

I am only talking in the handset only.

Okay. This is a little better now, sir. Please go ahead.

Revenue for the YTD period is INR 4,977 crores against last year's INR 4,344 crores with a growth of 14% (sic) [ 15% ]. In terms of value, revenue growth for YTD period was INR 633 crores. PBDIT for the period was INR 325 crores and its percentage to revenue was 6.5% as compared to last year's INR 240 crores which was 5.5% on revenue. PBDIT amount came across a growth of INR 84 crores, which is a growth of 35% year-on-year. PBDIT growth is attributable to higher revenue, which is, fixed expenditure maintained behind budget. PBT for YTD period were INR 171 crores, which was 3.4% on revenue as compared to last year's INR 90 crores which was 2.1% on revenue. Growth in PBT was INR 81 crores; and in terms of percentage, the growth was 90%. PAT for the period was INR 129 crores, which was 2.6% on revenue in comparison with last year's INR 69 crores, which was 1.6% on revenue. Growth in PAT was 87% and value growth was INR 60 crores over last year. With this, I will request to start the question-and-answer session.

[Operator Instructions]. We have our first question from the line of Shreyansh Jain from Swan Investments.

Sir, my first question is, sir, when I look at your washing machine's business, that has been a little tad weaker than RACs. So just want some sense on how are we looking at that product category, sir? How is the industry doing? Just some sense on that?

So the industry in front loaders has been stagnant. And overall, if you see, we have in the addressable market, we have gained a share of around 1.5% to 2%. But the fact of the matter is the industry has not been growing. And particularly, up to 10 kg, there was a degrowth observed. So there is a shift towards high end. But overall, if you see the industry growth in terms of front loader has not been there.

Okay. And sir, from what we understand, 50% of the market and about 15%, 20% is about semi-automatic and top load. And I think, we are -- we don't do semi-automatic and we are slightly weaker on the top load side. So any sense -- I'm trying to understand, do we, going forward, plan to enter semi-automatic in a big way and top load as a category has been growing at 15%, 20% is what we understand from the channel. And we were largely a late entrant in the category. So do you think we would need some kind of push to actually capture market share in those two categories?

So in top loaders, after the launch of the new series, which we launched last year, our growth in, say, fourth quarter was around 27% against the industry growth of, as rightly said by you, of 15% to 16%. And we have again gained around 1.5% to 2% market share in that category. And for us, the range of top loader are fully automatic, and have started moving. And month-on-month, we are able to sustain good volume, reasonably good volume, but there's a lot of scope in this, and we intend to tap that market. With regard to semi-automatics, we don't have any intent to get into that market -- that segment.

And sir, there's a comment in your presentation where we're seeing customers are upgrading to higher capacity machines and companies are actually offering higher capacity machines at similar price points erstwhile, right? So I'm just trying to understand this whole comment and your hiring of A&M for cost-cutting. So do we envisage a situation where gross margins now will actually tend to be lower versus historical gross margins? Because I think one of your previous calls, you've also mentioned that our products are overengineered slightly versus competition. So in all of this, how do we look at gross margins for the washing machine bit going forward?

Kartik, you can answer that.

The gross margins are similar to what it was earlier. It has not reduced in spite of the pricing issues. But as far as A&M is concerned, our project is on track. We started on 15th February. The idea banks have increased substantially. And what we expect is that out of total INR 200 crore cost reduction in material costs, approximately INR 80 crores will come in our P&L in FY '26.

How much, sorry? I lost you.

INR 60 crores to INR 80 crores out of total INR 200 crore cost innovation in material costs, which will come over next 18 months, INR 70 crores to INR 80 crores will come in P&L in FY '26.

Okay. And sir, this...

Kartik, his question is what are you doing to increase GP?

Yes. Okay. To increase gross margin, we are working on two fronts. One is sales volume increase, which is being already done by the sales team. Second is we are trying to increase the MOP in the market. There are areas where there is opportunity to increase the market price, which is the [ sales ] price. We are also working on reducing scheme payouts. And third thing is, we are working towards reducing bill of material costs.

Okay. And so all of this INR 200 crores actually should come from COGS or do you think there is some bit of leverage on the employee cost and the other expenses line item?

Kartik, can you please explain to him, we have discussed these points. You have only presented it to me. There are various items you are working on, one of which is material cost, please tell him clearly. The figure is minimum INR 200 crores. We expect much more. This is being worked on with Alvarez & Marsal. One of the investors itself has told us why aren't you giving it to an outsider, why try and do it internally, the internal project took us -- we have actually wasted time by not going to an outsider first after. Now that we've gone to Alvarez & Marsal, the things have been clearly laid out by them and our team, which is working as a joint team. Minimum INR 200 crores we expect to get. I think we'll get much, much more. Out of the INR 200 crores, around INR 80 crores should come in by 31st of March. This is on material cost. Then Kartik, can you inform them, what are you doing on fixed cost? What are you doing on other costs? And explain to them item-wise so that they're clear.

Okay. The second point is on indirect cost. We are working on freight and warehouse cost optimization. Today freight is almost 3% of our cost. We are working on route optimization, reducing the number of warehouses, space reduction through this...

Please tell him, how much? How much are you expecting from each point? Just list that.

Yes. Through this projects, we are expecting to reduce the cost by almost INR 20 crores. And apart from that, we will start working on -- we have made a team to reduce the fixed cost. The way we have made a material cost reduction team along with A&M. So now we will have an internal team to work on fixed cost and our aim is to reduce fixed cost by INR 6 crores per month. Currently, our fixed cost is around INR 75 crores per month. Our aim is to reduce it by INR 6 crores per month, which will start coming in by end of quarter 2.

Okay. Okay. That helps, sir. Sir, my second question is on the AC business. Now that we hit about INR 900-odd crores of annual run rate in ACs. What kind of the traction -- I mean, the kind of confidence you have in the category for ourselves and for the next 2, 3 years, should we actually look at strong double digits and INR 1,200 crore, INR 1,500 crore kind of a target? And second is, can you help us with the volumes that we would have done in Q4 or for the full year just in the RAC business, sir?

Mr. Mathur, can you please take this question?

What was the question, again?

They are asking the volume of AC of quarter 4 and what are the -- Kartik, you can answer. No, Kartik, you can answer.

On volume, I will answer. During the quarter, in IFB brand, our sales was 130,000. And in OEM, our volume was 53,000. So in IFB brand, as far as the volume is concerned, there was a 52% growth. And in brand, since the base was low, so in OEM, the growth was high.

Kartik, say it again, how was the quarter 4 figure?

Quarter 4, we did 52,000 in brands -- sorry, quarter 4, we grew by 52%. And in quarter 4, we sold 1,30,000-plus ACs in brand and around 52,000 in OEMs with our growth of almost 100%, because the base was low. So that is what it is. And we were able to gain some percentage of share in the market.

And sir, how much volumes would we have done for the year? Because I think we were targeting about 4.5 to 5 lakh AC sales in 2025. So how much have we ended the year with?

So we have touched the volumes which we were targeting.

Okay. And so now what is the outlook for the next 2 years for this business?

One minute, please. Ranjan, they asked the question what is the volume you've got till 31st March. Why don't you answer the question?

So in all, we've done 4 lakh...

Till 31st March, how much did we do brand? How much did we do OEM? Just answer, it's a simple question.

Sir, we have done like 342,000 in AC IFB brand and 61,000 OEMs.

What is the total, Kartik?

Yes, 400,000.

Sir, total was 4 lakhs, total. We did 4 lakhs.

We don't give any like guidance, so we can't give a target for the year. But we are expecting robust growth for this year also.

Okay. Okay. And sir, last question is on the refrigeration bit. So in the presentation, we are targeting, you said, about 7.3 lakh units for the year. So ideally that is about 50,000, 60,000 run rate for the month. So...

7.3 lakhs, where have we said that?

Sir, in the presentation from 2.5 lakh, we target 7.3 lakh.

Okay.

So I'm just trying to understand, that's a run rate of about 50,000, 60,000 a month. And historically, we've been able to do 35,000 a month. So how confident are we about this...

Historically, we've done less than 35,000 a month. But if you see, I think from the month of Feb -- Feb, March, April, May, we have done more than 35,000 a month. And we touched close to 50,000 on a few months, and we are by and large confident of this. Our problem if you see is that AC is doing better, refri is doing better. FL sales stagnated, that has become the problem.

We'll take our next question from the line of Anand Mundra from Soar Wealth.

Sir, I wanted to understand this INR 180 crores or INR 200 crores of cost reduction. Why it can't be done only in FY '26? Any specific reasons for that?

Yes. Because what happens is when you go for material cost down, certain things need time for validation. So certain validation takes a lot of time. So we can't just replace something with something else without the proper engineering process [indiscernible] so that takes time.

So it will happen slowly and by -- on run rate basis, it may be much higher by Q4 of FY '26 in terms of savings?

By the run rate, yes, it should be higher.

Okay. And sir, what is the profit and loss of our AC segment for FY '25?

FY '25, AC has made -- Kartik, I think you can give the figures, because it's all out now. It's EBITDA-positive.

Yes. It is EBITDA-positive 1.7...

But in FY '25-'26, our expectation is we'll do much, much better. Now that we've turned the corner from loss to marginal profit, we now need to take it to a much, much better financial level.

Okay. Sir, if I remember correctly, in FY '24, the losses were much more than INR 70 crores, INR 80 crores annually?

FY '24, loss in AC?

Yes, correct.

Yes. AC loss was significant.

Yes. So if I adjust that, our profitability in Other Home Appliances segment has really reduced in FY '25, is that the right assumption?

Yes, because in FY '25, what has happened is, material costs went up in FL, et cetera, which sort of took us by surprise. And FL volume did not rise to the desired extent. So FL volume did not go up, AC volume went up, which is a lower margin thing, and there, we got into a problem.

Okay. Noted, sir. And sir, what is your profit and loss of Refrigerator segment in FY '25?

FY '25 refrigerator EBITDA...

Refrigerator was EBITDA positive.

In FY '24-'25, refrigerator was EBITDA-positive as compared to last year's loss. I'm not giving the figure here, but it is EBITDA-positive, FY '24-'25.

Okay. That is nice to know. So sir, given the fact that both the new segments have become profitable. And overall, we expect to do some cost savings in FY '26. Do you think there is a possibility we may hit 10% EBIT margin -- EBITDA margin sometimes in next year?

As I had said -- this is Bikramjit Nag here. As I said quite some time back in its -- and we're not at all happy that we're not able to achieve the double-digit margin as yet. But the cost reduction programs we've taken across various heads leading with material cost, fixed cost, logistics and warehouse and other costs. Our total savings from all of these should exceed, our belief is, INR 350 crores. Now a significant portion -- a lot of it should come in this year, but a lot of it will also come in, in the first 6 months of next year. All of this will help us to move towards double digit, which includes fixing pricing in the market, which means reducing discounting and getting better outcome of our schemes. All of this should lead to margin -- required margin.

So sir, last question on CapEx. What is our guidance on CapEx for FY '26? And there are no new products which you are planning to enter, I guess, because you are already in all the large four segments.

Yes. But the main CapEx will be on areas such as Washing Machine for 12 and 13 kilo washer. Maybe we go for 14 kilo also, we're not sure as yet. But in Appliance division, CapEx is between INR 100 crores to INR 130 crores to be spread out. And in Engineering division, CapEx is also quite high. Normal CapEx would be around INR 45 crores. And then for new projects, for example, Chain. Chain as a project for motorcycles, which we used to import from China. Now with the China BIS issues, et cetera, Chain as a project will need to be brought into India. We have 1 year time to do this, maybe we get some extension also. But assuming we have to do this, that will entail about INR 40 crores to INR 50 crores at the most. And then we have the electronics manufacturing, which is with Titan. We will do some things with Titan. Titan, as you know, we're doing projects for some global mobile phone companies, et cetera. So we've got some contracts from there. That will entail some CapEx. So overall CapEx for Engineering as a result of this Chain, et cetera, has also gone up.

Okay. Sir, I missed one item. INR 120 crores of which segment for white goods?

Some for AC, about INR 20 crores, INR 25 crores for AC. I think Mr. Govindaraj, for INR 25 crores, INR 30 crores for AC, balance for washer, right? And some routine CapEx is there for maintenance.

Correct, sir. INR 50 crore for washing machine and then INR 35 crores for air conditioners.

And the balance for routine CapEx, right? With the total of the INR 120 crores?

Yes.

We'll take our next question from the line of [ Vivek Kumar ] from [ Bestpals ] Advisory LLP.

Sir, I was just thinking about your company from competition perspective. Because you, as a promoter, would be having some assumptions before introducing so many products when so many other companies are trying to get the same market. So how do we plan to achieve market shares in AC and refrigerators, where we are already not in the forefront, and how do you get the market share in the distribution? So if you can help us understand your assumptions of why, I understand you have done very well in washing machines and micro ovens. So how should we think that you'll be able to...

Actually, if you see from the volume perspective, what has surprised us is the traction we are getting now in refrigerator, which is more than AC in some ways. We expect very, very shortly refs to stabilize at 55,000, 60,000 a month. In refrigerator, we are now only playing up to 285 liter. And soon, we'll launch the 326 liters or something. So at the higher end, we are still not there. So refs, we really see very good potential. But our CapExs are only done up to 326-liter. And we expect that this thing of around 60,000 a month, we should be able to do very soon, which will make financials of that company strong. More importantly, in AC, we believe our market share is still very low. And therefore, your question on how do we increase market -- market share, sorry, it is only by ensuring that our people in every town are selling to every dealer in that town. There is no other way to do this business. It's a town-by-town business, dealer-by-dealer business. And the dealer counter has to be manned very well. Our overall effort to man a counter properly to sell washing machine, AC, refrigerator, microwave. This whole management effort to get this done is not as good as what it should be. It's not as efficient, sorry. It's not as efficient as it should be. In LG, Samsung, it is very, very efficiently done. They're the only two companies which really do it well. And they are the companies we should actually benchmark in terms of efficiency of manning. This is something we need to work on. And we see that wherever the refrigerator and AC is being placed, a counter where it's placed and manned properly, we are able to go in. Now suppose in a counter instead of four, five ACs, we've only put in two ACs and two refrigerators, neither the two ACs sell, neither the two refrigerators sell. You have to have the whole -- the entire range or at least substantial part of the range for the customer to get attracted. This process is weak in IFB. This process has to be strengthened, and a lot of time is going into manning properly in order to do this. Now I know we've said this quarter-after-quarter, year-after-year, but it has not happened the way it should happen.

Yes, so my question is exactly that, let's say, you get the whole range and you man, but there are other companies also doing. So what is that in your assumption, which is giving you confidence? Is it market is so big for many players that we have...

The market is big. I think, the market is big, but I think IFB history of being known for quality is helping. Wherever we are able to place and the person is good in the counter, the dealer is supportive because of quality. And the counter sales person is able to explain IFB's quality proposition, value proposition to the customer also and that is helping.

Is it any regions that you're doing well and any regions you're not in well, sir? Or is it across the same or at least there are a few regions where you've got this manning and range correct and you want to replicate it? So...

Yes, I think the region where we were historically strong, but now weak because of manning issues is South. And South is the largest market. We need to do a lot, lot better in South. And with the -- and now I think it will take another 2 to 3 months to fix South. I think South is...

South is, at least, per capita wise 50% higher than the rest of India. So it should be -- if you can -- if you neglect South, it will be a big market.

Correct. Yes. So in South, we had some management issues where we execute some people, et cetera, et cetera. We've got some vacancies there. Those need to be filled up faster.

So is there any area where you are very strong and doing well, sir, where the growth is coming from?

I think we are doing much, much better in North compared to South, for example. But in North, for example, if you take UP as a market, the way we should be doing refrigerators, AC and all in UP, which is a very well -- which is a very large state, et cetera, where distribution really plays the key role. We've not done well in UP. But we've done much better in Haryana and Rajasthan, and parts of Delhi and we've done better in Chandigarh region, which is Chandigarh, Punjab, we've done well there, but we've not done well in UP. So you know...

Sir, sorry, but you're saying the same problem, you have only been mentioning that this problem we have from few years. So is there -- is it surmountable or are you facing some structural issues that you're not -- you are prolonging -- this is getting prolonged for us, this manning and...

No, there's is no structural issues per se. I think, we've not got the manning that we need. And what we've realized is wherever we are able to put in our own home-grown trained people, we are doing better. Whenever we are taking people from outside, we are having issues. But so many people internally also, we don't have to take up leadership roles. So we are having an issue there to match this.

And you think it will get solved, sir, over a year or so or it will take more time? It will take few years before we solve it?

No, no. I mean, honestly, I hope this does not take too much time. We can't afford this time. We are already delayed. So a lot of -- so we are, for example, now uplifting people to leadership roles, even some within a state, let's say, instead of the State Head. Some people we are giving part of our state, et cetera, who have been with us for a while. These decisions, we are moving faster on now. I would say that. And I think this will have a long-term very, very beneficial effect on the company to grow its own, like, talent pool. But we have...

So IFB, we can say -- sorry, sir, go ahead, sir.

No, that's it. That's it from my side.

So IFB we can say that AC, refrigerator, micro oven and washer this would be the categories, right? There will be no new categories in the short term?

No new categories now. We're not thinking any new categories now, correct.

So what would be the EBITDA margin on a 3, 4-year, sir, or you're not thinking that far as of now in your planned EBITDA margin?

No, we don't think that far, but our first thing is to hit double-digit EBITDA. And we would like to sell significant part of capacity for AC and for refs.

At least, do you have any internal guidance? Can you give guidance on the overall growth over a 3, 4 year, sir, not as next year's growth rate in terms of sales, if not EBITDA margins?

No, we don't give any guidance per se, but with AC, refs, et cetera, I think, anything over 25% is a minimum for us.

25% sales growth, right? You're not talking about the EBITDA growth and all?

25% growth in revenue. EBITDA, as I said, our internal thing is 10%. So our internal thing is double digit, and we are not moving away from that. We have not achieved it, is another point.

We'll take our next question from the line of Saket Kapoor from Kapoor Company.

Sir, just putting the attention to the Engineering segment. So if you could just give us some understanding what factors firstly attributed to the improved set of performance Q-on-Q basis also and also on an yearly basis for the Engineering segment. And how is this going to shape up for the coming year?

If you see the Engineering segment, I think what sort of surprised us is that in Q4, we never did well. In Q4, the growth was only 2%, 3%. Soumitra, Q4 growth was how much?

2%.

2% was Q4 growth. So Q4, we got hit badly. Margin was still okay. We could control costs, et cetera, some. We could do some pass through, et cetera. April, May has been better. Hopefully, June will be okay. But the division needs to grow by at least 20% a year minimum from its internal -- from whatever we have now. Then we have these greenfield projects on chain and electronics supply to Titan. And M&A, which we've spoken about, but still not been able to conclude. All these 3 plus the 20% growth-or-so that we expect, because we have capacities, it's a marketing issue. I think, if these are done, Engineering should have robust growth going forward.

Okay. So what are our average utilization levels for this financial year as well as for FY '24?

FY '24, well, let me put it differently. I think, for fine blanking business as such, I think we could still grow by about 15% to 18% with existing capacities at least. Now we need to add some capacities for the future and for safety also. Safety meaning, because if capacities are running at 90%, et cetera, then you need another press and all of that. Yes, so I think -- and in the Stamping division, we are already at capacity by and large. Stamping division, I think capacity is INR 7-odd crores a month and we're like nearly there.

Right, sir. Sir, you mentioned about the Titan part of the story in the Chain segment. So what kind of investment are we envisaging? And then again, what kind of this turnover ratio -- asset turnover ratio we would be expecting once these two projects also go through?

I think asset turnover ratio as per our internal guidelines should be minimum 2.5, but we expect more.

Okay. And sir, when can be that we see that to happen? Total cost, how much we are going to spend? INR 40 crores you said, I think, so for this Chain and Titan part.

Chain should be -- Chain we expect INR 30 crores to INR 40 crores, something like that. It is being worked out now. We don't have the final cost as yet, but around that, we believe. And as far as the electronic project goes, I think, it will be within about INR 20 crores, INR 25 crores, maximum, to start with.

Yes, sir. Just to put the gear on the P&L part, sir, we find that for the loss on share of associate that has remained -- has been lowered for this year to INR 18 crores. So if you could just explain how this category will move, especially the contribution from the...

I think, we expect refrigerator to be profitable and that should fix it substantially. Correct, Soumitra and Kartik?

Yes, yes. Share of loss was INR 18 crore loss, correct point, as compared to last year INR 24.6 crores; and refrigeration business for the year FY '24-'25 has already turned EBITDA-positive. So naturally, this loss amount will be going down drastically in '25-'26, we estimate.

But this is dependent on the volume. And I think, if we do this in a month with the right mix, ref would have turned the corner.

Yes.

But as I said, you see, we have made one -- the one issue is there, that we need to be the higher-end segment of refs. So that planning is being done. Whether we can do CKD, SKD, et cetera, et cetera, so those things we're looking into also, 400 liters plus.

Okay. Two small points. Sir, firstly, this INR 200 crore P&L flow-through on account of savings are all towards the Home Appliance segment only or these efficiencies are also factoring in about the Engineering segment, the INR 350 crore total program that you mentioned.

It is Home Appliances program only. Engineering segment will embark on a different program for like cost down, but we've still not finalized that. But they will also need to do a similar thing. That point is correct. What we are discussing internally at a strategic level is whether the cost-down program should be given to the same outside team, which is Alvarez & Marsal or should we look for someone else. That's the only discussion we are having internally, but we'll take a view on this in the next 15, 20 days.

Okay. And lastly, sir, in the cash flow, we have seen that we have paid higher taxes. So these are pertaining to the current year only? I think, so our tax payment in the category income tax has been closer to INR 45 crores for this year. So it is a higher operating profit only, yes, please?

Our tax percentage is 25.168%. If you have seen our P&L, the percentage stands at that level only, if you compare it with the net revenue. Whatever PBT amount is there, if you apply 25%, it will be coming to INR 43 crores, INR 44 crores. We have not paid anything extra. Whatever you are talking about that we have paid extra tax, it is not like that.

We'll take our next question from the line of Jagvir Singh from Shade Capital.

Yes. So my question is related to the -- this summer season, because now air condition is very, very significant to our revenues overall in the company. So now in the North and East, April and May month is very weak in the summer. So what is your take on this season in 2 months?

Ranjan, answer.

So for us, April, as I shared earlier, the last quarter was very good, where we grew by 52%. And April also, we were able to continue the momentum. For us, April was not a -- we were able to grew marginally in April, but we could see an impact in month of May, where the industry has dipped to the tune of around 35-odd percent. But overall, if we see the secondaries for IFB, we could see there is -- the momentum is still not as bad as the industry is moving. And we anticipate that this whatever shortfall we had in month of May, we will be able to cover it up in next 2 to 3 months' time. And from November, that's why someone earlier asked us, are we revising our figures, et cetera. No, we are not. We'll be targeting the volumes which we have projected.

Okay. So you are saying for the whole year, you will achieve the targeted revenues in the AC segment?

Yes. We are at a very small market share. We have much more to do.

So from which region we got the maximum sales, sir, in the AC segment?

For us, North was very strong. And North also at many places, we have even touched more than 8% to 9% market share. So the things in North are moving well. East also did well in first quarter, but the fourth quarter was not that good. But what we feel is, North, East, West, Southern part, if you see towards Kerala, we did very well. So this is how it works.

So sir, what is -- my last question related to the IFB retail exclusive stores, what is the strategy pertaining to this and how many stores right now we have in next 2, 3 years, exclusive...

So currently, we have around 487 to 500-odd stores. And our plan -- expansion plan for this financial year is to take it to around 700-plus. And this is something which we did some changes in our leadership. And if I see last 3 months or 4 months have been very good for IFB Points. Our contribution to the national sales have also gone up from IFB Point. So our thing is, we'll be touching around 750-odd IFB Points by the end of this financial year.

So till now, what is our experience with the IFB stores like customer experience or this is better than the -- earlier we are doing mostly with the distribution side -- through the distribution side.

No IFB Points, it's our own store and the customer is able to see the complete range in the store. So that one thing itself gives me much more confidence. And what we feel is when a customer walks into IFB Points, we try to give him a real good experience. So that is what is giving us good results.

And sir, the last question is, we are targeting double-digit EBITDA margin in the next 2 years or it will take more time? And what type of EBITDA margin we can see this in FY '26?

We expect double-digit EBITDA margin. I mean, our expectation was we would have already achieved it, but we have not. So hopefully, we'll achieve it soon. It cannot be after a year or two. It cannot be after 2 years, et cetera.

We'll take our next question from the line of Naitik from NV Alpha Fund.

Sir, my first question is, when I look at our Washer segment since the past 2 or 3 years, we have sort of been stagnant at around INR 1,700 crores to INR 1,800 crores of revenue. Now how do we intend to sort of get out of this range and bring growth back? And can we expect this number to grow from next year?

We expect Washer number to grow this year. And we are doing everything possible. And as I said, this issue of getting management right state-by-state is just taking too long, but there is no other way to fix this rather than getting management right state-by-state, town-by-town.

Right. So we expect this to...

And our product range, by and large, is okay now. Only thing we don't have is the 12 and 13 kilo, which will take time. That will not come in before March. But we don't see significant volume there as yet. There is volume, but it's not as much as -- it is not a material impact thing per se in terms of volume. It's not materially impactful as yet, if you do the other things well.

Right, sir. So we expect this number to grow in FY '26?

Yes.

Right. And sir, my second question, I needed some clarification. So I think, I heard, we were expecting minimum of INR 200 crores in cost savings, but internally, the target is, it can go north of INR 300 crores also, so is it correct?

For material cost.

Right. So did I hear it correct? The number is INR 300-plus crores or is it INR 200 crores only?

No, we are saying at least INR 200-plus crores we'll get. But our internal expectation is much more, but for now, we're only sticking to INR 200-plus crores.

Got it.

But whatever this team, which is Alvarez & Marsal and our team, and we put some of our best people into this full time. They are doing nothing else now. Actually, this was a point which one of the investors in one of this call had told me that it's much better if you do it with an outside consultant instead of trying doing everything yourself. And I thought we could do it ourselves, but I was mistaken there. I think we should have moved faster on this with an outside firm.

We'll take a next question from the line of Majid Ahamed from PinPoint Capital.

Sir, my first question is, sir, what is the EBITDA margin you may look in the AC segment and just can you give some sort of numbers on that? Because we are breaking even any sort of EBITDA, if not PBT?

I think, EBITDA for AC should be much more than whatever we closed 31st March with. And as I said, for the company to achieve double-digit EBITDA, AC also has to do significantly well. So it will be much, much higher than the present level.

But can you give me a range at least, any numbers or any sort of range to understand?

No, I wouldn't like to give a range. But I'd say minimum 5%-plus.

Minimum 5%-plus, okay.

5%-plus we should do.

Got it, sir. And for washing machine, like what is your -- like in terms of your front load what is your strategy in particular to grow that in coming 2 to 3 years?

I think, we should significantly grow market share. We are on the -- we are doing the right things which is the basics, we are trying to do it right. I think to grow market share, IFB Points has to be much more well looked after. And every town that the management has to be better, which is only a function of getting management fees in that town right. That's a lot of day-to-day rigorous work in terms of getting things right. And I think we need to do a better job at that, which is what we said. The processes are on. They are being implemented. The rigor has to be more.

Got it, sir. Got it. Sir, to speed up the management's restructuring and everything, sir, do you have any sort of incentives for that to speed up any sort of internal things that you are doing?

Yes. We are doing all that. We are doing all that, yes. Answer is yes.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments. Over to you, sir.

Thank you very much for participating in this call, and we will meet again after quarter 1. Thank you.

Thank you.

On behalf of IFB Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.