IFB Industries gains 27% in three months amid strong earnings and strategic investments

Synopsis

IFB Industries' shares have surged, driven by strong Q4 earnings and planned investments in appliances and automotive chains. While top-load washer sales grew significantly, front-load sales dipped. The company aims for ambitious refrigerator sales targets and cost-cutting measures to boost margins. However, analysts remain cautious due to past margin delivery issues and rising competition.

ET Intelligence Group: IFB Industries has gained 27% in three months, outpacing the ET Consumer Durable index, which rose 2%. The household appliances maker reported strong earnings for the March 2025 quarter. The company plans to invest ₹200-₹220 crore across appliances, AC and automotive chain businesses. Cost-cutting initiatives are underway to support margin improvement. Despite solid traction, analysts remain cautious on margin delivery, with rising competition posing a risk.

Revenue of top-load washers segment grew 22.3% on year to ₹116.7 crore in March quarter driven by new series launch. It was faster than industry growth of 15-16% gaining a market share of 1.5-2%.

On the other hand, revenue of the front-load washers segment dropped by 1.3% to ₹223.4 crore amid slower demand for up to 10kg segment. The company plans to invest ₹100-₹130 crore to increase production of 12-13 kg washing machines.

Agencies

In the AC segment, the company sold 400,000 units, which was below the guidance of 490,000 issued at the beginning of the year. The company has refrained from giving AC sales volume guidance for FY26 but it expects robust growth.

The sales volume of refrigerators segment rose two-fold to 290,000 units in FY25. It has given an ambitious sale target of 730,000 units for FY26. This works out to 60,000 units of sales a month, higher than the average monthly sales of under 25,000 units in FY25. While the company expects to cross 50,000 units of monthly sales in the coming quarters, it will be a tall task to meet the full-year guidance.

IFB's revenue and net profit grew by 22.3% and 57.3% to ₹1,333.7 crore and ₹18.9 crore year-on-year in the March quarter respectively. The operating margin before depreciation and amortisation (PBDIT margin) improved by 20 basis points to 5.3%. The company has initiated a cost-reduction project to save ₹200 crore in expenses over 18 months. Of this, ₹60-₹80 crore is expected to reflect in the FY26 financials.

Yes Securities has downgraded stock to 'add' from 'buy' with a 5% decline in target price to ₹1,702 stating it will be cautious as company has not been able to deliver on margin expectation in past. "Increased competition from Voltas Beko, Whirlpool and Bosch a risk to revenue growth," the brokerage said.

...moreless

...moreless