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IFB is among the top five players in washing machines | Photo: Shutterstock
IFB Industries share price hit a record high of Rs 2,242.30 on the BSE today. The shares zoomed 20 per cent on the stock exchange in Wednesday’s intraday trade, amid heavy volumes, on stable demand outlook.
With this, the stock of the household appliances company surpassed its previous high of Rs 2,171 touched on August 7, 2024. In comparison, the BSE Sensex was down 0.13 per cent at 81,712 at 10:45 AM.
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The operating margin improved to ~6.5 per cent in Q1 FY25, driven by reduction in material cost (through cost reduction programmes) and operating leverage.
IFB Industries Management Guidance
The consumer durable industry was either flat or declined in the June quarter (Q1 FY25), especially washer category; although air conditioners and refrigerators saw significant growth. IFB Industries’ management believes that overall demand remains stable in the medium-term. The upcoming season should see good customer sales across all categories, it said.
The management highlighted that the washer business showed good signs in August, 2024, and is well poised for a good performance in Q2 and Q3 of FY25. A higher contribution from washers will also drive margins higher as IFB earns a better margin in this product category.
A new range of Washers with inverter Technology/WiFi is under development and is expected to become a platform for growth in FY 2024-25, IFB said.
The company’s revenue is expected to grow in low double digits in fiscal 2025 on the back of strong summer sales and revival in rural demand. The operating margin is expected to improve further over the medium term, with increasing volumes, small price hikes, and cost saving measures, according to CRISIL Ratings.
IFB operates in two segments – manufacturing and marketing of consumer durables and manufacturing of fine blank components (part of engineering segment) and goods. It produces fine blanking components for two wheelers, four wheelers, heavy vehicles and electrical OEMs. Backed by a strong brand and established market position, the company has a diversified product portfolio, comprising front and top load washing machines, dryers, ACs, microwave ovens, dishwashers, modular kitchen and chimneys.
IFB is among the top five players in washing machines and has a strong position in the front load washing machine segment. The company has a well-diversified revenue profile, driven by presence in the household appliances (accounting for around 78 per cent of revenue) and engineering division (22 per cent) in fiscal 2024.
The announced Production Linked Incentive (PLI) scheme for white goods, with an investment indication of Rs 4,614 crore, has been an excellent opportunity for manufacturers to ramp up their production, reduce import dependency and make products more affordable.
Consumer Durables Industry Outlook
According to CRISIL, the consumer durables sector in India is expected to witness a revenue growth of 8-10 percent this fiscal, supported by steady growth in urban demand. Operating profitability will also improve this fiscal due to softening of raw material prices, reversing two years of contraction; growing demand for premium appliances with smart technologies will see revenue growth. Demand will be driven by both urban and rural segments.
The increasing demand for premium appliances is one of the primary factors that will fuel the growth of the home appliances market in India during the next few years. The under-penetrated air conditioners (AC) segment will be one of the key growth drivers for the industry. Demand for ACs and refrigerators are being driven by changing weather patterns. Consumers are opting for higher-capacity refrigerators and energy – efficient ACs are being preferred, the company said.
First Published: Oct 16 2024 | 11:18 AM IST
