IFB Industries Limited

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DIRECTOR AND curnr

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by Tier l, Tier 2, Tier 3, then the growth which has been sort of consistent over the last2,2.5 years, the Tier 2, Tier 3 is growing much more lapidly as compared to Tier L This has been a consistent tr

INR 25,000

is that the availability of finance has definitcly helped because it's an entry-level product, is INR 25,000 and the highcr cnd is INR 40,000, then cash difference is INR 15,000, but in EMI telms, it is maybc

INR 40,000,

nce has definitcly helped because it's an entry-level product, is INR 25,000 and the highcr cnd is INR 40,000, then cash difference is INR 15,000, but in EMI telms, it is maybc INR 1,500. So as the finance opti

INR 15,000,

's an entry-level product, is INR 25,000 and the highcr cnd is INR 40,000, then cash difference is INR 15,000, but in EMI telms, it is maybc INR 1,500. So as the finance options are expanded, the ability to buy

INR 1,500

nd the highcr cnd is INR 40,000, then cash difference is INR 15,000, but in EMI telms, it is maybc INR 1,500. So as the finance options are expanded, the ability to buy something higher priced has also becom

8%

we will sort of come back in terms of consistency on the margins as well, and we can be closer to 8% to 9% EBITDA margins maybe in the next two years? Raj Ray Yes. So I don't want to give a figure,

9%

ll sort of come back in terms of consistency on the margins as well, and we can be closer to 8% to 9% EBITDA margins maybe in the next two years? Raj Ray Yes. So I don't want to give a figure, but th

INR 500 crore

erage for the company Bhargav Buddhadev: If I'm take in the next year", maybe once we reach, cross INR 500 crores of top line? Xtrffi !r:q{*sts'i*l; tis$itec* Rai Ray: I would -- if I compare it to washer mar

14%

o growth that we used to report at the company level, probably that should be now somewhere around 14%o, I 50% or we should be back on track for the 20Yo mark? Raj Ray: I think our potential is the fi

50%

that we used to report at the company level, probably that should be now somewhere around 14%o, I 50% or we should be back on track for the 20Yo mark? Raj Ray: I think our potential is the figure tha

60%

e have been absent. So in theil convection range, for example, this 28-liter price point is almost 60%, 65% of thcir sales. And we arc going against that particular segment with this introduction. Pra

65%

e been absent. So in theil convection range, for example, this 28-liter price point is almost 60%, 65% of thcir sales. And we arc going against that particular segment with this introduction. Prasheel

“No, I think even in LG, Samsung, I would expect that the trend is that the higher-end is selling more.”

“But if we finish these two jobs properly by Q4, which is our internal target,l think this question of the stable margin is something, hopcfully, that we can settle by Q4.”

“The AC margins currently are lower than the average for the company Bhargav Buddhadev: If I'm take in the next year", maybe once we reach, cross INR 500 crores of top line?”

“I would -- if I compare it to washer margins, then even in the next year's AC margins will be lesser, but one advantage that the AC bring to the table is that they are actually -- they are soaking up the overhead.”

“Like I said a while back, I personally don't expect further erosion in pricing from them.”

“I think over the next quarter or so, we'll know.”

“But there was nothing visible during the current quarter, and we don't expect anything in the current quarter.”

“Raj Ray Yes, there was nothing specific as far as this Diwali period was concerned beyond what they were already doing and I don't expect it but you know like you pointed out, we have to keep a watch on this.”

“So going forward, should we expect like probably the 15o/o,20Yo growth that we used to report at the company level, probably that should be now somewhere around 14%o, I 50% or we should be back on track for the 20Yo mark?”

“And some of the models will come in Q 1 of next year.”

Raj Ray

27

R. Anand

11

Moderator

9

Prasheel Gandhi

9

Abhinav Jain

9

Dhananjai Bagrodia

7

Bhargav Buddhadev

5

Rai Ray

1

Prabir Chatterjee

1

Manoj Gori

1

Dhananjai Bagrodia

Sir, are you noticing any demand difference really, nrral versus urban and entry level versus prcmium?

Raj Ray

If you don't segment in terms of urban and rural, but if you segment by Tier l, Tier 2, Tier 3, then the growth which has been sort of consistent over the last2,2.5 years, the Tier 2, Tier 3 is growing much more lapidly as compared to Tier L This has been a consistent trend now and it's almost the third year that this is happening. As far as the entry level versus the premium or the higher end ofthe segments are concerned, that trend is very clear, that the higher end is growing far more rapidly than the entry level segments.

Dhananjai Bagrodia

So why is that? Any thoughts on that? Raj Ray That's an interesting question. And see, I would put it as an outcome from 2, 3 enablers. I cannot say that promincnce is definitely which one it is, but it is probably a basket like this. So one is that the tendency to buy something bigger, whether in washer or for that matter ACs, for example, has always been there. So faster than not has always been favoring higher capacities, for example, as 8-kg capacity in washing machines. That trend was building. The pandemic period and the lockdowns and everybody has grown getting involved for the work-at-home, I think, accelerated that change. Because everybody in the family was involved in the process of washing, everyone suddenly realized that there are two or three multiple washers happening at home, let's buy a bigger newer machine. A lot of the equipment went through exchange dnring those lockdown periods. So I think there was a change, that same got accelerated over the last2 years, driven b

Raj Ray

No, I think even in LG, Samsung, I would expect that the trend is that the higher-end is selling more. Are you saying that lower-end is selling more?

Dhananjai Bagrodia

No, I'm just -- no. I'm wondering, is it, industry-wise in terms of the -- even at a higher-end -- they're cutting the prices even at higher-end. Is that right? Raj Ray No. industry is not cutting prices. What I said is that therc is a specific reality that Samsung, for example, has taken vcry aggrcssive price positions across all categories. Our understanding is that they're doing this to basically buy share. But it is not something that is happening at any particular entry-level pricc point or higher end price point. It's more a common thing acloss. So that's a separate thing. That is not related to this point about the higher-end selling more. The higher-end that is selling more, the three reasons that I told you achrally have nothing to do with price pcr se because the three reasons that I gave you are not particularly price to them. They are driven by other factors, which is something that IFB has experienced. You see, we have not changed pricing. Pricing has only increased. Ifyou

Dhananjai Bagrodia

And, sir, industry-wise, would the demand be where, company is more plesent in front loading washing machines, with industry demand, what would you think -- what would your analysis in tenns of what would be the segmentation industry-wise on front loading washing machines versus top load in volumes or size? Raj Ray So fypically, it is a sort of factor of 1:3, which could vary from 1:2 to 1:4, depending upon which gcography in India you wcre in. Dhananjai Bagrodia: And in tenns of size?