Ice Make Refrigeration Ltd (NSE: ICEMAKE) Q2 2025 Earnings Call dated Nov. 19, 2024
Corporate Participants:
Chandrakant P. Patel — Chairman and Managing Director
Ankit Patel — Chief Financial Officer
Nikhil A. Bhatt — Vice President Strategy
Mandar Desai — Company Secretary and Compliance Officer
Analysts:
Aryan Rana — Analyst
Resha Mehta — Analyst
Nikhil Chaudhary — Individual Investor
Vikas Jain — Analyst
Zaki Nassir — Individual Investor
Vijay Chugh — Individual Investor
Tej Patel — Analyst
Vignesh Iyer — Analyst
Gurjeet Singh — Individual Investor
Mosam Shah — Analyst
Shane De Silva — Analyst
Presentation:
Operator
Good afternoon, ladies and gentlemen. I am Neerav, the moderator for this conference call. Welcome to the earnings conference call of Ice Make Refrigeration Limited arranged by Aaryana Matasco to discuss the financial results for Q2 and H1 FY25. At this moment, all participant lines are in the listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]
I now hand the conference over to Mr. Aryan Rana. Thank you and over to you, sir.
Aryan Rana — Analyst
Thanks, Neerav. Good evening everyone. Thank you for joining us today for Ice Make Refrigeration Limited’s Q2 financial year 2025 earnings conference call to discuss the financial performance for the quarter ended September 30, 2024.
We are delighted to share another quarter of solid performance underpinned by our commitment to innovation, operational excellence and our robust portfolio comprising of over 55 plus refrigeration equipment. The financial results for the quarter are available on our website and the stock exchanges. However, I would like to remind everyone that during our discussion we may include forward-looking statements. These are subject to various risks and uncertainties with known an unknown that impact these results, performance or achievements. We encourage you to view these statements in conjunction with the risk factors outlined in our disclosure.
Joining us today to discuss results and address your questions, we have our esteemed management team Mr. Chandrakant P. Patel, Chairman and Managing Director; Mr. Nikhil Bhatt, Vice President, Strategy; Mr. Ankit Patel, Chief Financial Officer; and Mr. Mandar Desai, Company Secretary and Compliance Officer.
During today’s call, we will walk you through our financial performance for the second quarter of FY25, answer your questions, and share insights on our strategic initiatives, market opportunities, and future outlook.
With that, I will now hand over the call to our Chairman and Managing Director Mr. Chandrakant P. Patel. Sir, over to you. Thank you.
Chandrakant P. Patel — Chairman and Managing Director
Good evening, everyone. I am happy to share with you the financial results of Ice Make Refrigeration Limited. In second quarter, despite a challenging market environment, our performance shows our strong strategic execution and commitment. We have witnessed robust growth in revenue on both standalone and consolidated basis, driven by increasing demand across our diverse range of refrigeration solution. This growth shows the success of our market expansion initiative and a solid demand product offering.
Our quarter-on-quarter improvement in EBITDA margin will be our focus and on enhancing operational efficiency and smooth process. While we observe slight year-over-year decline in PAT margins, this was primarily due to increased manpower cost associated with the new project. This cost our strategic investment and we expect to see positive return once the project starts generating revenues.
To address short-term cost pressure, we are implementing strategic cost management measure at optimizing our expense structure. These initiatives are expected to improve profitability in the coming quarter. Our current running order book is INR126 crores and we are confident to achieving a new milestone of our INR500 crores revenue target this financial year.
Our both new project like Continuous PUF Panel and Commercial Freezer will be operational by end of this month and we are well prepared to capture the upcoming season benefit. We have committed to delivering sustainable growth and enhancing profitability. We are actively expanding our market presence through continuous innovation and operational excellence with our diverse product portfolio like cold room storage, ammonia refrigeration, industrial commercial refrigeration, as well as transport refrigeration. We are well positioned to capture on the increasing demand for advanced cooling and cold chain solution.
Thank you all for your continued support and confidence in Ice Make. We look forward to maintaining our growth momentum and achieving greater milestone in the quarter ahead. Thank you for your attention. I now invite our CFO Mr. Ankit Patel to provide insight into the company’s financial performance, followed by Mr. Nikhil Bhatt who will share our business growth strategy. Thank you.
Ankit Patel — Chief Financial Officer
Thank you, MD sir and good evening to everyone. I am pleased to report that our consistent quarter-on-quarter financial growth demonstrate our strategic focus on sustainable expansion and operational efficiency. About standalone financial performance, in Q2 FY25, our revenue from operation increased to INR101.38 crores, a growth of 21.88% from INR83.17 crores in Q1 FY25 and a notable 34% rise in year-on-year. This performance was driven by heightened demand and effective execution of our strategy.
Our EBITDA reached to INR8.51 crores, up by 35.08% from previous quarter and 10.81% year-on-year. The EBITDA margin improved to 8.37%, higher than the 7.56% in Q1 FY25, although a slight below the 10.11% recorded in Q2 FY24 due to increase in strategic manpower cost of our new project. Profit after tax stood at INR4.89 crores, reflecting a 27.01% rise from Q1 and a 6.53% increase year-on-year, with a PAT margin improving to 4.81%, slight increase from 4.62% in Q1, it is below 6.05% seen in Q2 FY24.
On consolidated financial performance, consolidated revenue reached INR103.39 crores. It is up by 21.31% from Q1 FY25 and a 34.46% increase year-on-year, reflecting the strong market demand and enhanced product portfolio. EBITDA increased by 39.81% to INR8.57 crores, with a margin of 8.28%, up from 7.19% in Q1. It is a bit lower than 10.01%, which was reported in last year. Consolidated PAT was INR4.79 crores, a 31.59% increase from INR3.64 crores in Q1 and 6.68% rise year-on-year. The PAT margin improved to 4.63%, up from 4.27% in Q1, though, it was below the 5.83% recorded in Q2 FY24.
For half year review, for H1 FY25, standalone revenue raised to INR184.55 crores, up 20.63% from H1 FY24 while consolidated revenue increased by 20.88% to INR188.61 crores. However, standalone PAT declined by 13.96% to INR8.75 crores and consolidated PAT fell by 14.42% to INR8.43 crores. The company is under expansion phase. We have to incur some costs for a bit time before revenue from new projects starts. This is a temporary effect on our margins. Once our revenue from new project start, our EBITDA margin will be in the normal range of 9.5% to 10.5%.
Now I invite our Strategy head Mr. Nikhil Bhatt to share the business update. Thank you.
Nikhil A. Bhatt — Vice President Strategy
Thank you, Ankit ji. Ladies and gentlemen, Ice Make’s robust revenue growth underscores our strong market position and the sustained demand for our diverse refrigeration solutions. Our commitment to innovation, product diversification, and the expansion of our sales channel has been instrumental in driving consistent performance.
Looking ahead, the Indian cold chain storage and logistic market is poised for significant growth as per one of the recent report project, a compound annual growth rate of 5.67% with a market size expected to expand from $10.30 billion in 2024 to $13.58 billion by 2029. This growth is assured by increasing demand for perishable goods, the expansion of the food and pharmaceutical industries, and the rising influence of e-commerce platforms.
We anticipate strong opportunities in the market as well as investment in cold storage facilities and logistic infrastructure inquiries. Ice Make is well prepared to capitalize on this growth, leveraging our extensive product portfolio and strategic initiatives to meet the evolving needs of our customers, helping the company achieve its revenue target.
During this current year, we are receiving a sizeable order from our good, reputed customers and the organization like West Bengal Livestock. We have received one order from the Dairy Modernization for the INR9.63 crores as well as from the NEDB for the refrigeration plant in Himachal Pradesh valued up INR8.28 crores and from Jammu and Kashmir Horticulture Board for the CA cold storage of about INR10 crores, and also we are getting a good numbers from the leading e-commerce platform with our existing customer as well as the new customer.
So far as our new capital investment project expansion as our MD sir rightly says, the Continuous PUF Panel plant has already established and the trial run has been done and the production will start shortly. And the chest freezer or the commercial freezer plant will be also operative by end of this month. So, far as our associate for the sister company Bharat Refrigeration, at present civil construction work is under way and by April ’25, it is likely to be completed and we will be able to shift that unit by second quarter of FY26. As our MD sir rightly says, we are targeting INR500 crores which is achievable looking to the numbers of orders we are having as on today 136 plus crores and we are hopeful that we will definitely catch this target.
Thank your for your continuous support and now we look forward to your questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions] The first question is from the lines of Resha Mehta from GreenEdge Wealth. Please go ahead.
Resha Mehta
Yeah, thank you. So, wanted to check that what could be the revenue contribution of transport refrigeration and ammonia refrigeration for the first half. And since these are low gross margin segment, so the total revenue contribution from these two segments would we like to cap them at some level, like in FY24 it was at almost 27% of revenue. Do we have such a capping number in mind, so that is my first question?
Ankit Patel
For the first question, about Reefer Van contribution, in H1 transport refrigeration contribution is around 8% and ammonia along with the project has contributed around 23%.
Resha Mehta
So, are we planning to cap the revenues from both these segments at an annual level to some number or — because these are low gross margin segments, right? So how do we actually think about this?
Ankit Patel
In the ammonia segment, we have seen that the margins are a bit low. Transport refrigeration is also you said similar. It is around 16% to 19% gross margin business. I think transport refrigeration vertical should be somewhere in the range of around of 10% business. It is not like we are capping, but the nature of business is like it should somewhere in the range of 8% to 10%. And so far as ammonia and other project business is concerned, we feel that in even current financial year also it should be somewhere in the range of maybe 17% to 20% range on full-year basis.
But there are some projects also which are having equal size of margin. I think gross margin somewhere around 25%, 28% also. So not all the projects are having low-margin business, but our focus is to maintain around 9.5% to 10.5% EBITDA going forward with around 25% to 30% growth year-on-year. So the business mix will also be in the similar fashion. It might happen that maybe 2% to 3% business may be somewhere here and there, but our focus is to maintain EBITDA margin in the range of 9.5% to 10.5% and our projection will also be in the similar direction. Yes, ma’am.
Resha Mehta
And 9.5%, 10.5% EBITDA margin, we are confident of maintaining or achieving despite the salience, the revenue contribution from these two low gross margin segments increasing, is that understanding right?
Ankit Patel
Ma’am, in current project there are some projects where we are having gross margin around 25%, 28% also. Some are having margin in the range of maybe around 12%, 15% also. So, it is not fixed that each and every project will bear low margin. But yes it is right. It is in general said that big projects are having less margins, but there are some projects which is having equally good margin also. So, we are also very selective that if we are selecting any project that our EBITDA margin should be somewhere in our decided range also. So our focus will be there, and we will make our projection accordingly. And yes, we are confident that in going forward 9.5% to 10.5% somewhere in the range of 10%, we will be able to maintain our EBITDA margins. We are confident on that.
Resha Mehta
Right. And in the industry, the cold chain industry size is almost 2 trillion while the addressable market there for us is around INR6,000 crores as per your presentation. So by entering new categories or new product line etc, how much is it possible in the near term in the next two years to three years to say expand this addressable market from INR6,000 crores to, let’s say, INR8,000 crores, INR9,000 crores? Is that possible? And if yes, then which are those new products, new categories where we are planning to enter?
Nikhil A. Bhatt
Actually, what you are referring, the INR6,000 crores of market that is we believe that it is roughly for our existing products. If we add our new products, that is our commercial freezer as well as the continuous freezers, it will be total INR15,000 crores in all. So we are definitely increasing our market shares and we are hopeful that we will be getting new business from this current market where we have estimated around INR15,000 crores.
Resha Mehta
That is INR15,000 crores, right?
Nikhil A. Bhatt
Yes. So existing product is above INR6,000 and the continuous panel market may be around INR4,000 crores and the commercial freezers market may be INR3,000 crores to INR4,000 crores of market what we believe. So, total making is the INR15,000 crores of the total market of our existing as well the new product.
Resha Mehta
Understood. And also my understanding is that in chemicals and plastic industry we have a low presence, so how big is it currently for us in terms of revenues and what is the potential here over, say, next two year to three years?
Nikhil A. Bhatt
See, actually, it is true that in chemical and plastic Industries we are having less presence, but in the pharmaceutical, it is already there, so it one type of chemical process in the pharma industry. So when we are focusing on chemical market also and plastic — because there is in the plastic, some of the other products like the chiller will be the ancillary product or ancillary machinery to the plastic industry. So it may not be required major products in the plastic industries except some storage of the raw material in particular chemical or etc.
Operator
Thank you. Resha, I will request you to come back for a follow-up question.
Resha Mehta
Sure. Thank you.
Operator
Thank you very much. Next question is from the line of Nikhil Chaudhary, Individual Investor. And I request to all the participants to kindly ask questions in Hindi, if possible.
Nikhil Chaudhary
Yeah. Hi, Ankit ji. Hi, Chandrakant bhai, and hi, Nikhil Ji. Thank you for the opportunity. [Foreign Speech]
Ankit Patel
[Foreign Speech]
Nikhil Chaudhary
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Nikhil Chaudhary
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Nikhil Chaudhary
[Foreign Speech] Thank you so much, sir.
Operator
Thank you. [Operator Instructions] Next question is from the line of Vikas Jain from RM Capital Family Office. Please go ahead.
Vikas Jain
Yes, hi, sir. Thank you for the opportunity. [Foreign Speech]
Ankit Patel
[Foreign Speech] I’m not sure, but somewhere in the range of 75% to 80%, maybe around 78%. [Foreign Speech]
Vikas Jain
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Vikas Jain
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Vikas Jain
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Vikas Jain
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Vikas Jain
[Foreign Speech]
Operator
May I request to come back, please?
Vikas Jain
Sure.
Operator
I request all the participants, kindly restrict to two questions per participant and join the queue for a follow-up question. Next question is from the line of Zaki Nassir, Individual Investor. Please go-ahead.
Zaki Nassir
[Foreign Speech] Next year, do you think the combined EBITDA margins will remain around 10%, sir, continuous panel and our existing business?
Chandrakant P. Patel
[Foreign Speech]
Zaki Nassir
[Foreign Speech] INR60 crores to INR70 crores you will clock on just the continuous panel, sir.
Chandrakant P. Patel
[Foreign Speech]
Zaki Nassir
So next year with the entire thing, I think you have planned close to INR625 crore to INR650 crore kind of top-line with the new project coming in.
Chandrakant P. Patel
We are expecting somewhere in the range of around INR650 crore.
Zaki Nassir
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Zaki Nassir
Thank you, sir. [Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Zaki Nassir
Long-term debt and working cap separately.
Chandrakant P. Patel
Working capital also. Okay. [Foreign Speech] That utilization will be somewhere in the range of around 50% average annually, not more than that.
Zaki Nassir
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Zaki Nassir
Thank you, sir. And best wishes for the year and your new plans, sir. Thank you.
Chandrakant P. Patel
Thank you, Zaki.
Operator
Thank you very much. [Operator Instructions] Next question is from the line of Vijay Chugh, Individual Investor. Please go ahead.
Vijay Chugh
Thank you, sir, for giving me the opportunity. [Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Vijay Chugh
[Foreign Speech] And it is for personal, not for capex or anything?
Chandrakant P. Patel
[Foreign Speech]
Vijay Chugh
Okay, sir. Thank you.
Operator
Thank you. Next question is from the line of Tej Patel from Niveshaay Investment Advisory. Please go ahead.
Tej Patel
Hi, good afternoon, Chandrakant Ji, Ankit Ji and Nikhil Ji. Thank you so much for the opportunity. [Foreign Speech] OEM opportunity in terms of imports getting reduced, how big do you see this getting or [Foreign Speech] are you expecting or how much you want to keep a share between, let’s say, branded products and the OEM?
Chandrakant P. Patel
[Foreign Speech]
Tej Patel
[Foreign Speech]
Chandrakant P. Patel
INR1.25 lakh per annum.
Tej Patel
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Tej Patel
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Tej Patel
[Foreign Speech]
Chandrakant P. Patel
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Tej Patel
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Chandrakant P. Patel
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Tej Patel
Okay. Got it. [Foreign Speech]
Nikhil A. Bhatt
[Foreign Speech] However, in terms of numbers maybe not what you were talking is correct. [Foreign Speech]
Ankit Patel
[Foreign Speech]
Tej Patel
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Tej Patel
Thank you. Thank you so much, sir, for your time and all the best for the future. Thank you.
Chandrakant P. Patel
Thank you.
Operator
[Operator Instructions] Next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Vignesh Iyer
Hello, sir. Thank you for the opportunity. [Foreign Speech]
Ankit Patel
[Foreign Speech]
Vignesh Iyer
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Vignesh Iyer
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Chandrakant P. Patel
[Foreign Speech]
Vignesh Iyer
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Chandrakant P. Patel
Thank you.
Operator
Thank you. Next follow-up question is from the line of Vikas Jain from RM Capital. Please go ahead.
Vikas Jain
Yes, sir. Thank you so much, sir. [Foreign Speech]
Ankit Patel
[Foreign Speech]
Vikas Jain
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Vignesh Iyer
[Foreign Speech] Thank you so much for this answer. Thank you.
Operator
Thank you. Next question is from the line of Gurjeet Singh, Individual Investor. Please go ahead.
Gurjeet Singh
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Gurjeet Singh
[Foreign Speech]
Chandrakant P. Patel
[Foreign Speech]
Gurjeet Singh
Thank you, sir. Thanks a lot.
Operator
Thank you. [Operator Instructions] Next question is from the line of Mosam Shah from Wealth Guardian Services. Please go ahead.
Mosam Shah
Hello.
Chandrakant P. Patel
Hello.
Mosam Shah
Congratulations.
Chandrakant P. Patel
[Foreign Speech] You’re audible.
Mosam Shah
[Foreign Speech]
Ankit Patel
[Foreign Speech]
Mosam Shah
Okay. Thank you. [Foreign Speech]
Chandrakant P. Patel
[Foreign Speech] That will be somewhere in the range of around 10%, 12%.
Mosam Shah
Okay. Thank you and all the best.
Chandrakant P. Patel
Thank you.
Operator
Thank you. [Operator Instructions] Next question is from the line of Shane De Silva, Individual Investor. Please go ahead.
Shane De Silva
Thank you for the opportunity. [Foreign Speech]
Nikhil A. Bhatt
[Foreign Speech]
Shane De Silva
Okay. Thank you.
Operator
Thank you very much. As there are no further questions, I will now hand the conference over to Mr. Mandar Desai for closing comments.
Mandar Desai
Q2 FY2025 has been a strong quarter for Ice Make Refrigeration. Our consistent growth across key financial metrics highlights our resilience and the effectiveness of our business strategies. We remain confident in our ability to navigate the challenges ahead and to capitalize on the opportunities in the rapidly evolving refrigeration industry.
On behalf of the Ice Make Board of Directors and the management team, I would like to extend our gratitude to our shareholders, employees, and partners for their continuous support. We are committed to delivering value and look forward to strong performance in the coming quarters. If you have any questions or require additional information, please feel free to reach out to us or our Investor Relation Advisors. We are here to assist you with any inquiries. Thank you.
Operator
[Operator Closing Remarks]