IFB Industries Limited (NSE: IFBIND) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Unidentified Speaker
Bikramjit Nag — Joint Executive Chairman & Managing Director
Mr. Soumitra Goswami — Chief Financial Officer
Kartik Muchandi — Head, Finance & Accounts and HAD, Marketing
Ranjan Mathur — Vice President
Analysts:
Unidentified Participant
Arshia Khosla — Analyst
Lakshminarayanan — Analyst
Navid Virani — Analyst
Udit Sehgal — Analyst
Naveen Baid — Analyst
Naitik — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to IFB Industries Limited Q1FY26 earnings conference call hosted by Nirval Bank Equities Private Limited. This conference may contain certain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of the future performance and involves risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing staff since zero on your touchstone phone.
I now hand the conference over to Ms. Ayesha Khosla from Nirmalbank Equities Private Limited. Thank you. And over to you ma’. Am.
Arshia Khosla — Analyst
Thank you. Shruti. I Asha Khosa on behalf of Nirmalband Institutional Equities. Welcome all of you to first quarter FY26 earnings conference call of IFB Industries Limited. From the management today we have Mr. Bikramjit Nag, Chairman. Mr. Sumitra Goswami, CFO Mr. P. Narayanan, MD, Engineering Division. Mr. C.S. govindraj ED Manufacturing of Home Appliances Division. Mr. Jayanta Chanda, CFO of Engineering Division. Mr. Kartik, Head Finance and Accounts Home Appliances Division and Mr. Anjan Mohan, National Sales Head, Home Appliances.
I would now request the management to give their opening remarks post which we shall open the floor for Q and A. Thank you. And over to you sir.
Mr. Soumitra Goswami — Chief Financial Officer
Good afternoon everybody. I am Swamitra Goshami, the Chief Financial Officer of IFB Industries Limited. I welcome you all for IFB Industries Limited investors call for first quarter FY 2526. I have with me Mr. Vikram Dipath, Chairman of IMB Industries Limited. Mr. T.H. narayanan, Managing Director and Chief Executive Opera.
Unidentified Speaker
She just said all that so you can just get get onto the call. She just said whole of it.
Mr. Soumitra Goswami — Chief Financial Officer
Okay, now I will inform you about quarter 1 result. Revenue for the quarter was 1310.82 crore. Against last year 1244.44 crore which is a growth of 5.33%. EBDIT for the period was 69.95 crore and its percentage to revenue was 5.34% as compared to last year’s 86.55 crore which was 6.95% on grade.
Expenditure fee expenses for the quarter was within budget. However, in case of some expenditure rates expenditure have crossed the Last year’s expenditure EBT for the period was 33.93 crore. Against last year figure of 52.40 crore. Water on PAT was 25.36 crore which is 1.93% on revenue. Against last year 38.84 crore which was 3.12% on revenue. With this I request to start the question and answer session. Hello. You can start the question and answer session.
Unidentified Speaker
Hi. Hi. This is Vikram Mad here. Just one point please. Before we start the Q and A. If you see the results there is increase in fixed cost as well as some in material cost.
Karthik will explain. Karthik and Mr. Govinda. Then I will explain exactly why and the remedial measures which are being taken. And Mr. Mathur will explain the issues on sales especially related to AC due to monsoons etc, early onset of monsoon etc. And us not getting the required sales in Russia which has caused margin issues and remedial steps to be taken in Q2 which are underway. Okay, please start. And Karthik, you will answer most of the questions. But I’m here. Hello. Hello. We are here. But I think there is some problem at bearing. What is the problem, madam? We can’t hear anything.
We have given our opening remarks. Mr. N also has spoken after that.
Arshia Khosla — Analyst
Yes, we heard. We heard that. Just. Just give me a second. Chorus team, there’s an issue.
operator
Are you able to hear me?
Mr. Soumitra Goswami — Chief Financial Officer
Yes.
operator
Okay. Thank you. Should we begin with the question and answer session?
Unidentified Speaker
Yes, we have said it twice. Please do start with the Q and A.
Questions and Answers:
operator
Yes. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star in two. Participants are requested to use answers while asking your question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Lakshmi Narayanan from Tunga Investment. Please proceed.
Ranjan Mathur
Thank you. So if I just look at your advertising expenses it’s almost to 285 crores or thereabouts, right? And in addition to it we also have the sales representative cost of around 126 crores or so for the last financial year. Now if I put this in context of the other companies like voltas, Bluestar, Whirlpool etc. Our advertising expenses is far high for the proportion of the sales they actually do. So I just want to understand. Is there an opportunity to actually balance between the 4,000 odd people you have as sales representatives at the counters, is there an opportunity to kind of reduce the advertising spend? Are we getting the right return on advertising budgets? That’s my first question.
Ranjan Mathur
What I’ve understood is you wanted to know why our cost of ad and promo more compared to Voltage and other companies.
Ranjan Mathur
Yeah. Yes sir. Yeah.
Ranjan Mathur
So. So let me first of all tell you that in our promo the CSR cost is also included which majority of the companies don’t include in their identity.
Mr. Soumitra Goswami
First. First please give give your name so that they know you are answering the question.
Ranjan Mathur
Right? Yeah. I’m Ranjan Master. I’ll be replying this. So I was trying to explain you is in case of add and promo expense. So that’s why.
Lakshminarayanan
But your CSR expenditure is also called out separately as other the other expenses. That’s in a separate line item. So I didn’t understand.
Kartik Muchandi
Sorry. When Mr. Karthik here from Finance CS. What Mr. Matu means is customer sales representative. The person who is there on the counter that cost as well. So on the there’s definitely opportunity to optimize the add and promo cost.
Lakshminarayanan
Okay. Okay. So that is.
Unidentified Speaker
Give them like clarity. Advertising cost is not 250 crores.
Kartik Muchandi
Yes. Our add on promo cost annually is around 100 crores. And we are working on reducing the add on.
Optimizing the add on promo cost by increasing the visibility with the same spend. We are also evaluating working with partners to help us how to reduce the. Cost and optimize the benefits from this.
Lakshminarayanan
Got it. So that is a expense of around 126 crores paid towards IFE appliances. Right. So that is your promo cost. Right. The CFR cost you’re mentioning.
Mr. Soumitra Goswami
Yeah. Yes. Correct.
Lakshminarayanan
So 284 minus 126. That’s still around 160 crores of advertising advertisement spends.
Kartik Muchandi
No, our advertising spend purely is 100 crores. Because apart from appliances we have another agency who also provides us customer sales representative. So if we remove that cost then our annual cost will be around 100 crores on ad spend.
Lakshminarayanan
So how many the
Unidentified Speaker
other party’s name. Karpit.
Kartik Muchandi
Yeah. The pattern name is Genius.
Lakshminarayanan
So what is the total number of customer sales representatives we have on counters?
Ranjan Mathur
Currently we have 4,000 odd customer sales representative across country.
Mr. Soumitra Goswami
Okay. Okay. But IFB appliances itself has 4,000 people. So genius is that plus this, right?
Ranjan Mathur
Plus.
Unidentified Speaker
Yeah. What is the total number? And then answer the question.
Ranjan Mathur
The total number will be around 4,600 odd. 600 are on genius roles.
Lakshminarayanan
Got it, sir. Thank You I’ll get back into.
Unidentified Speaker
Can you please give clarity what is. The advertising cost exactly?
Mr. Soumitra Goswami
Yes. Yes. Actually for the quarter we are talking about first quarter. First quarter sales promotion expenditure was 30 crores. Against last year 28 crore. It was increased by 2 crore only. That is due to increase in in shop branding in the dealer counter point 1.2 CSR cost has increased.
Unidentified Speaker
Out of the 30 crores. How much is advertising?
Mr. Soumitra Goswami
Sir, this is the full amount of advertisement. 30 crore is advertisement and cost for the first quarter against 20.
Unidentified Speaker
How much is advertising only?
Mr. Soumitra Goswami
Yes. Yes sir. We’ll work out and give it sir.
Unidentified Speaker
Give it now bring it. You can’t give answers. Vishal, carry on. Next we will like give you this answer. Just give us five or minutes please. Carry on please. The next question.
operator
The next question is from the line of Naved from Bastion.
Navid Virani
Yes. Yes. Thank you for the opportunity. Sir, if I look at our gross margins for the quarter and if I compare our gross margin with same quarter last year versus the previous quarter as well I can see some healthy improvement. Is this. Is this a correct understanding that the project which we have taken up with advertising Marshall consultant that has started to pay off the improvement we are looking for.
Kartik Muchandi
Yes, Karthik here. Yes, the project with Alvarez Marshall started from the 15th of Feb. In quarter one we have got a reduction of around 3.5 crores due to this project. But when you compare with quarter one of last year versus quarter one of this year there is a slight dip in the gross margin. This is mainly because compared to quarter one of last year there is a increase in commodity prices which is mainly in copper GP. Yes. And also there is a INR depreciation against US dollar which is around 3%. But this has been mostly offset because of the cost innovation whatever has been done.
And the net impact is that the material cost has increased by 65 basis point with respect to last year quarter one.
Navid Virani
Just to clarify. So the numbers which I have done. In Q1FY25 the gross margin was 38%. And in Q1FY26 which is this quarter I can see gross margin almost touching 40. So I have 160 basis point improvement here. So this is encouraging to see. And therefore the question which I wanted to understand is the improvement of different the improvement sustainable and can we consider 40% gross margin as a steady state number as we move forward from here?
Kartik Muchandi
Sir, are you referring to the appliance division gross margin or the company level gross margin? Company level gross margin is mostly driven by home appliance Division. Yeah. So then I will talk separately because the margins are not 40%. I’ll connect to you separately to give more details on this.
Navid Virani
And regarding the, you know, other operating expenses there is a sharp increase of around 73% on a Y basis. So just wanted to understand what are the, you know, factors that are driving this high increase because of our revenue just increased by.
Kartik Muchandi
Yeah. So as far as operating expense is concerned, as we explained earlier customer sales representative cost has gone up. This is because we have added 680 numbers of CSR compared to last year. Second, our professional cost and finance due. To engagement with A and m. And the third point is U.S. compliance cost and salary cost also has marginally gone up. So these three together, this four together has increased the. Sure.
Navid Virani
Thank you.
operator
Thank you. The next question is from the line of Lakshmi Aarayan from Tamna Investment. Please proceed.
Lakshminarayanan
Okay, I wanted to understand what is the total, you know, capacity for front loaders and top loaders and refrigerators in across our plants and what kind of utilization we are actually aiming at for this year.
Unidentified Speaker
Okay, this is goindra here. As far as the front loader is concerned we can make about 85,000 washing machines in a month and we will be touching about 95 to 100% capacity in the season. In both in August and September and October we should be able to touch 95 to 100%. As far as air conditioner is concerned we can make about 65,000 as of today.
And the peak, whatever we have touched on top March and April was we had touched about 100% utilization. And as far as refrigerate, as far as the refrigerator is concerned the plant has been built up about for 1. Million capacity and the peak we have.
Mr. Soumitra Goswami
Touched is about 50,000. That is about 50% utilization. And the season ahead we will be able to catch about 60 to 65% utilization.
Lakshminarayanan
Okay, this air conditioner you mentioned is per month I think, right?
Unidentified Speaker
Yeah, per month. Yeah. And.
Lakshminarayanan
And washing machine, what is the split between top loaders? Sir, can you just explain that?
Unidentified Speaker
Front load we have a separate line. A separate line for front loader. We are now going to touch about 85,000 in. In September and October. And in top loaders we have a capacity of making about 60,000. I think in the month of September we’ll be doing about 55,000.
So about 90% utilization.
Lakshminarayanan
The thing is that you know, when I actually travel, when I actually look at some of your products I see that the tie ups with some of the credit cards which you have is comparatively Less when compared to the which some of the other brands have. So have you looked at it in terms of, you know, again reworking or revisiting this particular thing in terms of a sale and how much that would actually, you know, shave off your. Your profits or so I mean if you think you have to, there is a subvention, something which you need to give etc.
And just touch upon your tie ups with credit cards on. On at least a lot of products itself.
Kartik Muchandi
Yes, we are working on this. As you said, we are strengthening our team on consumer finance and affordability so that our cost has to further go down. At the same time affordability to a customer is to go up and that is a sellout for IFB which will help us to increase our sales.
Lakshminarayanan
Okay, okay, okay. Now is it like will it hamper our, you know, gross margin because of this?
Ranjan Mathur
Look, this is Ranjan Master. In our case what we see is we have in our business of selling protection rather than selling cash count which is the trend in the market. So what we do here is we give our products at the right price and then give support in terms of cash discount. But that cash discount, what other brands do is they take the price and then they give cash discount and burn money. So we the impact will not be that much. The other brands will have.
Lakshminarayanan
Got it. Got it. Okay. Okay. And the third question which I have is that in terms of our services outreach, what kind of services network we have after sales network and then whether it is done on a franchise mode or on a company owned and how you have strengthened in the last one year.
Ranjan Mathur
Our service is basically on the franchisee mode. But the network is very strong. Pan India, right from JNK to Kanyakumari. The network is really, really good. And for instance to provide service within four hours of the campaign register. And that is what we all are driving.
Lakshminarayanan
So how many you have now? Like how much was it last year?
Ranjan Mathur
Just taking a minute. I’ll give you the exact.
Mr. Soumitra Goswami
I think it’s about 1400 if I’m not mistaken. But. But just check.
Lakshminarayanan
Sorry sir.
Ranjan Mathur
1530 franchisees.
Lakshminarayanan
Okay, okay. And. And they are all different franchisees. I believe every franchise is different. There’s not one group or two. Couple of.
Ranjan Mathur
No, we. We don’t entertain them.
Lakshminarayanan
Got it. Thank you sir. I’ll get back into you.
operator
Thank you.
Unidentified Speaker
Karthik also. Karthik also please look into this point. The franchisees are covering how many PIN codes?
Kartik Muchandi
Yes sir.
Unidentified Speaker
This is covering how many PIN codes in how much time. So how much? So how Many PIN codes in two hours. How many in three hours? How many? Four hours. And like that. Can you please differentiate it and come up with this another time?
operator
Thank you. The next question is from the line of Shirans.
Unidentified Participant
Hello. Am I audible?
operator
Yes sir.
Unidentified Participant
Sir, my first question is. Sir, I’m just looking at your refrigeration ramp up. So somewhere in the presentation we’ve written we’ve done about 1 lakh 18,000 units for this quarter. And on page 8 of this presentation we’ve said that we’re doing about 18,000amonth in refrigerators. Right. So 54,000. So I’m just trying to understand the differential. Is all OEM sales or all ref sales are branded sales.
Ranjan Mathur
There is another company which we have. I have refrigeration. So 18,000 is for IB.
Unidentified Speaker
Why don’t you explain properly, Karthik?
Kartik Muchandi
Yes sir.
Unidentified Speaker
It’s very simple thing. Explain it.
Kartik Muchandi
Yes sir. Sir, 118,000 is a total refrigerator manufacturer manufactured and sold by IFB Refrigerator where I Industries is holding 40%. Speak out of that. I Industries is approximately 18,000 per month.
Unidentified Participant
So the difference is what OEM says, sir.
Mr. Soumitra Goswami
Yeah. Difference. Show me. I’m just telling of TD. 1 lakh 18 thousand 161 is the figure of IFB Refrigeration Limited. And that is around 39,000. Around 40,000 per month. And IFB industry is selling. Has sold 36,000. Sorry, 54,000. That is actually 18,000. Is it clear?
Unidentified Participant
No sir.
Not able to actually understand
Mr. Soumitra Goswami
if the Reconsideration Limited is a separate company. Right. We are having a shareholding there of 41%. Correct. IB Refrigeration is directly selling to dealers, distributors through branches. And they are giving some material to IB Industries. Also IFB Industries is dealing to their dealer and distributor. Whatever selling. Whatever sales is happening from IFB Industries Limited. That is 18,000 per month. And in case of IB refrigeration it is 40,000 per month. It is not the question of balance quantities pertaining to OEM production. So the structure is really confusing. And so then it’s not confusing.
It’s not. It’s not confusing. IFB Refrigeration Ltd. Is a separate company. Clear. Is that. Is. Is that point clear to you? IFB Refrigeration Limited is a separate company. Is that point clear? Okay. If the Refrigeration Limited has sold 18,000 per month to IFB Industries Limited. Clear. Now suppose IFB Refrigeration Limited is hypothetically. Hypothetically producing 50,000amonth. 18,000 or beta to IFB Industries Limited or balance supports. Hypothetically under IFB Refrigeration Limited in different states where IFB Industries Limited is not selling it. You understood. And 2,000 went into stock. That’s the HISAB of 50,000 produced clear of revenue in quarter one.
Unidentified Participant
Is this IFB Industries revenue for 54,000 units? Right?
Mr. Soumitra Goswami
Yeah. Correct. Correct. Correct.
Unidentified Participant
So then are we trying to say. That we have two distributors. Two separate distribution teams. One in IFB refrigeration and one in IFB Industries for refrigerators.
Mr. Soumitra Goswami
If the industry sells refrigerators in certain states. Hypothetically let us say if these refrigeration is selling in Maharashtra. IFB Industries does not sell in Maharashtra. Yep. Okay. So IFB refrigeration has some people to sell it in Maharashtra. Correct.
Unidentified Participant
What would have been the volumes for us in air conditioners for the quarter one versus last year?
Mr. Soumitra Goswami
Yeah, Karthik, you can answer that.
Kartik Muchandi
Yeah. During the quarter we have sold. During the quarter we have sold one 15,000 air conditioner against last year one 29,000.
And as far as OEM is concerned we have sold 9,800 air conditioner versus last year 6,600. You take total cutting one 20,000 bps first quarter against last year corresponding quarter one 37,000. Yes. Then it will be easier for them to understand.
Unidentified Participant
My last question is what is the kind of cost savings we envisage in quarter two and quarter three? I think in the presentation we tried to mention that. But I think some of us missed. So what is the kind of cost savings that we bigger impact expected in cp?
Unidentified Speaker
Karthik, you can reply. We discussed this today.
Unidentified Speaker
Yes. This is Govindra here. I’ll explain the quarter two innovation. What we are expecting is will be to the tune of maybe about 15 to 20 crores. And we line with the target whatever you have taken for the fiscal year.
Unidentified Participant
Okay. And that run rate should ideally be continuing for the balance 3/4.
Unidentified Speaker
Yeah, it will continue and it should improve on. So that we are in line yearly target, whatever we are taking.
Unidentified Participant
Thanks and all the best.
Kartik Muchandi
Thank you.
operator
Thank you. The next question is on the line of Saran from advisors please.
Unidentified Participant
Yeah. Hi. Thanks for picking my question. Just a broad level question is that in terms of the market share except for the washing machines you are not material enough in the rest of the segments in the larger ones like refrigerator or ac. So how do you look at yourself in a very highly competitive industry when your market shares are very less how can you able to improve your margins sustainably and also have very good return ratio? Thank you.
Ranjan Mathur
So this is Anjan Master first of all along with watchers we have good market share in our microwaves as well as DishWashers. We launched AC and last year as shared in last meeting we sold 4 lakhs and here we intend to. We are targeting around here similarly in refrigerator in a span of two years we are now touching around 40,000 every month and we are targeting around 65,000 per month per share around 7 odd per cent.
Unidentified Participant
But even in your presentation you mentioned that by Defy 26 you want to be like 5% market share in AP and then probably now you are seeing refrigeration at 7% at that kind of market share when yeah, when the competition is like global peers like Samsung or LG or higher or my. We are. So is it possible for you to sustainably improve the margins from where you are or how difficult or how challenging it is? Experience tells us that in the last five years you guys tried a lot on the sales and improving the marketing but still the margins are still struggling.
So we just find where the challenge is. Is it subscale or is it because of something else or is it a problem of say what is the issue? We as investors think that this is primarily because of probably the lower market share is not giving enough of pricing power. That’s our adjustment. Is our adjustment right? Or is it somewhere something else to think about?
Ranjan Mathur
No. Look in this I’ll only say one thing in terms of air conditioners which we got in the category in last financial last one and a half years have been very good and this year also if you see despite of major drop in the industry we were able to sustain our volumes and same thing is with reference data in a span of two years we are practically touching 4%. Our biggest strength is our we work or we are working on improving.
Unidentified Speaker
His question is not that. Please answer. When people ask you all a question, one problem with all of you is you don’t answer the question. Answer the question. If you don’t understand the question, you ask him again to repeat the question. But he’s asked a very clear and factual question.
Ranjan Mathur
Can you please repeat the question please.
Unidentified Participant
My question is that except for the wash shows you don’t have a substantial market share in any of the products and this industry is extremely competitive. So with what I think the single digit market shares like 5% or 6% will you be able to have pricing power or not? And if not then can this be impacting your subscale? What I can say EBITDA margins which was there for quite some Time. So is it the right way to think about it? Is it something else or whether which we should think about?
Ranjan Mathur
So as I was telling you our market share in microwaves, our market share in dishwashers, our market share in cloth dryers are substantially at a good position along with our washers, top loaders which have after the launch of the new range we shared the market share have further matlab have started improving with regard to AC and rev as I just now shared now the question which you are asking whether we’ll be able to sustain the margins and pricing so in ife we firmly believe that we should give a good technology product and that product give us good sustainable volumes and that is what on that is how we are.
Unidentified Speaker
That is not his question. That is not his question. Can you answer the question? First you hear the question well and answer the question. Please don’t make up stories for the public. This is not a marketing meeting
Kartik Muchandi
sir, pricing power is not coming from the market share. If we see the new products what. We have launched also our market share. Is only going up and in front loading washing machine we are number one as far as the customer selling price is concerned. We have features and we give value for what price we are charging. In air conditioner as you know it is a crowded market there are more than 40 brands operating. If you look from the price point we are in top so lower market share doesn’t mean that our price point is discounted. So margins will not get impacted because of market share. And also in air conditioner if you see the market leader has around 20% market share so 4 to 5% market share is a good market share to start with which ultimately we want to further increase.
Unidentified Participant
Thank you very much. Thank you, really appreciate.
operator
Thank you. The next question is from the line of Udit Sehgal from Pinpoint X Capital. Please proceed.
Udit Sehgal
Yeah good afternoon sir Regarding the cost down measures in the last com call we had discussed that 200 crores we are targeting from the material cost reduction around 75 crores from the fixed cost reduction and 20 crores from the warehousing and freight reductions. So I wanted to know sir what’s. What’s the timeline on that and like from when do we start the start to see these savings kicking in.
Unidentified Speaker
Yeah, this is Govindra JR. He had already indicated that out of the 200 crores planned 85 crores will be approximately about 85 crores we will get in the fiscal year 26 and we are on track of that.
We will be able to achieve that 85 crores.
Udit Sehgal
And like you said that some part of it was available in Q1. But we could. I mean. But it was offset by the increase in material costs. So could that happen in the future as well?
Unidentified Speaker
Our estimate for the quarter two commodity price increase is not as high as what was happened in Q1. So we should be able to get substantial benefit from the cost innovation activities. Whatever we are doing in Q2. Mr. Govinda, please also inform them what you. What we did not do in Q1 which had led to this.
Why don’t you and Karthik give them visibility? What did we do wrong? Even though we could achieve about in terms of 1.6% cost innovation. But the commodity price increase happened more than that. So that there was a net increase in the material cost which not have happened. Our cost innovation more so that the impact of the commodity we should have been able to absorbed. Point number one. Point number two. The realization took some time which would have happened in Q1. Has moved to Q2 because of the validation we had to complete. No, Karthik, there is another point.
What did we do wrong? Yeah. Apart from that overhead cost has gone up. No. What did we do wrong on commodity pricing. Yeah. Okay. We have now. Mr. Govinda, you should be able to explain. You are the manufacturing director. What did we do wrong? You should transparently say what we could have done better is the control on the commodity price increase committee regular follow up. And the why the quantity and what measures we can take to mitigate that. We do it properly. We have now corrected.
Udit Sehgal
So if I understand correctly, sir, from FY26 you will get around 70 to 80 crores from the material cost saving. And for next year FY27 we will get the full 200 crores for the material cost saving.
That’s my understanding. Correct. Okay.
Unidentified Speaker
Yes. Yes. That’s correct. Okay. And second. No, that’s not correct. That. That is not correct. Total is 200 cr I think. Correct. Correct. Sir. Out of that out of 200cr this year you’re supposed to get 60 to 80. So balance will be only 120. For example, the total will get 200. Yes. So 120 plus 80 is 200. This is like a one time saving or it’s like a recurring saving since we have re engineered the products. Mr. Mr. Govinda, am I right or wrong? That’s right, sir. The savings are recurring only.
And target of overall 200. The realization will be about 60 to 80 crores in this fiscal year. The remaining will get which are recurring only. So. So ultimately.
Udit Sehgal
Okay. The recurring part will be around 120 crores. It will be 200 crores recurring part.
Unidentified Speaker
The recurring part will be about 120 crore.
Udit Sehgal
Okay. And with respect to the fixed cost that we talked about that we’ll be reducing around crores per month. And the warehousing and logistics cost. What’s the visibility on that?
Kartik Muchandi
Yeah, Karthik here. We have put in place a team for this. Along with Alvarez and Marshall.
We have identified areas of overhead cost reduction. And we are setting internal package for this. So if you say freight in case of freight. We have done trial on network optimization for Bangalore. The project is complete. Now we are rolling out payment. So we expect that the savings will start coming in from Q3 of FY26.
Udit Sehgal
And regarding the fixed expenses, is there any visibility on that?
Kartik Muchandi
Yes, this is for fixed expenses. Also. The same team is going to work on. And from Q3. We expect the savings to come in the P and L.
Udit Sehgal
And sir, if we look at the year on year sales.
The sales have increased but the margin has gone down. That’s because of the material cost increase or some other reason.
Kartik Muchandi
Yes. That should normalize going ahead. Since the cost savings will also kick in. Yeah. As we explained, cost savings are in the pipeline. Validations may take some time. But we expect to 80 crore to come in P&L in FY26. At the same time we have put in a team for a pricing company which will look into commodities and find ways to reduce the commodity price. So expect the effect of commodity price on future quarters to be much lower.
Or we expect a reduction in all this to add to P and L. Because our eventual target Is to reach 10% EBITDA margin is what been targeting. So with these cost savings you think in the next two or three years we can achieve that? Our intent is to hit double digit EBITDA in this financial year. In this. So that would be for the whole year. That would be like on the exit. Yeah. The first quarter we could not do. But we are working towards double digit ebitda. Okay. On a full year basis. Okay. Excellent. Right, sir.
Thank you. That’s it for myself.
operator
Thank you. The next question is from the line of Naveen Baith from Nuama Asset Management. Please proceed.
Naveen Baid
Thank you for the opportunity. My question is on the engineering division. What kind of growth are we seeing for the next couple of years? And what segment of the engineering division will drive that growth?
Unidentified Speaker
Mr. Narayan, can you be today’s question? Yeah, Narang here. Actually we are now looking at almost 3 growth. And we are also having time blanking. We are also having stamping. So we are now trying to improve both in time ranking as well as stamping. So we are also having plans. This year we are looking at a growth of around 20%. So and the next two years we are looking at around more than around 30% growth.
Mr. Narayana. Mr. He asked a question. You started off by saying 3x growth and then you said 20% and 30%. Does that add up to 3x? I’m just asking. You are from Sundaram Clayton. That is how you are answering A question. J.C. can you answer? J.C. can you answer, can you answer? If you can please show some light on. Are you there? I have just got cut off. I just joined. Can you please answer the question? I didn’t hear the question. Please can somebody repeat. Mr. Narayan said growth you are planning and then said you’ll do 20% this year and 30. 30%. Does 20, 30, 30 add up to 3x? No, it doesn’t. So what is your plan?
The. The plan is that we have to grow organically. Minimum 30% per annum. And also we have to grow through marginal acquisition route which we are actively pursuing. And we have already seen 48 companies and due diligence have been done for many. So apart from that we are also working on some breakthrough projects like which are new lines for example break this line etc. We are working on these which will give us additional revenues using the fine blanking methodology. Basically.
Okay. If you. If you see our margins. Our margins. Can I just take that? Sorry. Sorry. I’ll just agento try again. It’s important to learn how to present matters. Huh. You and the CEO both. There is a division sign blanking division. What is your plan for that? Explain to the shareholders what is your plan for stamping. What is your plan for electronic division. Why don’t you go step by step, have some water and present. Okay. Okay. So the fine. The engineering division basically has four verticals.
Now the primary vertical is the fine planting division which is about 600 crores. What will be the growth in that? Get to the point. So we are. We are aiming to grow it by 400 crores by the end of. By March 27th. New orders into the pipeline. 445 crores by March 27th. So these will come from new lines of business which is the brake based line as well as we are talking to increase our sprocket business with various OEMs. So. And we are pushing for newer businesses in the non auto sector. Also with companies like ABB etc. You don’t have to say all that, just explain what are the segments you’re getting into. Just explain.
So automotive segment as well as we are also now embarking into the non automotive and with the onset of EVs we are there is a thrust to keep our portfolio EV neutral so that we are suddenly not out of business. So gradually we see the onset of EVs in automotive horizon so we are aligned with that. So this is in fine blanking in stamping. Our plant is in Bangalore and it is working at full capacity. So there is a. We are adding some pressures in that facility there. But our we are also planning a new facility in north of India because most of the big OEMs are there including Maruti, Hero Motor, HMSI.
So we are planning a new greenfield facility there and we are also talking. To. Innovative new product contemporary products like the battery can for the these products. Also we are talking to the suppliers in Nickside and Tatas, Rafas. So we are in advanced stages of discussion and we are hopeful of pipeline in the near future. We have a vertical which we call the aftermarket that’s about close to 100cr. We make the chain and sprocket kits. The chains we were importing from China, the sprockets we were manufacturing in our sign blanking plant. Now the government is imposing some restrictions on imports. So our board has cleared investment for setting up a chain manufacturing plant in India.
We will do that but our chairman has said to get the organization right before we move ahead with the procurement of that. We are setting the organization right which will complete by the next 30 to 45 days and thereafter we will go in for and we hope to put up this plant in the next eight to 10 months. The supplier has been identified, the equipment has been shortlisted. We are in discussions with them. Very recently we have set up made a foray into electronic sector. We have named this advanced electronics division. We are making components for a global player, very big player who will be the ultimate consumer.
We have made a beginning and we are quite hopeful that this business will grow substantially for us. And we are also in talks with other electronic dealers. So we want to grow this segment also this is headed by a separate person who carefully independent vertical under the engineering division.
Naveen Baid
Yeah, I said a commerce question on this. So your margin saw a very sharp increase in SY25. So you expect this margin to kind of stay around this level or. Because you know in the past your margins have been volatile over the past 4, 5 so you see further improvements in margin from year round.
Unidentified Speaker
My answer to this question is the last two years we have been blessed with a stable commodity price. It has not been very. Now in quarter one this year the steel prices have increased by 3,000. So in the automotive industry it is the standard norm that we. Whenever there is an increase in RM input we get it from the customer. But there is a lag of quarter to happen here. So we definitely will defend the margins that we have been doing. But our target is to improve it further. And definitely we will do that.
Naveen Baid
Thank you. Thank you.
operator
Thank you. The next question is from the line of Natic from NV Alpha Fund. Please proceed.
Naitik
Hi sir. So in the beginning of the call you mentioned that our expenses have increased because you know, increase in sales representative and increasing Professional Legal services. Can you quantify these charges which has led to increase in, you know, below gross margin expenses on a company level? Yeah, Karthik, here expenses have increased by around 7 crore for the quarter. Professional fees have increased by 3 crore and e waste expenses is increased by another 3 crores. Sorry, last 3 crores you mentioned is for E waste. Second question is you briefly also mentioned about, you know, margins.
Gross margins had fallen in home appliances division. So that was primarily due to increase in RN cost or was there any other reason also? No, no. That was impact of commodity less recovery through cost innovation. Right. My next question is, you know, what sort of growth do we expect in the washer segment? You know, top load and front load individually and in RAC this year all three separately. You can quantify? Yeah.
Ranjan Mathur
So in case of float the growth what we are targeting is around. Initially in the financial year we were targeting from 25% growth. But the industry in front load is a bit stagnant. So we still feel that this retrieval season will be good and we’ll be able to recover our volumes and we’ll. Be. Will be growing by around 20 to 25%. In top loader we have been able to. With the launch of new range we have been able to grow at a much higher level and have been able to gain the share here we invested around 35 odd percent growth for us which will be better than what industry and we’ll be able to gain some market share. Refrigerator. Sorry, Air conditioners. You asked in air conditioners there was a drop of 30% plus in the industry in first quarter. But what we feel is our first of all our. We were able to sustain our volumes compared to industry and what we feel is from quarter three and quarter four we Will be able to get the volumes which we had lost in quarter one.
So then we in this age growth of around 25 to 30% in.
Naitik
And so my last question is what. What sort of market share do we currently have? You know, in rag segment.
Ranjan Mathur
We marginally gain we are at around 3.3.5%.
operator
Thank you. The next question is from the line of Lakshmi Narayan from T Investment. Please proceed.
Lakshminarayanan
Yeah, thank you. You mentioned e waste provisioning. So approximately what is the amount you would provision for the full year?
Kartik Muchandi
Yeah, our monthly cost is around 2 crores. So will be around 24 to 25 crores.
Lakshminarayanan
Got it. Got it. So the savings would be after accounting this only, right? The savings we are talking about. Yes. The second question is that in terms of our compressors, you know, have you, have you. Have we secured compressors for both rifts and ACs for the next as we expand. Because there has always been some shortage in terms of compressor capacity in India.
How secure we are in terms of the supply chain?
Unidentified Speaker
Yeah, we are here. We are aware of the demand supply gap in compressor but we are. We are already in discussing with a manufacturer and as of today we are secure with the quantities, whatever is required in the for the season.
Lakshminarayanan
Got it. Can you just help me ask what. Is the capital structure of the driver? 40% is owned by IFB industry. So what is the 60%?
Mr. Soumitra Goswami
I think individuals. Individuals are owning about about 20 odd percent and others in promoter group are owning significant shares. Okay. Promoter group meaning the one declared to CBS Promoter group. They are. They are owning shares.
Lakshminarayanan
Okay. And the rest is by the employees. You mean to pay the 20
Mr. Soumitra Goswami
various individuals? Yes.
Lakshminarayanan
Okay. And is there a plan to kind of consolidate it at some point in time? Like there are.
Mr. Soumitra Goswami
I think, I think, I think now if you look at the overall thing, refrigeration above a threshold volume makes positive EBITDA etc.
As we’ve said, 55 to 60,000 is what we must sell to make, you know, decent amount of money. Hopefully we will get there soon and we hope to at least consolidate it in the near. In the near term. Near term meaning maybe in the next six to 12, 12 months. Hopefully subject to board approvals.
Lakshminarayanan
And are we strong in DC or. No frost in the refrigerator.
Mr. Soumitra Goswami
So we now make more of DC but the no frosting is increasing because we are producing more of that now. We are launching the 328liter very soon and after that we will launch other models. Our brand Prism ideally should have. I mean our ideal structure would have been to launch the Higher end models first because that’s what IFB stands stands for. But then when we were conceiving the project we realized that if you don’t do the lower end also to succeed in this is going to become very, very difficult. So going forward we will do more of the high rate.
Lakshminarayanan
Got it. And one last thing on washing machine. So have we, you know, I mean do we still manufacture the fully drive driven washing machines or. Actually we have moved to completely motor driven.
Mr. Soumitra Goswami
We have moved completely to bldc. Completely bldc.
Lakshminarayanan
Thank you so much.
Mr. Soumitra Goswami
Thank you,
operator
thank you. Due to time constraints, that was the last question. I now hand the conference over to the management for the closing comments. Over to you sir.
Unidentified Speaker
I think one of the things, one of the things we have to say is. Sorry, I’m just going to sum up something. Performance has been built relatively weak and all and most of the participants have asked a question what happened to the issue on cost, commodity cost etc. Etc. And I think whilst we were working with AM on cost down, the team that was supposed to handle commodity price etc got refocused and some slippages have happened there and that’s an area that we need to tighten. I think that let us down on the fixed cost increase.
If you see increments were given etc. Which had to be done. But areas where consolidation or work etc should have happened have not happened as fast as it should have and that’s also an area of slippage. So we have slipped. AC of course got affected due to the monsoons. I think across brands in other categories in various areas we’ve still not tightened and changed management where required. That work is still WIP and we’ve been very, very slow at it. Hopefully in this quarter a lot of that will get fixed permanently. Shamito, anything else?
Mr. Soumitra Goswami
No sir.
Thank you very much to everybody for participating in this call. We will meet again after quarter two. Thank you.
operator
Thank you on behalf of Nirmal One Equities Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.