Ifgl Refractories Ltd (NSE: IFGLEXPOR) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
James McIntosh — Managing Director
Arasu Shanmugam — Director & CEO-India
Amit Agarwal — Chief Financial Officer
Analysts:
Unidentified Participant
Sahil Sanghvi — Analyst
Lakshmi Narayanan — Analyst
Mayank Bhandari — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the IFGL Refractories Limited Q1FY26 earnings conference call hosted by Monarch Network Capital Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risk 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 Star then zero on a Touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Network Capital Limited. Thank you. And over to you sir.
Sahil Sanghvi — Analyst
Thank you, Ziko. Good evening everyone. On behalf of Monarch Network Capital, I welcome you all to the Q1FY26 earnings conference call of IFGNB Factories Limited. We are pleased to have with us the management being represented by Mr. James McIntosh, Managing Director, Mr. Aral Sushan Magam, Director and CEO India and Agarwal Chief Financial Officer. We’ll have the opening remarks from the management followed by a Q and a session. Thank you. And over to the management for the opening remarks please.
James McIntosh — Managing Director
Yes. Good evening ladies and gentlemen and thank you for joining us on the IFG out refactories limited Q1 FY26 ending bunsens call. I hope you and your family and friends are in good health. Along with me on the call we have Our Director and CEO India, Mr. Arasu Sherman and Mr. Amit Agarwal, our CFO as well as SGA, our investment relations Advisors. We have uploaded the results and presentation on stock exchanges and I hope every one of you have had the chance to go through. IFGL Refractories began the year on a healthy note, delivering strong performance in both a standalone and consolidated basis.
Achieving the highest of our quarterly revenues on a year. On year basis, Standalone revenues grew by 14% while consolidated revenues rose by 10%. Standalone EBITDA stood at 37.7 crore with margins of 13.5% while consolidated EBITDA was 39 crore translated into margins of 8.5% amid well reported global headwinds. India continues to outperform, backed by strong economic fundamentals and maintains its position as the shining star of the global steel industry, recording a 6.3% growth year to date as the world’s second largest producer. This reinforces the decision we made in 2021 to prioritize our domestic market growth. Our India Made India sole strategy has driven a 32% increase in standalone domestic business reaching 213 crore.
We remain confident in India’s growth potential reflecting and our ongoing capex investments in the country. Amid the ongoing global volatility. We are encouraged by early signs of improvement in some of our subsidiaries, particularly in the United States. The recent policy direction from President Trump focusing on Made in America includes a doubling of steel tariffs from 25 to 50% under section 2.3ko Decade Expansion Act. This move aims to boost domestic steel manufacturing by protecting US producers from foreign imports which we expect will positively impact our American operations by strengthening local steel production. Our UK operations in Sheffield are reporting are performing well.
The planned Sheffield technology sandstare is on track to complete completion by quarter three of this year and will enable us to bring advanced technologies and new products to the ending market. Additionally, the ongoing restructuring of British Steel is expected to open up positive opportunities for us on the monocon side. Our restructuring program is well underway with our new leadership team. Our new product development focus is beginning to bear fruit with industrial side orders received after very encouraging trials of many of our customers. We have opened new sales channels including wholly owned subsidiary in Australia which will enable us to capitalise from growth opportunities there and finally the creation of a new team focused towards refractories and technology begin to make their influence sell.
We believe that we will see positive figures within the next two quarters and then beyond. We will be in a position to grow our business and profitability. Our German operations continue to face pressure among the ongoing European economic slowdown in the foundry space. As discussed last quarter. We remain focused on navigating this challenging environment by actively exploring alternative applications for our foundry products to diversify our opportunities While market conditions remain uncertain, we are confident that once stability returns to the region our strategic initiatives will start delivering planned benefits first. Now I would like to hand over to Arasu for his comments on our developments in the India region.
Arasu Shanmugam — Director & CEO-India
Thank you Jim. Good evening ladies and gentlemen. I am pleased to share that we have delivered our highest ever quarterly revenues which is 278 crore first time in the history in first quarter of FY26 with this standalone revenue up 14% in the first quarter. Domestic revenues grew strongly by 32% to 213 crore while exports stood at 63 crore down 22% on year. On year basis profitability was lower compared to last year primarily due to higher raw material cost which are now showing a sign of stabilization and increased employee cost following organizational changes we implemented over the past eight nine months which is an investment in human resource.
Building on an organization two years prior to the actual revenue generation is paramount importance for company in growth path. It is also important to note that Q1FY25EBITDA has been benefited from one time provisional reverse of about 3.5 crore related to specific customer which is not reflected in the current quarter numbers. Moving Ahead Our prudent decision a few years ago to focus on on the Indian domestic market is now delivering strong results. India continues to stand out as the bright spot in global steel industry and indeed the global economy with GDP growth estimated over 6% ahead of any major economy.
As mentioned by Mr. McIntosh, our strategic domestic focus has been supported by steadily with capacity expansion and last year we took another important step by entering the non ferrous refractory segment. We see this as a high potential growth driver for the future, offering significant opportunities while helping us diversify our product portfolio. A dedicated leadership team is spearheading this initiative and we are confident it will add meaningfully to our long term growth trajectory. On the CAPEX front, our greenfield project at Kurga Varissa has been kicked off and is expected to be completed by the end of financial year 2728 with a project cost in the range of 300 to 350 crore.
Our Gujarat Greenfield project joint venture with Marvels currently under regulatory approvals and is targeted for completion by the start of year FY29 with an estimated cost of around 300. This JV focuses on non ferrous refractories primarily producing basic fired Magnesite spinner brick, basic fired Magnesite brick, fired magnesia chrome brick and other basic bricks. This expansion will strengthen our product portfolio and open new growth opportunities. Moving ahead I am pleased to share that during the quarter our research team in India could internalize and implement the technology provided by our subsidiary EIC in America for developing a cold start SES for slab caster, the newly designed solution for cold start operation in steel plant.
Ongoing trials have shown encouraging results with the design demonstrating stability in most cold start scenarios. This innovation directly addresses real world challenges in steel casting and reinforces our commitment delivering high performance reliable solutions to customers worldwide during the quarter we also inaugurated a 60 ton per day fully automatic continuous tempering kiln for Magnesia carbon production at our Weissat unit. This milestone enhances our ability to manufacture high performance Magnesia carbon brick for steel making, ensuring superior performance, longevity and reliability in high temperature applications. Our technology transferred from Sheffield to another subsidiary is progressing well and is expected to be completed by third quarter this year.
This will enhance our product capabilities and enable us to supply products that are currently not manufactured in India. Our experts are actively working on the process and we aim to complete it at the earliest possible time. Our total refractory management offering also gaining traction and we are actively engaging with few steel plants in this space. We believe we have immense potential to deliver. Despite the global scenario, we remain confident in our long term growth story. With this I hand over to Amit to for financing performances.
Amit Agarwal — Chief Financial Officer
Thank you sir. Let me give you a brief on the financials starting with standalone financial highlights. Total income in Q1FY26 stood at 278 crore raising a strong 12% year on year growth. Our highest ever total income during the during any quarter EBITDA for The quarter was 37.7 crore decline of 15% year on year growth. The decline in EBITDA and margin was primarily driven by ongoing global healing, elevated raw material growth and higher employee expenses resulting from structural changes and team expansions at various levels.
Additionally, operating expenses increased due to new plant. It is also important to note that Q1FY20 fund EBITDA including a provision reversal as mentioned by Mr. Rasul of around 3.5 crore related to some customers which was not present in the current project. EBITDA margin the 13.5% for Q1FY26 profit after tax in rupees 14.7 crore in Q1FY26 declined by 33%. Breaking it down further by geography, our domestic business recorded an almost 32% year on year growth in Q1FY20. The domestic market now contributes around 77% of our standalone revenue in Q1FY up from 67% in Q1FYNDA. Our export business saw 80% decline in Q1 largely due to economic slowdown and demand across three overseas market. As a result for contributed 2023% to our standard revenue in CAS and psycholosis down from 33% same period last year.
Let me now move forward to consolidated financial highlights. Our consolidated financial highlights also include our international subsidies. Total income for quarter one FY26 grew by 8% year on year reaching 257 crore. Our EBITDA is between 79 crore for the quarter are declining by 26% on year. On year basis EBITDA margin of 8.5% in quarter FY26 profit after tax 2 that 10.8% for Photoman FY6 found by 3.6percent on year on year. With this I shall now leave the floor for question and answer. Thank you. Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. If anyone wishes to ask a question, may press star and one on the Touchstone telephone. If you wish to remove yourself for the question queue, you may press star and two Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from Lakshmi Narayanan KG with Tunga Investments. Please go ahead.
Lakshmi Narayanan
Thank you. We had a very impressive performance in the India standalone. Want to understand. You talked about raw material issues. So which raw material exactly you are talking about where the prices have been, you know, elevated. Can you just give a. You know from a what kind of price escalation you actually got and how are the prices trending now? Raw material.
Arasu Shanmugam
You see, when I said raw material, we said raw material as a bigger items. But actually it should be called as total input cost. Let’s say, you know, most of our operations wherever is there. Even the labor cost increase, you know, every quarter six months there are increases. Barring that alumna family, it is available in public domain. You can see the kind of alumina price increase all over the world. And that has definitely a major impact. In addition to that, various other raw material such as some of the power consuming raw material like fused raw material.
Wherever power is highly consumed. Again, even various countries, they put power what you call surge charges which also finally affected. So in a nutshell, anything which is involved with diffusion, all raw material, primarily aluminum and magnesium phase in addition to that other input. So everything is stretched.
Lakshmi Narayanan
How are you feeling it right now? Is it? We are already in the middle of August. So do you think that pressure continues in this quarter and you think that it is settling down or how is it?
Arasu Shanmugam
So it is actually now, let’s say instead of earlier, we used to see continuous increase. Now wherever it has reached, it is stabilized there no much kind of an increase. You know, we are foreseeing right now.
Lakshmi Narayanan
What is being the percentage increase in raw materials. If you can just elaborate.
Arasu Shanmugam
I mean it’s different for different raw material and it’s putting up, you know, a single Figure combining everything will be difficult. I would say it is that level. I mean it’s not a pinpointable, you know, it varies and it’s a mix effect.
Lakshmi Narayanan
Okay. Like Armina alone. Like how much it has actually gone up for us.
Arasu Shanmugam
No, I think those, you know, very. We can discuss later. But I said, I mean. Yeah.
Lakshmi Narayanan
And in terms of your India standalone business, can you just give a split of you know, how much is flow control and how much is the running mass etc broadly?
Arasu Shanmugam
No. I don’t have any. We don’t have that. But you know, as you know IFGN is predominantly a flow control company. Definitely a substantial portion of revenue comes from flow control and Allied which covers isostatic slide gate ladle, you know, flow control, zirconia nozzle and other things. And that’s always a major source. In addition to our new nc, whatever. We have just explained in the introduction part, you know, we are also entering into the non ferrous web. The bricks and monolithic comes. But still we are at no control, you know, selling company predominantly. And to become a balanced one it will take two years down the line after the time our projects are, you know, delivering products and sales. I mean for me it’s what’s been important in the growth of IFTL since 2021 is to not only grow our business in India but also to grow the breadth of products which we manufacture. I mean it’s absolutely clear. And you know, prior to 2021 the focus of IHGL was flow control. And you know, flow control was very much on the fingertips of everyone. But since then we’ve added, we’ve added mag carbon bricks, we’ve added high alumina bricks, we’ve added casting plugs, we’ve added a wide range of precast shapes. We’ve added products in many different areas.
So for us it’s less important to talk about percentage flow control. It’s more important for us to talk about when we’re in the business in general.
Lakshmi Narayanan
Yeah. And another question is that you know these revenue growth which you are actually getting in standalone, are you gaining market from, you know, are you displacing a company or all These are all like greenfield client engagements.
Arasu Shanmugam
Mostly the all growths are through gaining market share in the existing as well as spreading our total management model to new already running steel plants. Not much of Greenfield project. You know, revenues.
Lakshmi Narayanan
And the goodwill return off will continue till which quarters?
Arasu Shanmugam
This is the last year. After that There is no Q4.
Lakshmi Narayanan
Yeah. This year it will be closed. Thank you. And I’ll Come back in.
operator
Q thank you. A reminder to all participants if you would like to ask a question please press star and one on the touchstone telephone. Our next question comes from Harsh Kesha with the Lal and brochure. Please, please go ahead.
Unidentified Participant
Yeah thank you for the opportunity. A few questions from my side. So firstly great work on the domestic side. Just wanted to check here. I mean in terms of the strategy in the domestic market is it a case that you know we are focused more on you know gaining more market share at the cost of aggressive pricing. So why I asked this question question is because one of your listed player has been you know kind of calling out since many quarters in that in general the competition is kind of undercutting. So wanted your thoughts on it.
This is absolutely. Sorry. If someone could. I mean I couldn’t hear.
Arasu Shanmugam
No, no. Our managing director mentioned just know it is our strategy and competition will we also have the same feeling. Okay, so other competitors are cutting but in spite of that we have our strategies of increasing market share. So it’s not what you mentioned. What the other competition mentioned is incorrect and it is basically because of our different strategy which also I would say that we won’t elaborate much on that. But you ignore what they have said.
Unidentified Participant
So basically what you’re trying to say is that you are not undercutting, right? I mean to be very precise then absolutely not. Got it. And also I mean do you have any, some you know kind of a data point in terms of what your market share could be within the flow control in India.
Arasu Shanmugam
We don’t have that figure immediately calculated.
Unidentified Participant
So. Got it. Then secondly say for any like to like products between say if GL or any of your peer how would you rate your product now that you know since last four years you have been you know kind of bringing a lot of changes. So how would you compare in terms of say performance or tech to your peers and also if you could do you have any you know low hanging fruit in terms of the product portfolio or something which you would like to highlight on that.
Arasu Shanmugam
On performance part of whatever you ask we are at par or some places we are better because that’s the real selection criteria of customer. So you can’t be an underperformer and still gain market share. Right. So that is on the first part. On the second part definitely we have, you know you have I already mentioned in my opening remark about our entering into non parameters. So it’s going to be a balanced portfolio spread out across all the factory consuming instead of just depending on A particular small narrow portion of steel value adding shape. So it’s going to be a balanced.
As we move ahead on the performance front, I have already told we are at par with the international players or better and that’s the key and the main reason and enabler for our market share improvement.
Unidentified Participant
Got it.
James McIntosh
And also if I could just add, you know, every area that we as a company have looked at entering our first starting point is to look at the obviously the performance in the market and the reason that we invest so much in research and new product development is to create products which compete in the market favorably from a performance point of view and also from an economic point of view. Some of these new products will create for the customer value in different ways depending on the customer. Our objective always is to look at the market and to decide and determine what is the best way for us to grow in that market in the most effective fashion.
And now IFGL today after, you know, certainly the last four years is in a much better technical position than it has ever been to capitalize on growth potential and new opportunities than it has ever been. And we aim to continue doing that in all of the areas that we are concerned with and all of the new product areas that we are looking at is to grow our business by performance. Got it. Just wanted to add the.
Unidentified Participant
Yeah, yeah, you’re right. Absolutely. Okay. And also sir, if you could, you know, kind of help us understand. Right. I, I, I mean you have mentioned in the PPT that the new projects would you know, start contributing say from FY28 and onwards. But if one has to say, understand how, you know, say FY26 and FY27 could pan out. This just for our standard operation which is purely the Indian part. What are the growth levers? I mean, I mean how should one, you know, consider in terms of what growth projections or maybe if you can help us understand from where, you know, we’ll be able to, you know, grow the, in the similar manner which we have, you know, kind of done in the past few quarters.
If you could help us, you know, deep dive at least on the Indian operations. Operations, how. What is the plan for the next two years till the other projects come on stream?
Arasu Shanmugam
No, no, because next two years, as I was mentioning, we are going to considerably grow in our non ferrous alumina plant which is already running from Gujarat, you know, till the time our basic plant is getting ready. On the other side, like what our MD mentioned just now, leveraging the research and that thing, how we are going to Improve our product and performance so that we gain more market share. I mean you know very indication is like we used to have some 14, 15 customers on total refractory management basis. Now it has grown to 21, 22 and it will grow, grow further.
So it’s leveraging the product sector and the research for enhancing our market share in existing customers as well as finding new customers in the green space as well as growing in non steel till the time are going to come.
Unidentified Participant
Correct. I mean I understand. So another way of asking, I mean if you could help us understand what would would be the average capacity utilization for us Ballpark. I don’t want product wise just in general overall company level within India.
Arasu Shanmugam
You see in the factories particularly when we have a full range layer, it is very difficult to put one single number on capacity utilization. Okay, so, so I don’t think I can give you a single number on capacity utilization.
James McIntosh
And yeah, I mean so safe to assume that. I mean I think that obviously the efforts of IFGL to grow in the domestic space has been focused towards new product development, new areas of investment. We’ve invested heavily in all areas of flow control. We’ve invested heavily in all of the new product areas. And of course when you invest in production capacity then that enables you to be in a situation where you can grow the business. Now our objective over the next few years is to grow the business and we don’t have any more exposure expansion plans for our current product rate.
That gives you an indication that we have plenty of capacity. Also if you look at our augeta for the future it’s to introduce more new products and these will come as a result of our investments in the new joint venture that Arasu mentioned earlier and also the development of new plant in Costa. So you know there’s an awful lot of growth potential for us and most of the investment that we have in our existing businesses, for example on the ISO side is purely technical. It’s upgrading the technical capability of the product. But it’s just safe to assume that. Upgrading the technical capability.
Unidentified Participant
Yeah, so safe to assume that in the standalone you can grow in excess of 15, 20% for the next two years even without any incremental capex.
Arasu Shanmugam
You are right.
Unidentified Participant
Okay, got it. I will get back in with you. Thank you.
operator
Thank you. Thank you. A reminder to all the participants if you would like to ask a question, ladies and gentlemen, please press star and one on the telephone keypad. Thank you. Our next question comes from Sahil Sanghvi with Monarch Network Capital limited. Please go ahead.
Sahil Sanghvi
Yeah, Good evening. Thank you for the opportunity and congratulations for good numbers, especially on the domestic side. Now we are upwards of 70% exposure from the domestic market. So my first question is this time what we see is that the revenue numbers and the EBIT margin from America has improved substantially after a very long time. So if you can just highlight what were the factors leading to this and how sustainable is this.
James McIntosh
In the United States? There has been very much a positive change in sentiment since President Trump. We see a very much more buoyant market as a result. If you were to look at the United States back in the last term of President Trump, it was very positive for the steel industry. Very positive for the steel industry because obviously when you have tariff protection against low priced products coming from other countries, this enables the domestic manufacturers to really focus on developing. Right. And there is tremendous investment in the Nucor Group, SBI and various other groups. You have the very positive Nippon Steel deal with US Steel. So there’s an awful lot happening in America and the steel industry, which is all very positive for, for suppliers. And obviously that’s where IFGL benefits because we have three specific businesses in the United States which are focused on the steel industry and both of them are seeing very good improvement. And we believe that will continue. We believe that will continue very positively from now.
Sahil Sanghvi
Right, sir, Right. And secondly, I wanted to understand, I mean on the new products that we have introduced, Magnesia bricks and Moonflex powder, I mean how are we doing on that front and what kind of ramp up do we see on that?
Arasu Shanmugam
We do see a very good ramp up rate. Like for example, we are expecting to in another four, five months we may reach a very good level in Magnesia. Carbon traction is very good. And I know our performances wherever we supply are definitely very, very encouraging compared to the existing vendor. So it gives us an opportunity for taking a sizable share from there. So that definitely is goes back and costing flex because it is, you know, critically for customers. So there the trial phases are all full on. It will get little, you know, longer time on the commercial order and ramp up.
But, but they are all in the expected level both or on the expected rate of, you know, ramping up is taking place.
Sahil Sanghvi
Right sir. And check this 3.5 crore gains that we’ve received. Is it from Underbody’s team?
Arasu Shanmugam
Yeah, yeah. And some other.
Unidentified Participant
Okay, okay, understood, understood and okay, understood. Thank you so much. I’ll come back in the queue if I have more questions. Thank you.
operator
Thank you. A reminder to all the participants, you may press star and one to ask a question. Thank you. Our next question comes from Rahul Kumar Singh with Prabhudas Leela, the private limited. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Arasu Shanmugam
Your voice is not clear.
operator
Submit. Sorry to interrupt you, sir. Yes. Sir, may I request you to use your handset please. Sir, your audio is not clear, sir.
Unidentified Participant
Okay. Yeah. I just want to ask that Europe has lost rapping before. And this partner also used to show that the 8.69 crores loss. So when you read that in next three quarters your projection you are going to come doing any project or anything or something like down for Europe only.
operator
You’Re using a bluetooth device. May I request you to use your handset, sir? Disconnect.
Unidentified Participant
Actually my question is Europe is a project of yours from last three or four quarters. Can you elaborate this? Hello.
Arasu Shanmugam
You are talking about Europe.
Unidentified Participant
Hello.
Unidentified Participant
Are you talking about Europe? We couldn’t hear you properly.
Unidentified Participant
I’m sorry, I can’t understand. I’m afraid.
operator
The participant has left the queue. We’ll move to the next participant. Before that I would request a reminder to all the participants. If you would like to ask a question, please press star and one. Our next question comes from Mayang Bandari with amsec. Please go ahead.
Mayank Bhandari
Sir, if you could highlight what does this regulatory approval mean for the ifgl? Marvel jv.
Arasu Shanmugam
So Marvel jv isg. And the regulatory means what? You know, we already acquired the land and in Gujarat there are steps, you know, converting agricultural into non agricultural. And then from non agricultural to, you know, industrial use. So that processes are all moving. And the other regulatories in that line it is moving but parallel. You know there are other jobs which are simultaneous in nature. Right. Without even preparing your project, selecting, you know, the process line and equipment, all those things are moving simultaneously. So I would say that we are not losing any time in that. But simultaneously the work is going on. Once the regulatory is over, then the work will start. And then we will meet the committed time of nbfy29 that we are going to be.
Mayank Bhandari
So I think as of now we are targeting FY28 where we will see the contribution from the basic bricks in this.
Arasu Shanmugam
And 29 is for JD.
Mayank Bhandari
So 29 is then okay, this is postponed because of regulatory approval thing.
Arasu Shanmugam
Yes, yes.
Mayank Bhandari
Secondly sir, what is the contribution from? I mean in terms of tonnage? If you could highlight from the alumna bricks and magnesia bricks both in one Q.
Arasu Shanmugam
I mean that we are not doing. We have just started the business.
Mayank Bhandari
I think last time you had given 400 number four.
Arasu Shanmugam
I think monthly production and sales, not the contribution.
Mayank Bhandari
Okay. And if I look at your annual reports, she field as you kind of remain flattish in terms of revenue. If we compare with FY24 and we have also seen profit on profit of only 2 crores from Shearfield as per FY25 annual report. Could you highlight to what could be the future growth expectation in this going next two, three years in terms of revenue growth as well as profit?
James McIntosh
Yeah, I mean obviously Sheffield’s results over the last year or so were affected badly by the blast furnace. They’re very big in blasphemous and they were affected by, you know Scunthorp artist Steel Scunthorpe going to a one blast on this operation for a period of time. Now that the second blast fire this is back up and running. You know, we’ve returned to normal situation as far as growth in the future is concerned. As Arasu mentioned earlier, there are a number of projects which Sheffield specifically are working on with IFTL India to bring new technology to India especially on the iron making side and also on the non Ferris industrial side of the business which is new for us, that will be a positive for them.
And also we have restructuring of our Monocon operation. We are creating sales outlets and organizations which will not only benefit monopon but also seek to help the Sheffield operation to grow its business in other market areas that they have not been so far. So we see a very positive future for Sheffield for sure.
Mayank Bhandari
Okay. And if you could touch upon again on the EA ceramic part where we have seen very sharp drop in the profit on FY25, 24 number is 13 crore profit and 25 is only 5, 6 crore of profit.
James McIntosh
I’m sorry, I don’t understand that. I’m asking questions. It is. Yeah, I mean e house dynamics for sure on the American side, you know, certainly last year there was, you know, the profitability and sales were hot. You know, so far this year, I mean we’ve come back very, very strongly. You know, I think sales wise, EI ceramics is up about 25% on sales over last year. And you know, profitability is up by a huge amount. I can’t even give a percentage there. But not EIC Ceramics is definitely back so far this year with very good results. And we, as I said earlier, expect that to continue to continue in the future.
Mayank Bhandari
Okay, thank you sir. I will join back in the.
James McIntosh
Thank you.
operator
Thank you. Before we take the next question reminder to all the participants, you may press star and one to ask a question. The next question comes From Harsh Kesha with Dalal and Brosha. Please go ahead.
Unidentified Participant
Yeah, thanks for the question. Follow up, if you could help us maybe quantify any contribution from the non Ferris segment in Q1 as of this.
Arasu Shanmugam
I think that is just the starting point. We have done so nothing major. We have long plans to grow into.
Unidentified Participant
No, I. I get that point. I’m just basically trying to understand whether we are doing any sort of, you.
Arasu Shanmugam
Know, not available with us to share publicly that kind of contribution or the percentage of non penis and products.
Unidentified Participant
Got it. Okay. Secondly, on the gross margin front, so how should one, you know, look at the gross margin improvement? So basically what I’m trying to understand is when do we feel that our high cost inventory, you know, would be are completely consumed by which quarter?
Arasu Shanmugam
I think see it has to be. Seen like this that what Rasul has mentioned that what we see that we have almost seen this peak of input cost and we do not foresee much of you know, increase in input cost in future that major input cost increase. So maybe by this quarter we’ll be, you know, consuming all our high inventory cost or something like that.
Unidentified Participant
So basically from Q3 we should ideally see improvement in gross margin. 16 remain the same as it is now.
Arasu Shanmugam
Maybe. Yes.
Unidentified Participant
Okay. And have we got any sort of say price hikes in some of the products or how is how has been the situation on that front?
Arasu Shanmugam
Yeah, we got price increase on product definitely in some of our flow control area from you know, June, July. So which will reflect in coming quarters. Not in all but few places. Yes.
Unidentified Participant
Okay. Also I mean in terms of the consolidated EBITDA margin. Right. First usually, I mean say probably a year back, you used to kind of guide for 12% plus kind of concerned margin. How should one look going forward? Because I mean even though you’re growing very well in the domestic market. Right. But the operating leverage is really not being seen at the margins as of yet. I mean just wanted, you know, get some thought on that. I mean how should one look at the margin profile on a company level?
Arasu Shanmugam
I think we still look at double digit margin profile at consolidate for this year. Yeah.
Unidentified Participant
Okay. And lastly, last question from my side. What is the tax rate? Because I mean for FY26 and beyond. Because what we are seeing is that it’s constantly in excess of 25 odd percent. So anything?
Arasu Shanmugam
No, it’s 25% effective tax rate is.
Unidentified Participant
25% 25 only on the console level.
Arasu Shanmugam
At standalone level console we have different taxes.
Unidentified Participant
Okay, got it. Okay. Yeah, that’s it. From my side thank you.
operator
Thank you. Thank you. Ladies and gentlemen, that was the last question for today. As there are no further questions from the participants I now hand the conference over to Mr. Sahil Sangvi from Monarch Net Worth Capital Ltd. For closing comments. Over to you, sahib.
Sahil Sanghvi
Yeah. Thank you. On behalf of Monarch Network Capital I would want to thank the management for. Patiently answering all the questions and also would like to thank all the participants. For joining the call. And also sir, would you like to give any closing comments?
James McIntosh
Yeah. We hope we have been able to answer all of your queries and I look forward to participating in the next call. For any queries you may contact sga, our investor relations advisor. Thank you.
Amit Agarwal
Thank you.
Arasu Shanmugam
Thank you.
operator
Thank you. On behalf of Monarch Network Capital Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. It.