V-Guard Industries Limited (NSE: VGUARD) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Mithun K. Chittilappilly — Managing Director
Sudarshan Kasturi — Senior Vice President & Chief Financial Officer
Ramachandran V — Director & Chief Operating Officer
Analysts:
Aniruddha Joshi — Analyst
Aditya Bhartia — Analyst
Rahul Agarwal — Analyst
Naushad Chaudhary — Analyst
Ankur Sharma — Analyst
Keyur Pandya — Analyst
Ankit Soni — Analyst
Natasha Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to VGuard Q3FY26 earnings conference call hosted by ICICI Securities. 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 your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Aniruddha Joshi from ICICI Securities. Please go ahead, sir.
Aniruddha Joshi — Analyst
Yeah. Thanks Nehsa. On behalf of ICICI securities, we welcome you all to Q3 FY26 and nine months FY26 results conference call of VGuard Industries Limited we have with us today senior management represented by Mr. Mithunke Tilapilli, managing director Mr. Ramachandran, V director and chief operating officer and Mr. Sudarshan Kasturi, senior Vice President and Chief Financial Officer. Now I hand over the call to the senior management for their initial comments on the quarterly performance and then we will open the floor for question and answer session. Thanks. And over to you, Mithun sir.
Mithun K. Chittilappilly — Managing Director
Yeah. Thank you. Good afternoon everyone and welcome to this earnings call. I would like to thank Anuruddha Joshi and the team at ICICI securities for hosting today’s call. We will be discussing the operating and financial performance for the third quarter and nine months of FY2526. I trust that all of you have had the opportunity to review the investor presentation shared earlier. The business delivered double digit top line growth in the third quarter primarily driven by the electrical segment. Consolidated net revenue from operations for Q3FY26 stood at 1404 crore reflecting a YoY growth of 10.6%. The electrical segment, our largest revenue contributor comprising of wires, pumps, switch gears and modular switches reported robust YoY revenue growth of 26% growth which was volume led by volume expansion and also supported by higher copper prices.
The electronics segment which includes stabilizers, UPS systems, inverters reported largely flat revenues of 286 crore in Q3FY26. While some summer led categories continued to witness muted demand. This decline was offset by growth in other categories. In the consumer durable segment comprising of fans, water heaters, kitchen appliances and air coolers, revenues grew by 4.6%. Yoyo water heaters performed well during the quarter even as demand for fans and cooling products remains subdued. Sunflame reported a YoY revenue decline of 9.9% in Q3 FY26 reflecting the continued softness in the kitchen appliances category. Demand in The CSD channel continue to be weak.
The operational integration of sunflame has been completed and sales integration is currently underway which is expected to support growth and acceleration for the brand going forward. Gross margin for the quarter stood at 35.7% compared to 36.7% in Q3 FY25 reflecting a contraction of 100 basis points largely arising from the mix. Impact margins have remained resilient during the quarter. We foresee some input cost increases coming up and the company plans to undertake calibrated pricing actions across the product portfolio in the coming quarter. EBITDA excluding Other income for Q3FY26 stood at 123 crore representing a YoY increase of 18.3%.
EBITDA margin improved to 8.8% from 8.2% in Q3FY25A expansion of 60 basis points pursuant to the notification issued by Ministry of Labour and Employment regarding the New Labour Codes, the Company reassessed its employer benefit obligations accordingly. An incremental charge of 22.11 crore towards gratuity and leave and cashmere provisions have been recognized as an exceptional item during the quarter. As a result of this one time impact, the consolidated PAT for Q3FY26 stood at 57 crore compared with 60 crore in Q3FY25 representing a y o y decline of 5.2%. On an underlying basis, consolidated pack improved by 22% YoY.
Our working capital position remains healthy which led to strong cash flow during the quarter. In terms of CapEx, the fan manufacturing facility and the second battery facility both in Hyderabad are two key projects in the pipeline. These will further increase the share of in house manufacturing. We look forward to the upcoming summer season with the expectation to deliver strong results. With that I conclude my opening comments. I would like to thank Anuruddha Joshi and the team at ICICI securities for hosting this call and would like to request the moderator to open the floor for Q and A.
Thank you.
Questions and Answers:
operator
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 and 2. Participants are requested to use hand zips while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Aditya Bhartia from Investec. Please go ahead.
Aditya Bhartia
Hi, Good afternoon. Mithun. Mithun. My first question is on the performance of south versus Non south wherein in this particular quarter we have seen fairly strong growth in south while non south. Appears to be a bit muted. Is there any particular reason behind that and is there any change in competitive intensity in either of these regions?
Mithun K. Chittilappilly
No, I don’t think there is any change in competitive intensity. I think it’s just that last year Q3, the non south region, especially east had a very strong performance for summer categories. So last year, last financial year we had very, very strong performance from summer certain parts of non south, especially east for summer categories and this year I think they have degrow. So that’s primarily pulling down the non south performance. But otherwise, you know, we are not seeing any major change in the intensity of competition.
So it’s a base effect issue.
Aditya Bhartia
Understood, Understood. And secondly, in this particular quarter we. Have seen employee expenses going down. So is there some reversal of provision or something that we should be aware of? There’s a fairly sharp reduction both on a year on year as well as. Quarter on quarter basis.
Mithun K. Chittilappilly
Yeah. So Darshan, you want to take this?
Sudarshan Kasturi
Yeah. So there’s been a reversal of some variable pay provisions. So which is why the goes down. It’s something we review in Q3 every. Year depending on how the nine month results look. We then take a call whether, you know, payout is likely or not.
Aditya Bhartia
Understood? Understood. That’s very, very helpful. Thank you so much.
operator
Thank you. Anyone who wishes to ask a question may press star and one on your touchstone telephone. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Rahul Agarwal
Hi, good evening everybody. Just one question was on the downside risk in terms of, you know, this entire inflation on commodities except plastic. I think, you know, a lot of metals are seeing, you know, very substantial sharp hikes. Is the market ready enough to take, you know, absorb these price hikes which we’re planning to do and I’m sure everybody else is also planning the same thing. And would you agree that temporarily these gross margins might come under pressure? Any thoughts around this?
Mithun K. Chittilappilly
So we see, you know, some risk in the fan category where this impact is very severe coupled with new energy rating norms kicking in on 1st of January. So there has to be significant price hikes. In the fan category we have already taken some increases and I think another, you know, two or three odd percent of increase is required before March. The other categories the impact is not so high because the usage of copper and aluminum is not so much and steel and some of the crude derivatives like plastics have actually softened little bit so which is, you know, making These impact little less.
Wire as we have mentioned before is a dynamic pricing. So all the price increases and decreases are passed on to the market with a short line. So really I think the consumer durable segment is where we feel there could be some challenge. Other categories we don’t at this point we don’t feel it so much. Yes, there is, there is a price increase that is required but it’s not. The quantum is not that high. But for fan category it is.
Rahul Agarwal
And for stabilizer, how does it work from a raw material perspective?
Mithun K. Chittilappilly
Stabilizer, I think Ram, you want to take this?
Ramachandran V
Yeah. Stabilizer will be about you know, maybe one and a half to 2%. So generally in most. I think even in fan. Right. The problem is for you know, the copper models, right. BLDC or aluminium based model, the increases are lower. And if you have high performance based fans where the copper content is high, you know that, you know is an issue. Okay. You know the, the extent of pricing required is larger.
Rahul Agarwal
Yeah. Thank you for that. Got it. So, so basically what you’re saying is in case this inflation continues we’ll take price hikes and that should take care of margins. Is that right? Understand?
Ramachandran V
Yeah, yeah, yeah. So we have, we have started to initiate price increases. I think we have passed on some price increases. Fans we have passed on. We have taken some price increase in pump in Jan and some categories we are doing in Feb and some we will be doing, you know, towards the end of March. So and we will be landing all of these things typically, you know, in you know, in some of the categories it’s about you know, 2 to 3%. And you know, fan is the one that is fairly significant. If it is, you know, copper based models.
Rahul Agarwal
Right. And are salience to copper based kind of fan mix. What would that be overall.
Ramachandran V
We should maybe about 20%, 25%.
Mithun K. Chittilappilly
Yeah, about 25 to 30% would be copper. Copper based. Others are all either aluminum or BLDC and aluminum models.
Rahul Agarwal
Got. Thanks for that. And the secondly on wire, what was the volume and value growth separately within electricals and how has been Jan so far? Is the momentum sustaining on volume growth.
Mithun K. Chittilappilly
The wire right now, you know there is a significant increase in price copper prices. So the trade is also incentivized to upstock January also we have seen continued increases in copper prices and we are also in the process of revising prices. So Jan also there has been decent offtake. Volume growth is muted but value growth will be there because it’s almost I think now 30. If you look at Jan or Jan it’s almost 30%, you know, increase in prices. So. So volume growth could be muted but value growth is definitely there because the ability for retailers to invest does not increase so much as with increase in prices.
And we are also seeing some softening of demand from project customers who are, you know, who at this price are not too confident to buy in large quantities.
Sudarshan Kasturi
For for December quarter on your question the price growth was about 20%. Volume growth was 10%.
Mithun K. Chittilappilly
Yeah, 10 and 20 for December.
Rahul Agarwal
Got it. Perfect. Thanks Sudarshan. Thank you. Thanks Ram. All the best. Thanks.
Mithun K. Chittilappilly
Thank you.
operator
Thank you. Anyone who wishes to ask a question may press star and 1. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah sir, regarding the fans, now we will see material price hikes in the copper waste fans or aluminum fans also. And the gap between induction fans versus the BLDC fans may come down. So do you see the BLDC fan as a category? The attractiveness of BLDC fan as a category itself may go up materially and that might be impacting the largely the induction fan players and some of the new age players who e commerce players who are largely focusing on bldc. They tend to be at a slight advantage or in such a scenario what will be strategy of vgaard as far as the BLDC fans is concerned? And then one important question.
Do you see a threat to induction as a technology itself the way it happened in case of CRT televisions or bulbs like that.
Mithun K. Chittilappilly
So definitely the delta that means the difference between a BLDC and non BLDC is shrinking because BLDC fans require less, you know, the motor design is very different and it requires less, you know, content. And most of the motors are made out of aluminum. So in that sense the BLDC fans price inflation will be relatively low and the induction copper motors will be the highest. So definitely like so today for VGuard maybe the BLDC sales may be 25 odd percent of total sale. We will see that steadily increasing. But I don’t think 100% will move to BLDC because BLDC still has some challenges or some acceptances issues.
For example upcountry markets, you know, where there is violent voltage fluctuation and all that. Not all the BLDC fans are working properly there. We have certain models which are, you know, able to work in, you know, low voltage and high voltage conditions. But not all the companies have such models. So among the trade and among the customers there is a general pushback for BLDC in certain markets. So we will probably see, you know, induction motors still selling, but the percentage of induction motors is steadily coming down. Maybe we can see 5 to 10% reduction in the size of the induction motor fan towards BLDC in favor of BLDC every year.
And that’s what we expect. And Vega is well acute. We caught this trend at least three, four years back and we have very good offerings in the BLDC segment and we continue to have pipeline products in the pipeline to launch and we have the right models to attract customers to the segment. So definitely yes, BLDC segment will grow, but I don’t see it becoming 100% soon. Maybe after a few years. We’ll see because as of now we still have certain markets where customers are not fully accepting, you know, build.
Aniruddha Joshi
Okay, sure sir, just last two questions before I get into the queue. You indicated there is a high channel inventory of wire. So if you can indicate the quantum compared to a normal inventory level, what is the currently the excess inventory? Point number one and point number two, how do we read butterfly numbers? Because now profitability has improved but again the revenue dip continues to be there and again profitability may get under stress with the increase in commodity prices. So how should we see or model the numbers of Sunflame over next? Let’s say three to four quarters.
Yeah, that’s it from my side. Thanks. So wire.
Mithun K. Chittilappilly
Yes, there has been some upstocking by the retailers, but it’s not that a lot of them are holding that inventory. Many of them have. When you’re looking at inventory levels of distributors, they’ve sold out but definitely they are holding more inventory than you know, in a price deflationary environment. Ram, you want to take this question about Sunflame margins?
Ramachandran V
Yeah, yeah, yeah. So we are right now in the process of Sunflame sales integration which started actually about two months back. When I’m talking about, about sales integration, we’re talking about integrating the sales force and the go to market system between Sunflame and VGuard. So this quarter is the quarter when the transition, I mean it started somewhere around November of this year. So I think, you know, when you look at a full year basis, we will have decent growth both in GTE and also in I would say organized retail. It is, it is taking time for us.
You know, we, I mean we have lost some ground in CSBCPC for challenges we have already discussed earlier. And you know, that’s the segment which is under pressure and E Commerce is also taking a bit of Time because we need to refresh the product portfolio. So that work is underway. We have been working on the product refresh roadmap of sunclaim and I think you know, starting now over the next one year and I think already some newer models have landed also and some more are landing the next 12 months. So I think I would say that, you know, you know sunflame is, you know, more or less.
I think, you know the, the challenges are behind us and you know we look forward very optimistically. We have completed the customer service integration and you know our service levels have significantly gone up. That was a huge pain point, you know, because the cycle times were long and you know it was, you know and we also had issues with spares and all of those things. So those are all behind us now and you know they are. The new customer service system is, you know, now three to four months old. Yeah. Supply side integration is also underway in parallel and you know this quarter and next quarter I think you know, the integration will get complete there.
Yeah. So I think you know we should be able to perform much better going forward. Landing pricing has not been a challenge as far as sunframe is concerned. I think we have been able to hold our gross margins, we have been able to transmit pricing. So that has not been a challenge at all at any point in time. Mainly the stress has been because we have not been able to, you know, the product refresh cycle is long because it takes about 18 months to refresh the know portfolio. Right. So those actions were late to start for various reasons and you know, the impact of that will be felt as we go through the coming year.
Aniruddha Joshi
Yeah, for sure sir. This is very helpful. Many thanks.
Ramachandran V
Yeah, thanks.
operator
Thank you. The next question is from the line of Naushat Chaudhary from Aditya Birla Mutual Funds. Please go ahead.
Naushad Chaudhary
Yeah, hi. Hope I’m audible sir. First thing wanted to understand on the Giga 10 battery startup, how is that doing and how can that you know, help our base business in the future and is there any scope for, you know, emerging any new category with the help of that startup?
Ramachandran V
Yeah, yeah, yeah, yeah, yeah. So I think I know Gigadyne was, you know, you know Gigadyne is a technology company. Right. And you know that’s, you know the technology evolution has shaped well and you know they have now, you know, with the limited ability at this stage. Right. They have been able to start to make supplies for a couple of local players, small quantities, you know, as a proof of concept and so on and as also they will they will be supplying to us in some time. Yeah. Maybe over the next three months or four months, I think they will start supplies to us also in small quantities.
Yeah. So I think that is the. So. So they are now moving from, you know, what I would say technology development phase to commercialization phase, days at this point in time. Right. And they are evaluating and exploring. Yeah. The, you know, how to set up a supply chain that can be scaled up to address business and market opportunity. So I think that’s. That’s where we are. And we continue to support them in technology development and, you know, in, you know, helping them to find a pathway for, you know, building a supply capability.
Naushad Chaudhary
Assuming, if it goes well, how will this, you know, benefit or strengthen your base business in the future?
Ramachandran V
No, I think, you know, see, it. It will. It will give us a vehicle to participate in, you know, opportunity that will come by way of what I would say, energy storage. Right. So we’ll see how that market develops and, you know, it will be possible for us to participate in that opportunity. And the scope of that opportunity will depend around how the market develops for the new energy offerings.
Naushad Chaudhary
Okay. Second, on the competition side, especially in the Southern market, we have been hearing the intensity in that market is increasing. Just wanted to, you know, qualitatively check in terms of a market share, especially in your core categories, are we holding up in the Southern market? Are we gaining or are we finding it difficult to hold on the market share in the Southern market?
Ramachandran V
You want me to take that?
Mithun K. Chittilappilly
Yeah, yeah, yeah. Yes, please.
Ramachandran V
No, I think, you know, see, I think, you know, competitive intensity has been expanding from somewhere around 2016 or 17. So it’s been a continued, continued process. Right. So. So I think, you know, to that extent, I think, you know, nothing different. I wouldn’t say that there is a particularly strong increase in competitive intensity. I think we see what happens is Southern markets, you know, the trade structure is better organized. Right. The organized retail is well developed in south, and E commerce is also well developed in South. Right. And because of these two factors. Yeah, it’s, you know, market entry is easy, relatively. Right. We are able to reach a larger portion of the market, you know, through these two vehicles. That being said, the consumers in the southern markets are quite discerning. So it’s not that easy to build healthy franchise. So you could make entry by way of maybe aggressive pricing or something like that. But it will be very difficult to sustainably run business because. Because these channels also have very high cost of doing business.
Right. And all are also competitive yeah. So at this point in time, I wouldn’t say, you know, in any of the categories, you know, we are losing ground. Yeah, I think, you know, in fact, you know, some of the core markets we have, like, you know, we’ve had strong growth. Also we may have some problems from time to time, you know, in one or the other market, which may be related to, let’s say, you know, talent attrition or something like that. Those kind of, you know, sporadic things will be there. But nothing fundamentally, you know, I wouldn’t say that, you know, there is fundamentally any loss of ground, you know, from an overall perspective.
Right. And generally, okay, there are some years, you know, because a lot of our categories are also connected to, let’s say, you know, weather and you know, those kind of challenges. And, and in a country like ours, this is not uniform across every part of the country. But generally we have found, okay, one year we don’t do well, next year we do very strongly well. And when you look at a three year growth or a five year growth, we are fine. So I wouldn’t say that there is any systemic issue at this stage.
Naushad Chaudhary
Two more questions, sir. On the margin side, just wanted the remittance and commission. As we have expanded the gross margin though this year cycle was not in our favor. But assuming if growth comes back in double digit, should we expect our margin, EBITDA margin to go double digit in within two years?
Mithun K. Chittilappilly
I think so. I think if our growth does come back, we should be expecting double digit EBITDA margins.
Naushad Chaudhary
Yes, by FY27 and
Mithun K. Chittilappilly
it will depend. On couple of things. One is the raw material inflationary environment. I’m hoping that, you know, by that time this, you know, sudden spike and all that is going to get normalized. Then in that case we should be able to, you know, come back to double digit month.
Naushad Chaudhary
Sure. And last one, we have, you know, done amazingly well in terms of our stabilizer ups, water heater. But in the newer categories we have been, you know, slightly struggling. So in terms of strategy, our playbook, is there any differentiation we are trying to bring on the table which, you know, might be slow in terms of ramping up these category, but once you reach to the size as you have reached in the base business would be very difficult for the competition to challenge. So just trying to understand, are we just, you know, trying to play like any other MeToo player in these new categories to get the growth and a little bit of time from here and there or is there any differentiation we are trying to, you know, bring to These categories which can, which can help you to be a better player in next couple of years.
In the newer categories,
Mithun K. Chittilappilly
as far as. Kitchen is concerned, once the integration with sunflame is complete, we expect to have very strong, you know, both product portfolio as well as the sales team and a sales system to enable us to, you know, grow faster than the market. And we are putting all the building blocks in place for that. Some of the other categories we are working on, we are also doing some work on modular switches. You know, where we are again working on some, you know, product refreshment and all that. Some of the other categories have already done well. So for example, both in the case of inverters, solar, rooftop and fans, we have had very decent growth in the last six to seven years.
So our current focus is to, you know, improve sales of kitchen and you know, modular switches. These two segments have not done as well as we hoped. So definitely we are doing some work and we hope to, you know, see some results.
Ramachandran V
Yeah, Amiton, I’ll just add the two more points. Right. See, fundamentally, you know, our gross margins are decent in all of these categories. Right. So we are. And comparable with, you know, market leaders. Yeah. So I think the acceptability of the brand and the acceptability of the offering and the willingness of consumer to pay the price, you know, all that is fine. The other part then is that, you know, it is not reflecting in ebitda. Right. Because you know, these businesses have to scale up and you know, they will take their time to scale up and you know, as each of these business scales up, they will become profitable so that it’s more a scale issue. Yeah. Even though, you know, our, you know, mostly are referring to consumer durable categories and even though we have scaled, you know, lately, but still, you know, you know, pre. Covid. Post. Covid. It’s gone up. But at the same time, you know, there are challenges. These categories are also, you know, strongly influenced by weather. So you have a good year, a bad year. You know, that is one issue that is there in these categories also. Yeah. So it’s, you know, it, it. And since it’s a seasonal category, you know, the significant window is like a four month, five month window as opposed to some of the other categories where we have a 12 month window. So these are. Yeah, yeah, these are some of the challenges. Yeah. So fundamentally I think, you know, the, it’s, it’s not an issue of the margin or pricing or positioning.
It’s a matter of scale up. And once the business, you know, acquire certain scale, I think you know, the help will fall in place.
Naushad Chaudhary
Just on. Follow up on that only. I was just trying to understand whether your new categories offer similar kind of scope of, or opportunity to bring differentiation to the market which may, you know, help you to dominate the market share as you have done in your past few products, or would it remain a very competitive market and you have to operate at par what we are operating on that aspect I was trying to understand, is there any space you see to dominate the newer categories as well?
Ramachandran V
No. So, so we have a, you know, so, so we have an active, you know, product pipeline. Right. And of course, you know, we continuously try to, you know, know, strengthen our product pipeline and, you know, improve our refresh rates. Right. So that’s a continuous exercise. You would have seen that, you know, you know, we, we launched LexCube. Yeah. Right. Now we also launched a, you know, popular, not popular, I would say, you know, mid premium platform in BLDC fans. Both of them were launched, you know, this season and they have done exceedingly well. Right. They’ve exceeded our plan for the year.
Yeah. So I think, you know, so this is a, this is a continuous exercise. Yeah, this is a continuous exercise. And as you can see, right, this year, summer was not great, you know, so summer categories, including fan, was impacted. Yeah. So although, you know, the underlying movements are good in some of the categories, the overall, you know, maybe dampened. I think, you know, this is. See also what is happening is, you know, we are, you know, as the time is progressing, looking at the future opportunity, we are also investing in those businesses. Right. We are putting people on the ground, Right.
We are making investment in retail. So all of those things are happening. So if we were to hold a business static, right, Then, you know, whatever improvements we make, we can show in the bottom line. But we continue to invest in those businesses. Right. And you know, those, when we invest in the businesses, you know, that impact of that, you know, has to be absorbed on a smaller business. Right. So, so that’s the thing. So that’s why I said fundamentally not a problem of margin, it’s a problem of scale. So when we hit the right scale, like inverter battery, now, we make good money because we hit that scale fan.
We will hit the scale maybe in a couple of years. And when we do that, we will make money in fan just as others do. Like that is how it will go. Right. So those categories that we make money, we have the scale in relation to the category, you know, size. Yeah. So, so we’ll have to hit those Numbers, of course, you know, we can force the pace by putting more money but in our experience, you know, you know, we found it a lot more easier to, you know, balance and take time to build the category.
Right. So that the fundamentals are strong.
Naushad Chaudhary
Sure sir. Thank you so much. All the best.
Ramachandran V
Okay.
operator
Thank you. Anyone who wishes to ask a question may press star and 1. The next question is from the line of Ankur Sharma from HDLC Life. Please go ahead.
Ankur Sharma
Hi sir, good afternoon and thanks for your time as always. First question was on the overall demand over the next two to three quarters and the context being, you know, given we are in a fairly inflationary environment and as you mentioned, both for fans, obviously for wires, that’s a continuous process where you are taking significant price hikes. Would you believe that volume growth also may start coming down? Something we saw post Covid as well when we had this highly inflationary environment and the industry targeting price hikes and for quite some time in fact volume growth started to kind of suffer.
So would that be the same kind of environment in the next few quarters as well?
Mithun K. Chittilappilly
So definitely in the case of wires, you know there has been a significant increase in prices to the tune of close to 30 odd percent. So definitely there this argument that you know, volume growth, volume for the product demand could take a hit is true. But the other, you know, 75% of categories, the price inflation is not that high. So we don’t expect any much impact on the volume growth going forward. And the second thing is the next big trigger is the onset of summer. So by February we have a decent start to summer in south India and we have a continued warm temperature across during the summer.
We should be largely okay. And the expectation as it stands today from imd, the metrology department is we will have a fairly warm summer this year. So that’s what we are expecting. Wire. Yes, because there has been significant price inflation, volume growth could be a challenge. But then this is a product that is required and it is not a vgaard only problem. All copper wires manufacturers have to increase prices. So finally, you know, people who are constructing something and you know, building wiring something will have to purchase it. But yes, there is a, there is a fear because the quantum of increase is very high.
Ankur Sharma
Just to kind of follow on that one. So even on fans with the 8, 10% price hike, assuming a normal summer, you think that can be easily passed on and volume growth should.
Mithun K. Chittilappilly
So fan the major price hike is happening for copper models and models where we are using only copper and high performance models. So we See a shift for demand from those models to BLDC where the price increases are much lower. So in fan at least, you know we will see a more movement to BLDC from the traditional induction, you know, copper based model. So, so fan like I said, all the SKUs there is not going up at the same rate. You know, only certain SKUs. This kind of inflation is there.
Ankur Sharma
Fair and just on stabilizers. Could you talk about the inventory there within the system given more than half of the inventory. So the stabilizer sales is for acs. So how’s the inventory there and, and any initial feelers you’re getting from the southern markets in terms of how the coming summer could be? Typically by the end of Jan we start hearing initial trends. So yeah, anything you can highlight would be helpful.
Mithun K. Chittilappilly
So stabilizer inventory is largely normalized. You would have seen that our working Capital management in Q3 has been fairly good. So a lot of the inventory that we had produced last summer is a lot of them have started to get liquidated. The preliminary report from the ground is, you know, Kerala at least we have started to see warm temperatures. We are hitting like 32 to 33 degrees, you know the daytime which is pretty, pretty warm for January. So the expectation is this will continue and this is fairly good news as we speak. But then again, you know we have to wait and see till we complete the quarter.
But yes, the, there are the, the we have started to experience warmer weather in, in down south.
Ankur Sharma
All the best. And yeah, that’s very helpful. Thank you.
operator
Thank you. The next question is from the line of Kayur Pandya from ICICI Prudential Life Insurance. Please go ahead.
Keyur Pandya
Thank you for the opportunity. Actually question is again on the demand side. So specifically for two segment electronics and ecd. So probably because of the low base of last year in both the categories for some of the products like stabilizer coolers and fans, I mean is it logical to believe that the growth should be easily in the double digit at least for the next financial year and within the backdrop of low base plus newer categories like solar inverters, etc. So that is first question on the growth side for both, both of these segments.
Mithun K. Chittilappilly
Yeah. So electronics segment within that the air conditioner stabilizer segment at sharply degrooms year. The same is for air coolers. So for both these products we are expecting strong rebound in the current year. The base is already low. As far as solar rooftop is concerned, they continue to do well. I mean we have not had a big slowdown in the sales of that Category because that is not fully dependent on summer. So that will continue its regular trajectory. It is a category that is growing fast. The entire category in the country is also growing fast.
So we are very bullish about solar rooftop business. So this is what I can say about the demand side.
Keyur Pandya
Understood. And second on the profitability for both of these segment, I mean as you mentioned the fans and specific categories of fans has high inflation. The rest of the portfolio have has manageable inflation. Plus in electronics, I mean in the weeks year like FY26, whatever margins that you have mentioned. So is it fair to believe that whatever margin we see for say FY26, FY27 should be either similar to that or better margins than that FY26 just because of the operating leverage in both of these segment.
Mithun K. Chittilappilly
So that is our expectation. But one caveat is there, I mean today we are in a fairly uncertain environment as far as commodity prices are concerned. We have not seen this kind of an increase in copper, you know, in a single year, you know, going up by 40%. We have not experienced something like that in a. At least I have not experienced it in the last 17 years. So they’re talking about a very, very volatile commodity environment. So if the commodity doesn’t violently go up from these levels, whatever you’re saying is possible. But that’s one caveat we have to hold because we had that issue in 2023 when the Russia Ukraine war broke out and commodity prices skyrocketed.
So that kind of a situation today it is mainly copper that is going up and aluminium, other commodities have not still gone up. So. So we’ll wait and see. So but I think in my sense, yes, we should do better than in FY27, better than FY26 is what we feel because of the better summer category contribution and operating leverage
Keyur Pandya
in terms of profitability, right?
Mithun K. Chittilappilly
Yes,
Keyur Pandya
for profit margins for this. Okay, thanks a lot and all the best. Thank you.
operator
Thank you. The next question is from the line of Ankit Soni from Mirai Asset. Please go ahead.
Ankit Soni
Hi sir, thanks for having my question. Just one question on the solar business side since we have solar inverter, rooftop inverter business and the panels business. You also mentioned that VGAD is more looking into enter into solar pumps business as solutions. So any forward move over there?
Mithun K. Chittilappilly
So we have started to participate in the tenders for solar pumps and I think we have got our first order and we are in the process of completing it. It’s not a very large order, but we tend to in the next 12 to 18 months, scale it up meaningfully. So we have already started to supply to I think Maharashtra for Solar Pan. And we intend to scale up this business going forward. We have already started. It is already. Yeah, we are already processing.
Ankit Soni
Can you please let me know the quantum of the order ones please?
Mithun K. Chittilappilly
It’s not, it’s not very large in my view. It was some 4. 4 crores or 5 crores. 4 to 5 crores. It’s a small order. It’s not a very large order.
Ankit Soni
Yeah, okay, fine sir. Yeah, but you look visible green shoots for the company to expand in that particular sector.
Mithun K. Chittilappilly
Our acceptance has been very good. I think we have just, you know, putting in baby steps today. But I think in the next 12 to 18 months we hope to build a solid business in this category.
Ankit Soni
Sure, sir. All the best. Thank you.
operator
Thank you. The next question is from the line of Natasha Jain from Philip Capital. Please go ahead.
Natasha Jain
Thank you for the opportunity. So my first question is on stabilizers. So could you tell us what is your market share in that category and who are your exact peers here? Also we observed that in calendar 25 a lot of newer brands had come in. I mean I even saw Volta for that matter coming out with stabilizers. So how do you see competition in that segment? That’s my first question.
Mithun K. Chittilappilly
So the, you know, we estimate that we have a market share of about 40 to 45%. This category is fairly niche in that sense. The only serious competitor we have today is a company called Microtech which is into inverters and batteries. Based in Delhi. They are probably our closest peer, maybe doing about 150, 180 odd crores. Almost all the air conditioner companies have stabilizers. They have at some point they will launch and then they will stop. Then they will launch again and then they will stop. So I think this, this, I’m pretty sure this is not Volta’s first time they’re launching.
You know, they’ve launched in the past. Yeah. So the thing is this is more of an ancillary income. So this is probably. It is not. So all the air conditioner companies have stabilizers but usually they tend to lose focus a few years down the line. So that’s what we’ve seen in the past. But as far as serious competitors are concerned, we have one brand which is called Microtech. Then we have a lot of regional brands in each state. But I would say nationally maybe one brand is there.
Natasha Jain
Got it. And sir, one related question to this, little bit longer term. So nowadays we see that ACs come with an in depth stabilizer. And I have also heard a lot of influencers trying to educate people on this that you do not need to buy an extra stabilizer. So do you think, is that a risk and if so, by when will it start impacting us on a larger scale?
Mithun K. Chittilappilly
So this is a debate that’s been going on for 15 years. It’s not a new thing. And to put it in perspective, you know, last seven, eight years we have had a volume CAGR of seven, 8%. So even last five years we’ve had a volume CAGR of 10%. So we still very strongly track the air conditioner sales. We are selling more in upcountry markets and that’s where the more growth is coming from. So the newly electrified villages, the hinterlands of north and east, where electrification is new, where also power issues are more. So these are high growth markets for us.
So I mean your guess is as good as mine. So we have reduced dependence on this category significantly. So today it’s less than 15% of our sales. It used to be much higher 10, 20 years back. So we have diversified a lot away from this category. But to your question, when it will go out of relevance, your guess is as good as mine. I mean we keep debating this and it’s been going on for more than 15 years. And all we can give you is the last 5 year, 10 year CAGR numbers.
Natasha Jain
Got it. Sir, just to clarify, you said less than 15% of your total sales, right, Currently for stabilizer?
Mithun K. Chittilappilly
Yes.
Natasha Jain
And may I know what it was, say three years back it would have.
Mithun K. Chittilappilly
Probably been the same, but if you look at 10 years back, it would have been longer. At some point it was 60. Yeah. Like in maybe you know, 15 years back it was about 50 odd process.
Natasha Jain
Got it. And so one last question on kitchen appliances. Is there still very severe competition coming from the unorganized or unlisted side players or has that eased out?
Mithun K. Chittilappilly
You’re talking about kitchen appliances.
Natasha Jain
Yeah, kitchen appliances.
Mithun K. Chittilappilly
You want to take this?
Ramachandran V
Yeah, no, I think that is, you know, there is activity happening. I mean there are, there are continuously people entering the category and exiting the category. So that action is happening. But you know, this is a complex category in terms of GTN because you know, the, the revenue is coming through multiple pipes. Right. So, so I think it’s, I mean there are people who have, you know, taken the route of, you know, trying to build and establish through brand shops. But you know, there are. So these, you know, these things are going on, but you Know mostly people struggle beyond a point in scaling.
Natasha Jain
Thank you so much sir and all the best.
operator
Thank you. The next follow up question is from Rahul Agarwal from Ikegai Asset. Please go ahead.
Rahul Agarwal
Yeah, hi. Thank you for the follow up. Just one question. Let’s say a bit longer term, five years from now, growing at 15% the company should somewhere target 9,000 to 10,000 crore sales at that level. You know just in terms of category what we have, right which are the categories which can be you know, thousand crores kind of sales benchmark with you know, double digit margins. And in terms of your market share in those categories would you visualize that you will be in top three? If you could just you know talk about what categories have that kind of potential.
This is excluding wire and where you think you can actually claim market leadership. Something like what you have been for stabilizers. Can you create something into other categories? Just a longer term thought. Thanks.
Mithun K. Chittilappilly
So there are a lot of categories that are more than 500, 600 odd crores for us. There is a stabilizer segment, fans, inverters and batteries and solar rooftop on its own. So these are all these four categories are very much. And kitchen appliances is almost 500 crores if you put VGuard plus Sunflame. So we have at least six categories that can do more than thousand crores and many of them are in fairly good EBITDA margin profile already. And many of them we are working on them. So there are at least six categories that can potentially be more than thousand crores, you know, to contribute to that total you mentioned.
Rahul Agarwal
Would that, would that mean in terms of market share can we claim, you know, top three positions? Is that something a priority in the company? How do you think about that?
Mithun K. Chittilappilly
So I think we don’t chase volumes, we chase, you know, we are more chasing profitability. So if you look at the fan segment, we don’t play in the mass segment, the economy segment. And that segment is a segment that’s going to get hit the hardest when inflation like this happen. So I think our focus is on building profitable business rather than claiming a certain market share position. But in some segments we will be in the top three. For example, we would like to be the top three in the decorative and BLDC fan segment, for example, like to be top three in the premium, you know, TPW fan segment.
So we may not figure in the overall scheme of things but I think in some segments we would like to be in the top three. Yes.
Rahul Agarwal
Got it. Sorry, that helps. Thank you so much and wish you all the luck for the rest of the year.
Mithun K. Chittilappilly
Thank you.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Mithun K. Chittilappilly
Thank you all for taking time to join our earnings call. Once again, I would like to thank Anuruddha Joshi and the team at ICICI securities for hosting this call. We look forward to interacting with all of you in the next quarter. Thank you.
operator
On behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Mithun K. Chittilappilly
Thank you.