IFB Industries Ltd Management Discussions

a) Structure and Developments, Opportunities and Threats, Performance, Outlook, Risks and Concerns:

Over the current decade, the Indian economy has navigated a succession of domestic and global headwinds, with the unfolding geopolitical crisis in West Asia emerging as the latest challenge. Unlike the COVID-19 pandemic-which triggered simultaneous, prolonged disruptions to both demand and supply-the West Asia crisis functions primarily as a supply-side shock. While domestic demand has remained resilient thus far, the conflict has intensified inflationary pressures by driving up energy prices and global input costs. A protracted supply disruption of this nature risks compressing corporate margins and elevating retail inflation; over time, this could erode disposable incomes, dampen consumer confidence, and stall private investment, potentially transforming a supply shock into a demand slowdown and raising the risk of stagflation. Indias full-year GDP growth for FY26 closed at an estimated 7.5%, according to ICRA, slightly below the National Statistical Offices estimate of 7.6%. Growth slowed to a three-quarter low of 7.0% in Q4 FY26 due to manufacturing compression and rising raw material costs.

In response to oil market shocks and a volatile rupee, ICRA has pared its baseline FY27 GDP growth forecast to 6.2% (down from 6.5%). Moodys Ratings similarly cut Indias calendar year 2026 growth forecast to 6.0% (from 6.8%), citing prolonged energy flow constraints through the Strait of Hormuz. Crisil and India Ratings have aligned their FY27 forecasts to 6.6% and 6.7%, respectively.

The Reserve Bank of India (RBI) has maintained a "neutral" policy stance since mid-2025. This framework gives the Monetary Policy Committee structural flexibility to "look through" supply-side energy shocks while keeping interest rates stable to protect market liquidity.

The economic landscape has shifted from the initial, short-lived "tariff tantrums" and temporary reciprocal freezes. Following US legal adjustments that rolled back broad emergency tariffs, the Office of the US Trade Representative (USTR) fundamentally altered its approach by launching a formal Section 301 investigation targeting Indias core manufacturing sectors over allegations of structural excess capacity. This move has delayed bilateral trade agreement timelines and introduced sustained industrial headwinds through heightened origin-of- material tracking, supply chain compliance audits, and rising documentation overhead for exporters. Nevertheless, Moodys maintains that Indias core economic foundation remains structurally sound; robust government infrastructure spending, targeted policy initiatives to expand manufacturing capacity, and resilient domestic private consumption continue to act as critical shock absorbers, preventing sharper deceleration and keeping the long-term domestic demand story intact.

Indias automobile sector is expected to experience a moderation in growth during FY2027, following a period of expansion in FY2026 driven by GST rationalisation and resilient economic activity. Policy changes improved affordability in the twowheeler segment and enhanced fleet economics for commercial vehicles, but growth rates are projected to normalise against a

higher base. The CV segment led the recent industrial upcycle, supported by infrastructure activity and GST rate cuts. Domestic CV wholesale volumes increased by 11.9% YoY during the first 11 months of FY2026, while retail volumes rose by 28.9% in February 2026. During FY2027, the growth is projected to moderate to 4-6% with constraints being high funding costs and consumer preference for pre-owned light commercial vehicles (LCVs) may limit near-term expansion.

The two-wheeler segment recorded a recovery in FY2026, with retail volumes growing by 13% YoY in April 2026, supported by improved vehicle affordability, lower-than-expected price hikes, and sustained rural cash flows amid strong crop harvests. The auto component sector is forecast to grow by 7-9% in FY2027, driven by premiumisation and replacement demand. The industry plans capital expenditure of INR 280-320 billion for the year, focusing on capacity expansion and electrification. While internal accruals will fund most investments, debt reliance may increase for battery cell localisation projects. ICRA noted that while direct export exposure to West Asia is limited for component players, indirect risks exist. Approximately 2530% of Indias passenger vehicle exports are linked to West Asian markets, and disruptions there could affect component demand. Other factors to watch include supply-chain volatility, energy costs, and currency fluctuations.

The broad-based recovery seen in FY2026 has largely been policy- driven, particularly due to GST rationalisation, which improved affordability and demand sentiment across segments. Growth is expected to normalise in FY2027, given the higher base and emerging challenges from global uncertainties and input cost pressures. That said, continued investments in electrification, steady replacement demand, and improving rural incomes are expected to support the sector over the medium term.

AUTOMOTIVE INDUSTRY

The domestic automotive industry scripted a landmark year in FY 2025-26, with every major vehicle category recording its highest-ever annual sales in a single financial year; for the first time in seven years. The industry, which had started the year on a modest note with a slight de-growth in the first half of the FY, staged a powerful comeback in the second half which was powered by structural policy reforms including GST 2.0 rationalisation, multiple RBI repo rate cuts, and improved income-tax slabs that boosted consumer affordability and sentiment.

During FY 2025-26, Two-wheelers posted the strongest absolute performance, recording 10.7 percent growth year-on-year to 2.17 crore units; their highest-ever annual volume. This was driven by strong scooter demand (up 18.5 percent) and a record 23.4 percent surge in exports to 51.8 lakh units. Passenger Vehicles recorded 7.9 percent growth to 46.43 lakh units, underpinned by strong SUV traction and a healthy 17.5 percent rise in exports to 9.05 lakh units. Commercial Vehicles posted their best- ever annual sales of 10.80 lakh units, up 12.6 percent, as both domestic fleet demand (supported by capex and lower financing costs) and exports (up 17.4 percent). Three-wheelers also achieved record sales of 8.36 lakh units, growing 12.8 percent,

with exports surging 50.1 percent to 4.61 lakh units on strong demand from Sri Lanka and African markets.

Tractors delivered an exceptional year, surpassing the historic 10-lakh unit milestone for the first time, with retail sales of approximately 10.5 lakh units, representing approximately 19 percent growth over FY 2024-25. This was driven by abovenormal monsoon rainfall, improved farm incomes supported by higher MSPs (Minimum Support Price), and pre-buying ahead of TREM V (Tractor emission norms).

All segments of the industry are expected to continue the growth momentum into FY 2026-27, building on the strongest industry performance in seven years. Export demand in key markets such as Africa and neighbouring countries is likely to continue as Made in India vehicles gain global acceptance. However, the industry will closely monitor geopolitical developments, particularly the West Asia conflict. This conflict could impact commodity prices, freight rates, fuel prices, and supply-chain continuity.

During FY 2025-26, Indias auto-components industry reaffirmed its strategic importance, contributing approximately 2.3 percent of GDP and directly employing over 1.5 million people. Industry turnover is estimated to have surpassed 7.4 lakh crore (?US$ 88 billion) in FY 2025-26, supported by record vehicle sales across all segments and strong aftermarket growth, building on the 6.73 lakh crore (USD 80.2 billion) clocked in FY 2024-25.

Within the Engineering Division, raw material conditions presented a mixed picture during FY 2025-26. Steel prices remained broadly benign through much of the year, aided by a surge in low-cost global imports, though the Governments imposition of a 12% safeguard duty on flat steel products from April 2025 introduced upward cost pressure in the second half. Aluminium and copper rallied sharply toward year-end, introducing fresh margin pressure. Semiconductor availability was no longer a material constraint for conventional component production, though EV-specific chips remained tight globally. The West Asia conflict introduced uncertainty around freight rates and fuel costs, particularly for components sourced through Red Sea shipping corridors. The strong growth momentum across the automotive industry drove higher plant utilisation and more predictable production cycles.

Opportunities & Threats

Electrification of Indias vehicles continues to gain momentum - electric two-wheelers reached a penetration of 6.5% of the two-wheeler market in FY 2025-26, while electric passenger vehicles grew 84% year-on-year to nearly 2 lakh units, reaching approximately 4.3% of the passenger vehicle segment. The transition also opens significant localisation opportunities, particularly in the EV supply ecosystem where a large share of critical components - including power electronics, battery enclosures, and drivetrain parts - continue to be imported. Rising demand for battery packs, electric motors, and power electronics is balanced by sustained requirements for EV-neutral components (seating, chassis, brakes, fasteners), cushioning the Engineering Division against abrupt ICE-component downturns.

Beyond automotive electrification, the global realignment of supply chains away from China presents a structural opportunity for precision engineering manufacturers in India. Major global corporations across electronics, industrial, and consumer goods sectors are actively diversifying manufacturing to India, creating new demand for high-precision stamped and fine- blanked components. Indias electronics manufacturing exports are projected to reach 4-4.4 lakh crore in FY 2025-26, opening avenues for component suppliers with the requisite quality and scale. Simultaneously, Indias defence sector continues its strong growth trajectory - with the defence budget crossing 6.8 lakh crore in FY 2025-26 and private sector participation at an eight- year high - presenting meaningful opportunities for precision component manufacturers to enter defence supply chains as Tier 1 and Tier 2 suppliers.

Government programmes such as the Auto PLI scheme, FAME subsidies, and customs exemptions on battery inputs continue to bolster localisation and technology upgrades across the supply chain. Nevertheless, global freight disruptions driven by the West Asia conflict, steel price volatility following the Governments imposition of a 12% safeguard duty on flat steel imports from April 2025, and intensifying competition from Chinese, other Asian, and European suppliers continue to pressure margins. Evolving emission standards (TREM V norms from April 2026) and localisation mandates may necessitate unplanned capital expenditure and design revisions.

Engineering Division

Financial Performance & Operations

The Engineering Division delivered revenue of 934.20 crore in FY 2025-26, an 11.86 percent increase over 835.15 crore in FY 2024-25. PBDIT margin declined from 16.21 percent in FY 202425 to 14.84 percent in FY 2025-26, primarily on account of loss of contribution from the revenue falling below targeted levels in Aftermarket business due to import restrictions, additional staff costs following implementation of the new labour code, and start-up expenses incurred towards the Advanced Electronics Division.

Business Development

Order bookings totalled 153 crore in FY 2025-26, with 71 crore in EV-negative (ICE) parts, 75 crore in EV-neutral modules and 7 crore in EV-positive components reflecting ~ 50 percent mix of EV-neutral and EV-positive bookings to de-risk against accelerating EV penetration.

Strategic Initiatives & Outlook

The Engineering Division is targeting double digit revenue growth for FY 2026-27 and will continue to deepen penetration in EV and non-auto sectors and strengthen its aftermarket division.

The Division is executing brownfield investments to increase capacity for fine-blanking and stamping to accommodate organic growth and new business. The Division is also progressing a greenfield stamping facility in Gujarat to cater to OEM requirements in North India. A land measuring about 16.31 acres (66000 sq. mtr.) has been acquired at Sanand- II in FY 2026-27. The Engineering and Marketing teams are actively

engaging with customers to gather RFQs and evaluate key OEM programmes to progress these projects.

The Division has existing after-market business in chain sprocket kit for Motorcycles. In view of recent regulatory changes which is making import of chains difficult, the Division proposes to start in-house chain manufacturing line to de-risk our existing Aftermarket chain sprocket operation. Equipment and its suppliers for the project have been identified and an agreement has been entered to rent a built-up factory shed of 1,60,000 sq ft in Bangalore with operations expected to commence by Q4 FY 2026-27. This manufacturing line will also open opportunities for IFB with the OEMs as a supplier offering both sprocket & chain kits for their new vehicle fitment and also spare parts division requirements. The market size of this opportunity is significant, and the Company is optimistic about its prospects. With the global realignment of electronics manufacturing towards India, the Company commenced operations at the Advanced Electronics Division (AED) with a dedicated plant set up in Bangalore within four months. The Division has commenced production in September 2025 for a strategic customer and is currently serving its first peak season, marking a significant milestone in IFBs expansion beyond traditional automotive components. The Division is steadily ramping up production and is expected to operate at full capacity by H1 FY 2026-27.

The Company continues to actively evaluate M & A opportunities for quantum growth, with several proposals under consideration across varying revenue scales. We have evaluated more than 60 companies for inorganic growth but till now no suitable target company we could acquire.

The Company has set up a tooling Company in Switzerland, through its wholly owned subsidiary GAAL, to augment the design and tooling capabilities of the Engineering Business and R&D work for new tools of Advanced Engineering Division which can possibly lead towards breakthrough product innovation. The Company was incorporated in December 2025 under the name "Schmid Automotive & Appliances GmbH" and Company is doing a feasibility study for improvement of certain tools for Engineering Business. The reason for setting up the Company in Switzerland is that Feintool Technologie AG and Qcision which was hived off from Feintool and subsequently got wound up were both situated in Switzerland. We are of the view that we will get a talent pool there to make complex tool designs & also Switzerland is known for precision in engineering due to its watchmaking industry etc. getting people with precision engineering background will further help us to design complex tools etc.

Risks & Concerns

Key challenges include sustained pricing pressure from global and domestic competitors and potential capital demands arising from tightening localisation regulations. The imposition of safeguard duties on flat steel imports, while intended to protect domestic producers, reduces competitive pricing pressure on Indian steel mills. This creates a risk of domestic steel price increases for downstream component manufacturers who source locally. The ongoing West Asia conflict continues to pose risks around freight rates, fuel costs, and supply-chain

continuity, particularly for components sourced through Red Sea shipping corridors.

Inaccurate demand forecasts may lead to inventory imbalances, while geopolitical disruptions and logistics bottlenecks could further threaten supply-chain continuity. The rapid pace of EV transition, while presenting opportunities, also introduces execution risk around timely capacity additions and technology readiness. Additionally, retention of skilled talent in precision manufacturing remains critical to maintaining operational excellence and driving innovation across the Division.

CONSUMER DURABLE INDUSTRY

The increasing demand for premium appliances is one of the primary factors that will fuel the growth of the home appliances market in India during the next few years. Premium appliances are equipped with smart features that match the requirements of modern households. These smart products reduce manual intervention and can be controlled and operated through smartphones. Smart devices are being integrated with IoT technology, which combines digital and wireless connectivity, enabling consumers to connect their household appliances using their smartphones and the internet and conveniently operate, monitor them from any location.

The financial year 2025-26 was a year of modest growth for the industry, in which it bounced back in H2 FY 2025-26 despite challenges such as rising raw material costs, price hikes and supply chain disruptions and displayed resilience by embracing technology and innovation.

The demand for consumer durables in India continues to grow, driven by rising disposable incomes and rapid technological advancements. According to IBEF, Indias consumer durables and appliances industry is projected to become the fifth-largest globally.

The industry, which contributes 0.6 per cent of GDP, is witnessing a transformative shift towards premiumisation, increasing the average sale price, driven by rising income and young demography with changing preference. Factors such as a growing economy, urbanisation, real estate growth and increasing penetration in smaller markets like tier-II and tier-III cities and further, will also help the industry to grow further.

In todays new normal age, this industry is expected to grow due to increase in digital influence, leading to improved product awareness and a rise in demand from the tier-II and tier-III cities. Products that offer convenience, connectivity, and sustainability are gaining popularity among the burgeoning middle class, driving innovation and competition among manufacturers. With increased consumer awareness about technological advancements and their applications across sectors, artificial intelligence and automation in production will be vital upcoming trends. Industry will also drive investments in R&D, technological infrastructure, and processes to improve production efficiencies.

The Appliance Division has ended the year with a revenue growth of around 10%. During the year, the company has reduced material cost by 67 cr through its cost reduction programme, but this reduction was negated by an increase in commodity prices by 32 cr (Copper, EPS, Polypropylene and

other resins etc.) and the impact of INR depreciation of 52 cr. The Company has appointed M/s Alvarez Marsal for the cost reduction programme. In the current year, we are expecting an additional material cost saving of around 120 cr to 150 cr. This should help us to negate some of the adverse effects of commodity and forex. It seems that the West Asia crisis is mostly getting resolved; this will lead to cooling of the commodity prices and will increase the margins.

Our focus for the last couple of years remains on the key agenda of localisation of some high-cost imports. This is a key de-risking mechanism against future currency depreciation impacts on our business. Our focus on localising manufacturing has resulted in a new generation of electronic controller models being manufactured in India. This has resulted in a significant portion of electronic controller imports being substituted by localised production. We have also localised certain key components of Air Conditioners in H2 of FY 26.

The Appliance Division continues to deliver a differentiated range of products in both domestic and industrial categories. The products include domestic washing machines, industrial washing systems (including dry cleaning and other equipment like ironers etc.), microwave ovens, domestic and industrial dishwashers, clothes dryers, modular kitchens, kitchen appliances (hobs, chimneys and built-in ovens), air conditioners, refrigerators and a range of service products. In the Washer category, the Company has a comprehensive product pipeline with unique feature led Front and Top Load models.

The Front Load models with Steam features and the Top Load models with in-built heaters and steam function have been well received in the market and have helped the Company to gain market share in the relevant segments.

With the introduction of the new range from the Industrial laundry division, the Division now features a complete commercial laundry solution range. The introduction of Washer Extractor and Clothes Dryer models at the 11 Kg Capacity segment- targeted at semi-commercial/ commercial laundry segments have generated a healthy order book for the company. The introduction of the new range of Industrial Washing Machines with the patented Xeros technology which uses significantly less water, detergent and chemicals has also helped to generate customer enquiries.

Government Incentives

The production linked incentive scheme (PLI) scheme for white goods is outlined to build an end-to-end component ecosystem for ACs in order to make India a hub of the global supply chain. The scheme will extend benefits of 4-6 % on incremental sales for five years subsequent to base year. According to market experts, providing incentives for the manufacturing of components is the right move by government given the huge response from Indian firms to manufacture three main air-conditioning components- compressors, copper-tubing and aluminium fins. The PLI scheme has the potential of not only boosting domestic production but also lowering the dependence of imports. The AC units of Home Appliance Division have already initiated the process to avail incentive under PLI scheme and obtained incentive of 16.5 cr, out of which 7.5 cr received during financial year 2025-26.

Modified Special Incentive Package Scheme (MSIPS)

The Government has approved special incentive package to promote large-scale manufacturing in the Electronic system Design and Manufacturing (ESDM) sector. The scheme is called the Modified Special Incentive Package Scheme (MSIPS). Under MSIPS, the Government will provide subsidy of 20% on capital investments in special economic zone (SEZs) and 25% on capital investments in non-SEZs for individual companies. It also provides for reimbursement of CVD/ excise for capital equipment for the non-SEZ units. The incentives are available for investments made in a project within a period of 10 years from the date of approval. The company is availing incentive under MSIPS for its plant in Goa and has so far received 23.72 cr.

The updates on the products and the relative market position of our future plans are given as under:

Washing Category

Front Load washing Machine

This Division has a wide range of products which addresses to a variety of customer needs and is well differentiated in the market based on features, aesthetics and performance. The market is seeing a consumer preference for larger capacity products with significant growths in the 12kg and more segments in the last 2 years. The Company continues to look at opportunities for growing market shares.

A new range of Washers with inverter Technology/ Wi-Fi / AI was launched in phases from Q2 FY 25.

We have introduced Front Load Washing Machines in the 11kg segment in Q2 FY 25-26. This range is equipped with advanced wash care features like AiDOS (Artificial Intelligence Dosing), where the washing machine automatically dispenses the right amount of detergent. IFB plans to further expand the AiDOS platform into other capacities.

The >11Kg front load segment has grown from ~146K units in Q3 FY 26 to ~203K units in Q4 FY 26, with the segment contribution increasing from ~11% to ~14%, highlighting accelerated premiumization trends across the category. IFB intends to launch 13Kg and 14Kg in the current year to address this fast growing segment. These models will have advanced smart features like automatic detergent dosing, etc.

In H1 of FY 27, we shall rationalise our SKU portfolio by over 30%. The initiative is expected to improve the operational efficiency.

Washer Dryer Refreshers

The Washer Dryer category continues to witness premiumization trends with industry volumes growing by ~30% YoY. The premium 10Kg+ segment has grown even stronger by ~48%, reflecting rising consumer preference for larger capacity and convenience-led laundry solutions.

IFB continues to strengthen its premium portfolio through Laundrimagic - Indias first all-in-one Washer, Dryer and Refresher platform. The category is currently being driven through IFBs 9Kg and 11Kg platforms, delivering a seamless wash-to-wear laundry experience and 30% better fabric protection with AiDOS technology.

These products provide Wash-to-dry process with zero manual

intervention, 5 drying modes with improved convenience, enhanced fabric protection through intelligent AiDRY technology, superior wash consistency and 30% detergent saving with AiDOS, Space efficient and premium laundry solution for modern households

Top Load Washing Machines

The Top Load industry continued to witness premiumization with overall category growth of ~8% YoY, led by momentum in higher capacity segments, reflecting rising consumer preference for premium and feature-rich washing solutions.

IFB outperformed industry growth, driven by strong traction across premium capacities. IFBs new Top Load lineup from 9kg to 12Kg is strategically focused on delivering a smarter washing experience through WiFi & connected technologies, energy- efficient performance and enhanced hygiene-led solutions for modern consumers

As part of our operational improvement initiative, we intend to consolidate our SKU range by over 30% during H1 of FY 27, resulting in enhanced efficiency.

IFBs products provide upto 40% energy savings through Eco Inverter technology, 60?C hot wash technology killing 99.99% of germs and allergens, Smart WiFi connectivity enabling seamless control and convenience and superior wash performance with enhanced fabric care and long-lasting durability. With this move, we continue to elevate our brands proposition against the competition.

Clothes Dryer

Clothes Dryer with advanced technologies, such as heat pump systems and smart features, typically come with higher initial costs compared to traditional drying methods and basic models which are more affordable. The trend of increase in affordability can encourage consumers to invest in high-end or technologically advanced dryers.

We have introduced new colours of Red, Yellow and Mocha in addition to the regular colours of white and silver.

Industrial Segments- Laundry and Dishwashing Equipment

Our customers are from verticals like hotels, educational institutions, medical institutions, Defence, pharmaceuticals, railways etc. The IFB equipment / range serves them with better reliability and durability and also addresses all their needs starting from washing to finishing, with the help of equipment like Washer Extractors, Tumble Dryers, Flat Work Ironers, Folders, Body Presses, Dry cleaning Machines other accessories, etc.

We are also exploring dealer / distributor/agents in Sri Lanka, Maldives, CIS, etc to improve exports business.

In the product road map, we have successfully migrated to a new platform of laundry equipment in the 15 kg and 30kg segments. These machines offer better performance with contemporary aesthetics and globally benchmarked technology, which will help us access domestic and international markets.

Production and sales have commenced for new platform machines like Flat Work Ironer 416E and 420E.

Product Development -

We have started developing new platform for 60Kg which is

currently under validation and testing. We are also developing Micro Controller for 11 Kg to 130 Kg Washer Extractors. We are also developing Premium Category Laundry Machines with advance features like Load Cells, Microcontroller, New Look Door etc., to position this product for Premium Hospitality Segment.

Key growth drivers include launderettes and commercial applications such as hotels, hospitals, restaurants, pharma and laundry installations in government institutions.

Microwave Ovens

The microwave oven market has grown by 1% during FY 26. IFB has grown by 7% in FY 26 resulting in a growth in market share. This has strengthened IFBs No. 2 market position.

During Q4 FY26, we had capitalized on the temporary gas shortage by positioning microwave ovens as a reliable alternative for preparing meals from breakfast to dinner. This shift resonated well with consumers, leading to increased microwave usage as households looked to conserve and optimize gas consumption. Building on this momentum, we will continue to position our microwave range as an all-in-one cooking solution.

We will rationalise the models with new launches and exit certain entry level models. We have multiple launches planned, which will further strengthen our premium portfolio and enhance our market positioning.

Built-in Ovens, Built-in Dishwashers, Built-in Microwaves, Chimneys and Hobs

The focus is to ensure that we are in the top ten cities in the country, and the gaps in areas like exclusive manning, right model placements and displays, trained sales promoters at all IFB Points & identification of key kitchen appliance selling counters are done by H1 FY 2026-27.

The model planogram for FY 2026-27 has been completed, with respect to right model features, right pricing, new technologies like Smart auto Clean, BLDC driven models, filter less options, coupled with attractive stainless-steel finishes for the exteriors.

The Kitchen Appliances market has grown by 7% for FY 2025-26 compared to FY 2024-25.

In response to evolving market dynamics, we have benchmarked and aligned our pricing laddering to enhance competitiveness and strengthen our overall value proposition. We have also sustained our focus on growing the kitchen appliances segment, with targeted efforts across the top 10 cities to improve product visibility and drive higher conversions in key markets.

Dishwashers

The Dishwasher market has grown by 12% in FY 2026. IFB has grown by 31% improving market shares and strengthening our No. 2 market position

This performance was driven by enhanced e-commerce presence and sustained momentum across IFB Points, Modern Trade and Direct Multi-Brand Outlet (MBO) channels.

Introducing our new technology platform models - starting with the flagship model Neptune Elite16, powered by ADAPTIVE WASH MODE™ (tough on greasy kadhai & gentle on glassware), MAX REACH NOZZLE™ (cleans deep into bottles), MAGIC TRAY™ (smart extra space) & TURBO ZONE™

(for deep cleaning toughest on stubborn stains), built for Indian kitchens that demand the very best.

Looking ahead, our upcoming launches will focus on reinforcing IFBs premium positioning and pioneering leadership in the dishwasher category

Cooling category Air conditioners

IFB is working towards strengthening its position in the split AC segment. Our current product range is designed to deliver consistent performance even in extreme summer conditions. All IFB ACs work efficiently even at an ambient temperature of 55?C. With effect from 1st Jan 2026 the energy levels were upgraded by up to 13% which means the Air conditioners are more efficient to consumers. Our new energy norms will be valid up to 31st December 2027.

We have launched hybrid range of ACs which gives 30% faster cooling along with voice control ACs in 5-star range. Our line up covers both Cold and Hot & Cold models. The entire IFB AC range can be controlled and monitored from remote areas using Geo sensing Technology which is an industry leading feature / range specification. New technologies like Indias First Hybrid AC - which works like a fixed speed AC initially to give powerful cooling and later works in Inverter mode to save power is a ground breaking technology in the air conditioning space. IFB has been the first in India to introduce this technology. IFB advanced Air conditioners are Voice Control enabled, listens directly to your voice, even without an internet connection. The portfolio uses eco-friendly refrigerants and is fully smart- enabled, aligning with evolving consumer expectations In Q2 FY 27, we will reduce SKUs by more than 30% to improve operational efficiency.

Refrigerators:

The demand for domestic refrigerators in India continues to expand steadily, driven by lifestyle upgrades, broader electrification in semi- urban regions and a rising inclination towards smart and premium range of refrigerators.

The current market outlook remains optimistic, driven by new product launches with advanced cooling, flexible freezer compartments and digital temperature controls.

The focus will continue to improve placement and extraction from the key outlets that have been identified.

Service

One of the key strengths for the Appliances Division is the service function and its reach to the customers. We have about 1512 service franchisees across India. Currently, we have 29 service training centres, which are fully equipped to impart training on all aspects of assembly, dismantling, installation and trouble-shooting of our products.

Sales of additives and accessories continue to contribute significantly, both to the topline and bottom line in the current year. IFBs 10 million plus customer base has a high potential for the company to generate revenues through the sale of additives and accessories. The service centre at Goa and Delhi focuses on out-bound calls to track and improve customer satisfaction

and drive reduction in the number of pending customer issues through focused data tracking. In the Companys customer contact programme, we continue to contact customers directly and then visit them. This is increasing customer satisfaction and is also enabling higher revenues from the customer visits.

Amongst the major issues, Appliance Division is addressing are:

1. Competition

The competition continues to "buy" market share by under-cutting and offering large margins to the channel. This is increasing competitive intensity and requires the company to carefully position its products and manage multiple channels effectively.

The company continues, to be focused on differentiating itself by introducing value led product range. Local challenges are addressed as applicable and needed. The company is confident of its ability to remain a dominant market share player across the categories it is present in and will keep investing in building market networks and product development capability.

2. Import-dependence on Key Technologies and high costs of Indigenisation

Key components used in the manufacture of the division critical products-such as electronic parts, etc-are sourced from overseas suppliers. Any disruption in these supply chains due to geopolitical tensions, the introduction of non-tariff barriers, or a global event restricting imports could significantly affect the Divisions ability to import materials, produce goods, and carry out sales. Additionally, the division relies on both domestic and international suppliers for essential components and finished products. Any disruption in the operations of these suppliers could also adversely impact the Divisions ability to deliver products and equipment without interruption.

3. Currency Risk

The division operations are exposed to risks stemming from fluctuations in exchange rates related to the countries where it sources its components and products.

4. West Asia Crisis

The ongoing geopolitical tensions and conflicts in the Middle East have adversely affected Indias consumer durables industry through volatility in crude oil prices, higher freight and logistics costs, supply chain disruptions, and currency fluctuations. Rising crude oil prices increase the cost of petrochemical-based raw materials such as plastics and packaging, while elevated shipping costs reduce overall supply chain efficiency. In addition, INR depreciation against the US dollar increases the cost of imported components and finished goods, thereby exerting pressure on material costs and margins for consumer durable companies. The Division has shown strength in navigating these uncertainties in Q4 of FY 26 by meticulous planning and adopting de-risking measures. The cost increases have also been negated to some extent by implementation of cost saving initiatives and calibrated

selling price increases but overall increase due to rupee depreciation ate into the margins.

Motor Division

The Division is actively engaging with various companies for the supply of BLDC motors for use in washing machines, air conditioners, chimneys, air coolers, tower fans, industrial fans, railway coach fans etc. Demand in these segments remains strong, while the supply base is still limited, creating a favorable opportunity for us to expand our footprint.

Financial Performance

The Automotive Motor Division has delivered around 20% revenue growth compared to the same period in the previous year. More importantly, profitability has improved from loss of 1.83 cr to a profit of 0.12 cr, reflecting better operating leverage and improved execution discipline.

Strategic Initiatives

We are actively expanding our customer base and broadening our presence across alternate applications to reduce dependence on a limited set of products or customers. Our near-term focus is to sustain a monthly turnover of above 8 cr while steadily building towards a minimum PBDIT margin of 8%.

Cost Optimization

A series of cost-reduction measures have been initiated to improve margins by approximately 8%. These include VA/VE initiatives to simplify design and reduce cost, Alternate supplier development to improve sourcing competitiveness, Reduction in production rejection to improve yield and operational efficiency.

New Product Launch

We have commenced mass production of blower controllers for passenger car climate control applications. This new product is expected to make a meaningful contribution to annual revenue growth and strengthen our automotive portfolio.

Conclusion

Overall, the division is showing clear signs of recovery with improving revenue, better profitability, and a stronger cost structure.

Our focus remains on scaling profitable growth, executing cost optimization, and expanding into new applications to deliver sustained value in FY 2026-27.

Steel Division

The Steel division supplies materials mainly to the Fine Blanking division & other Auto & Non-Auto Industries and has been very helpful for the Group in terms of getting steel at the right quality, price and at the right time. The focus was mainly improvement in value addition by offering better product mix, necessary capex to upgrade and enhance mill capacity and quality, close monitoring of scrap generation, aggressive marketing etc.

Sales volume during the year stood at 25,840 MT, reflecting a growth of 7.5% over the previous years volume of 24,042 MT. Revenue increased by 4.9% from 185.15 cr in the previous year to 194.23 cr during FY 2025-26.

PBDIT for the year stood at 10.76 cr registering a growth of 17.60% over the previous years 9.15 cr driven by a stronger focus on value-added sales, improved operational efficiency, and sustained cost optimization initiatives. However, margins were adversely impacted during March26 due to increase in raw material and consumables costs.

Various cost optimization initiatives undertaken during the year have also started yielding tangible benefits, particularly in reduction of material and processing costs, despite operating at similar capacity level comparable to the previous year.

The new Annealing Furnace has been successfully commissioned, and commercial production commenced from the month of May 2026.

Most of the modernisation work which involves capacity expansion and upgradation of several mechanical/ electrical parts has been completed.

b) Internal Control Systems and their Adequacy:

Management has put in place effective Internal Control Systems to provide reasonable assurance for:

a. Safeguarding Assets and their usage.

b. Maintenance of Proper Accounting Records and

c. Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems are as follows:

(i) Corporate policies for Financial Reporting and Accounting.

(ii) A Management information system, updated from time to time as may be required.

(iii) Annual Budgets and Long-Term Business Plans.

(iv) Internal Audit System.

(v) Periodical review of opportunities and risk factors depending on the Global / Domestic Scenario and to undertake measures as may be necessary.

(vi) Application of Internal Financial Control - The Company has put in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weakness in the design or operations was observed. Moreover, regular review of the processes ensure that such systems are reinforced on an ongoing basis.

Over and above Companys in house Internal Audit team, the Company has appointed E&Y and Maheswari and Associates, Chartered Accountants to ensure compliance and effectiveness of the Internal Control Systems.

The Audit Committee regularly reviews the Internal Audit Reports covering all the key areas of operations. Additionally, the Audit Committee approves all the audit plans and reports for significant issues raised by the Internal and External Auditors. Regular reports on the business development, future plans and projections are given to the Board of Directors. Internal Audit Reports are regularly circulated for perusal of Senior Management for appropriate action as required.

Normal foreseeable risks of the Companys assets are adequately covered by comprehensive insurance.

c) Financial and Operational Performance:

The Highlights of Financial Operational Performance are given below :

	Standalone		Consolidated
NS*. Particulars No.	2025-26	2024-25	2025-26	2024-25
1 Revenue from operations	5,443.25	4,942.28	5,619.48	5,091.71
2 Other income	32.66	34.91	33.11	35.18
3 Sub-total	5,475.91	4,977.19	5,652.59	5,126.89
4 Total Expenditure (Before interest and depreciation)	5,141.84	4,652.58	5,301.36	4,789.31
5 PBDIT	334.07	324.61	351.23	337.58
6 PBDIT%	6.14%	6.57%	6.25%	6.63%
7 Profit After Tax	133.34	128.79	143.56	118.91

d) Human Resources Development and Industrial Relations:

IFB is a knowledge-driven organisation and its greatest asset is the experience and skill of its employees. Recognizing that the workforce will provide a critical competitive edge in its growth endeavour, IFB has laid major emphasis on recruiting, maintaining and developing its human asset base. It offers a wide range of career

development programmes including on the job training and job rotation amongst others. IFBs welfare activities for employees include Medical Care, Group Insurance, NPS etc.

e) Key Financial Ratios:

Key Financial Ratios for the financial year ended 31 March 2026 is appended as Annexure-H, which forms part of this report.

f) Cautionary Statement:

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward-looking statements and progressive within the meaning of applicable laws and regulations. The Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward-looking statements.