IFB Industries Ltd Management Discussions

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

In an era marked by escalating global trade tensions and persistent geopolitical uncertainties, the Indian economy has demonstrated remarkable resilience and robust growth. While global economic uncertainties persist, Indias economy shows strong growth, supported by robust consumption and government spending. Inflation has moderated and RBIs proactive policy measures have helped stabilise market liquidity. However, foreign portfolio outflows and currency depreciation remain key risks. Overall, Indias economy is well-positioned for growth, but uncertainties in global market, financial volatility and trade disruptions remain key risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum. Indian economy continues to be ring-fenced by encompassing monetary, financial and political stability; policy consistency and certainty; congenial business environment; and strong macroeconomic fundamentals along with a policy ecosystem that is transparent, rule-based and forward looking. Going forward, notwithstanding the daunting challenges in the horizon, India stands well positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth. Inflation pressure has also eased significantly and is poised for a durable alignment with the target in 2025-26.

However, the bad start to the new financial year seems to have partially driven by the unprecedented economic uncertainty caused by US "tariff tantrums". And while the reciprocal tariffs were put on hold on April 9, core sector growth- and industrial growth in general- still faces headwinds. The US on April 2 imposed an additional 26 percent reciprocal tariff on Indian goods but suspended it for 90 days till July 9. However, the 10 percent baseline tariff imposed by USA remains in place. However, Moodys report suggests that India is well-positioned to withstand the negative effects of U.S. tariffs and global trade disruptions, as strong domestic growth drivers and a low dependence on exports help anchor the economy. In a note on India, the agency said government initiatives to boost private consumption, expand manufacturing capacity and increase infrastructure spending will help to offset the weakening outlook for global demand.

Indias auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for 2.3% of Indias GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7 % of Indias GDP. Indias auto component industrys market share has significantly expanded, led by increasing demand for automobiles by growing middle class and exports globally. Due to the remarkable growth in demand for Indian auto components, several Indian and International players have entered the industry. Indias auto component industry is broadly classified into organised and unorganised sectors. While the unorganised sector consists of low-value items and mostly serves the aftermarket category, the organised sector serves OEMs and includes high-value precision parts. Hence, the Indian automobile industry has a considerable impact on the auto component industry. In 2024, India produced 100,000 electric cars and 900,000 electric two-wheelers. However, Internal Combustion Engine (ICE) vehicles still dominate with 20 million two-wheelers and 5 million cars produced. The Government has reaffirmed its commitment towards EVs and its mission for 30% electric mobility by 2030. Budget announced customs duty exemption on the import of capital goods and machinery required for the manufacture of lithium-ion batteries that typically power EVs. The Bharat New Car Assessment Program (BNCAP) will not only strengthen the value chain of the auto component sector, but it will also drive the manufacturing of cutting- edge components, encourage innovation and foster global excellence.

The Indian auto component industry is projected to see 8-10% revenue growth in 2025-26 as per ICRA. ICRA estimates that auto component industry to incur a capex of 25,000-30,000 cr in 2025-26 towards capacity expansion, localization or capability development and technological development (including EVs) among others. At present only 35-40% of EV supply chain is localised. There has been substantial localisation in traction motors, control unit and battery management system over the years, while battery cells which constitute 35-40% of the vehicle cost are still entirely imported. The relatively low localisation level

give rise to manufacturing opportunities for domestic auto component suppliers. Demand from domestic OEM which constitute over half of the industry revenue, is estimated to grow by 8-10% in 2025-26. Part of the growth would stem from premiumisation of components and higher value addition. Growth in replacement demand is pegged at 7-9% in 2025-26. ICRA sees opportunities for Indian players in metal casting and forgings because of closure of plants in European union due to viability issue.

Engineering Division

The domestic automotive industry has seen a healthy revival in FY 2025, aided by a recovery in economic activities and increased mobility. The demand sentiments for a majority of the automotive segments remained healthy.

During the year 2024-25, two-wheelers posted the strongest growth among all categories, rising by 11.1 percent year-on- year, driven by a 9.1 percent increase in domestic demand and a robust 21.4 percent surge in exports. Passenger vehicles recorded 3.7 percent growth, underpinned by strong SUV traction domestically and a healthy 14.6 percent rise in exports. Commercial vehicles remained largely flat (+0.3 percent), as a 23 percent jump in exports offset a 1.2 percent dip in domestic volumes. Tractors saw a slight 1.0 percent decline, primarily due to softer rural demand.

All segments of the industry are expected to continue with the growth momentum in FY 2025-26, building on the robust performance of recent years due to stable macroeconomic conditions, proactive government policies, and Infrastructure spending by the Government. Export demand in key markets of interest, such as Africa and neighbouring countries, is likely to continue as Made in India vehicles are gaining traction. Overall, the Automobile Industry will closely monitor macroeconomic factors and global geopolitics, which will determine the key demand conditions, and supply chain dynamics going forward.

During FY 2024-25, Indias auto-components industry reaffirmed its strategic importance, contributing

approximately 2.3 percent of GDP and directly employing over 1.5 million people. The organised segment is comprised of ACMA-member suppliers serving OEMs with high-precision parts—captured the bulk of growth, while the unorganised sector continued to supply low- value aftermarket components. Supported by government initiatives such as the Production Linked Incentive (PLI) schemes for automotive components ( 25,938 crore) and advanced-chemistry batteries, industry turnover surpassed

6.5 lakh crore (*US$ 78 billion) in FY 2024-25.

Within the Engineering Division, stable raw-material prices and improved semiconductor availability underpinned higher plant utilization and more predictable production cycles. Strategic focus was sharpened on order booking for EV Neutral and EV Positive segments, electric industry. Further integration of stamping with fine-blanking optimised throughput and customer reach.

Opportunities & Threats

Electrification of Indias vehicles—which saw EVs account for roughly 7 percent of component consumption in FY 2024-25 - presents both opportunity and risks. Rising demand for battery packs, electric motors, and power- electronics is balanced by sustained requirements for EV- neutral components (chassis, brakes, fasteners), cushioning the Engineering Division against abrupt ICE-component downturns.

Government programmes such as the Auto PLI scheme, FAME subsidies, and customs exemptions on battery inputs bolster localisation and technology upgrades across the supply chain. Nevertheless, global freight disruptions, commodity price volatility, and intensifying competition from Chinese, other Asian countries and European suppliers continue to pressure margins. In addition, evolving emission standards and localisation mandates may necessitate unplanned capital expenditure and design revisions.

Financial Performance & Operations

The Engineering Division delivered revenue of 835.15 crore in FY 2024-25, a 7.1 percent increase over 779.54 crore in FY 2023-24. PBDIT rose from 117.68 crore (14.8 percent margin) to 135.40 crore (15.9 percent margin), a 15 percent uplift that reflects effective cost management, working- capital efficiencies, and a favourable product mix.

An ongoing initiative of increasing efficiency of capital employed in the Engineering business also yielded results with the ROCE consistently increasing.

Business Development

Order bookings totalled 134 crore in FY 2024-25, with 66 crore in EV-negative (ICE) parts, 50 crore in EV-neutral modules (37 percent of total), and 19 crore in EV-positive components (14 percent), reflecting a 51 percent mix of EV-neutral and EV-positive bookings to de-risk against accelerating EV penetration.

The Engineering Division entered high-value product such as disc brakes for motorcycles and switch-gear assemblies

for the electrical sector. The division added marquee customers OLA Electric, ABB, Modine Thermal Systems, and Jindal Defence Systems, thereby diversifying its order book and mitigating EV-transition risk.

Strategic Initiatives & Outlook

The Engineering Division is targeting revenue growth of more than 20% for the FY 2025-26 and will continue to deepen penetration in EV and non-auto sectors (electric, rail, defence, electronic components) and strengthen its aftermarket division.

The division has planned to invest in brownfield projects to increase its capacity for fine blanking and stamping business to accommodate both organic growth and new businesses. The division is also evaluating to setup a greenfield project for stamping business to cater to the requirements of OEMs in North India.

The Division is also evaluating to setup its own chain manufacturing unit in response to tightening import regulations by Indian Government. This initiative will not only secure current operations but also position the company to supply complete kits to OEMs for new vehicle fitment and spare parts. The market potential is significant, and the company is optimistic about future growth.

With the global realignment of electronics manufacturing towards India, IFB has ventured into this high-growth sector by establishing a new vertical—Advanced Electronics Division (AED). Hence, a dedicated plant is being set up in Bangalore, to meet the requirements of a strategic customer.

The Company is actively seeking and evaluating various M&A opportunities for the quantum growth with a focus on finding a suitable target for takeover. Overall, we have seen forty-nine proposals with sales varying between 150 to 800 crore. In this context, the company was close to concluding one acquisition of North India based stamping unit with an annual turnover of 300 cr approximately. However, this did not work out at the last moment as the foreign company wanted to re-enter the business after 3 years, which was not acceptable. Currently three proposals are under active consideration of the Company.

Risks & Concerns

Key challenges include sustained pricing pressure from global and domestic competitors, raw-material and semiconductor cost volatility, and potential capital demands arising from tightening emission and localisation regulations.

Inaccurate demand forecasts may lead to inventory imbalances, while geopolitical disruptions and logistics bottlenecks could threaten supply-chain continuity. Additionally, retention of skilled talent in precision manufacturing remains critical to maintaining operational excellence and driving innovation in 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. The growing importance of home appliances is encouraging the demand for unique and premium consumer electronics. Premium appliances are equipped with smart features that matches the requirements of modern households. With the increasing number of high-net-worth individuals, the demand for home appliances is growing in the developing economics and fuelling the market growth. To provide increased convenience, manufacturers are integrating smart features that will influence the consumers to take buying decisions. These smart products reduce manual labour and can be controlled and operated through smartphones. Smart devices are being integrated with the IoT technology that integrates digital and wireless technology and will enable consumers to connect their household appliances using their smartphones and the internet and conveniently operate, monitor them from any location.

The financial year 2024-25 was transformative for the industry, in which it bounced back 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. The Growth was particularly evident in categories like Air Conditioners and Refrigerators, primarily due to extreme climatic conditions. Given that severe weather conditions made cooling products necessary, the share of wallet theory is one plausible explanation for muted growth in other consumer durable products. 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. Besides, factors such as a growing economy, urbanisation, real estate

IFB INDUSTRIES LTD.

growth and increasing penetration in smaller markets like tier-III cities and further, will also help the industry growth.

In todays new normal age, this industry is expected to grow due to increase 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.

The announced Production Linked Incentive (PLI) scheme for white goods, with an assured investment of 4,614 crore, is an excellent opportunity for manufacturers to ramp up their production, reduce import dependency and make products more affordable.

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 growth of 16.52% in revenue terms and PBDIT margins enhanced by 23.19% as compared to 2023-24. The margins remained lower on account of missing the targeted number in volume sales, increase in material cost, increase in operating & Admin cost. Supply chain pressure on commodity pricing for a large part of the year were a contributor to the lower margin structure. During the year, the Indian rupee remained under pressure. The Company has appointed M/s Alvarez Marshal, consulting firm for cost reduction program, with an expected saving of more than 200 Crores over 18 months period.

Our focus for last couple of years remains on the key agenda of localisation for some of high-cost imports. This is a key de-risking mechanism against future currency depreciation impacts on our business. Our focus on localising manufacturing within India has resulted in a new generation of electronic controllers models being manufactured in India. The work has resulted in a significant portion of electronic controller imports being substituted by localised production. The expected customer demand, combined with the launch of new models and plans to reduce material costs, provide a moderate outlook for the division.

The Appliance Division continues to deliver a well- positioned and 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, a range of service products etc. In the Washer category, the Company has a complete product pipeline with unique feature-led Front and Top Load models across the entire product lineup.

The Front Load models with Steam features across the entire range 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 which was acquired business from Ramsons, the Division also 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 and will aid the overall sales pipeline.

We are aware that revenue and margins have not been good over the last two fiscal years. This is mainly on account of not extracting revenues in line with our network and product basket. We have restructured sales geographies and sales manning to deliver the results needed. Our task is to significantly grow FL, TL, AC and Refrigerator sales specifically and also, continue to grow in products like MWOs, DWs and CDs. In Kitchen Appliances, our target is to have substantial growth in sales per month and we are driving placements in the distribution network.

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 9 crores, out of which 6 crores earned during financial year 2024-25.

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 M-SIPS, 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 made in a project within a period of 10 years from the date of approval. The company is availing incentive under MSIPS for its washer plant in Goa and has so far received 23.33 crores.

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

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 sales trend of higher capacity product continues and the increased awareness about features like steam in washers and the introduction of the Washer Dryer Refreshers has helped to improve demand in the market. The Company has taken following steps to enhance market share:

A new range of Washers with inverter Technology/ Wi-Fi development was completed and successfully launched in phases from Q2 FY 25. This will be a platform for growth in FY 26.

Focus to increase the market share is a key sales agenda. This relates to product availability and placements which are being driven through channel expansion, adequate manning and a drive on extraction from the distribution network. We have introduced Front Load Washing Machines in the 9 & 10 Kg segments, will be entering in 11kg segment before end Q2 FY 26. This range is at an overall volume of -120 K nos. pa across India at present. We aim to take a market share

of 30% plus in this segment. Our focus is specifically on more extraction from existing counters. Also, an increase in revenues from stores which form a part of the Large Key Accounts.

Washer Dryer Refreshers

The market for Washer Dryer is growing notably in India, consumers are moving towards 2 in 1 solution for wash & dry. In order to capitalize the growing market needs we have expanded our portfolio in washer dryer by introducing 3 in 1 Washer/Dryer/Refresher having capacity of 9/6/3Kg with minimalist looks in April, 2025. This product is a unique global platform and Indias first 3-in-1 product offering which has washing, drying and refreshing, all in one.

This new range brings in advanced laundry care at a more compelling price point by making the category more approachable for every households, we aim to strengthen our position in this segment and drive deeper penetration across key markets. Our plan is to introduce larger capacity of 11.0 / 7.0 / 3.0 kg, with Auto dosage of detergent and enhanced aesthetics. We expect to roll out the new range of models during FY 2025-26.

Top Load Washing Machines

Our models with built-in heaters and steam enabled washing programs continue to do well in the market. There is an increasing demand for models of higher capacities, which has been a consistent trend in the last two years. We have also upgraded and introduced a new range of washers with Inverter technology/ Wi-Fi in phased manner starting from Q1 of FY25-26. Responding to strong market demand, this launch reinforces our position as a brand that leads with innovation and value, offering smarter, quieter, and more efficient washing for everyday households. With this move, we continue to elevate our brands proposition against the competition.

Clothes Dryers

Clothes Dryers 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 continue to be the market leader in this product category and in line with our sustainability and technology commitments to our customers.

We have customized this category by introducing colour

themes in Red, Yellow and Mocha in addition to regular colours, 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 Driers, Flat Work Ironers, Folders, Body Presses, Dry cleaning Machine other accessories etc.

We are discussing with a company from Netherlands for high-capacity Flat work ironers for expanding reach in Railway laundry segment. We have also launched Bottle washers in Industrial dishwashing segment and in Q2 FY 2526 we will launch thermo-labelling compliant Dishwashers in all ranges which is mandatory for premium hotels.

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

In product Road Map (PRM), we have started new projects such as a platform of washer Extractors in 30 kg variant. Later, this would be scaled up to other variants as well as Tumble Dryers and Flat work ironers as horizontal deployment..

Microwave Ovens

The Company maintained its position as one of the top three players of this category and holding on to the 2nd spot in the Indian market. IFB excels in the high-end microwave market which contributes to 60% of the total market share. We have bridged the required model gaps in the Solo category at the right time, which grew in FY 24 and contributes to almost 40% of the total market share. The introduction of the 24 Litre Solo model, variants for Offline and Online, which were exclusive in this capacity platform - enabled the increase in volumes and market share in Q4 FY24-25.

Based on study about market trends, we have witnessed a shift in the consumers preference who are looking for the Air Fryers. We have developed and introduced the "Air Fryer" feature in our present convection models, whose capacities start from 23 ltr and above.

In Q4 of FY 24~25, we have launched higher capacity models in the 30 ltr, 34 ltr & 36 ltr. These models are equipped with motorised rotisserie functions, new auto cook menus and accessories which enables ease and flexible cooking options. The main strategy is to enable the right model placement in key channels, like e-commerce and LFR stores, which contribute to almost 50% of the total business. Work has

been initiated for ongoing upgradation in design, aesthetics and capacity requirements as seen in market trends globally.

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

There is a dedicated and immediate focus 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 CSRs at all IFB Points & identification of key kitchen appliance selling counters are done in this quarter.

The model planogram for FY 2025~26 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.

Our objective is to deliver the monthly sales of 5 Crores per month.

As on date we have not done well and not achieved the target - as more focus is required from the respective branches operating in high potential markets like Delhi, Bangalore, TN, etc.

Dishwashers

In FY 2024~25, Domestic dishwasher (DW) market has touched an approx. volume of 1.5~1.6 lacs units, with three of the top brands occupying 80% of the total market. The Company maintained its position as one of the top three players of this category.

DW market recorded an approx. growth of 30~35 % over last year & comparatively we have experienced a better growth.

The 16 & 14 place setting capacity models contribute towards almost 70% of the total business, as we are the only brand having models in capacities of 14, 15 & 16. Our goal is to reach 5000+ monthly sales and stabilize volumes at that level to target higher goals.

Given the changing market trends and consumer preferences for higher capacities and advanced technology features, we are developing premium end models with BLDC technology, AI featured, triple wash mechanisms, exclusive ioniser feature for removal of bad odours, etc.

Cooling category Air conditioner

Our range for this season has been rolled out it will differentiate and position the product for the season ahead. Our line up covers both Cold and Hot & Cold models. Our

present energy norms are valid upto 31st December 2025. With effect from 1st Jan 2026 the energy levels will be upgraded by upto 13% which means the Air conditioners will be more efficient to consumers.

All our models are equipped to work seamlessly even at high ambient temperatures of 58-degree Celsius and our refrigerant is Eco friendly. Our full range is smart ready and these ACs have been well accepted in the market. 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 to introduce this technology in India. IFB advanced Air conditioners are Voice Control enabled, listens directly to your voice, even without an internet connection. Simply say commands like "Hello IFB, turn on the AC," and it instantly adjusts to your preferences.

The quality and performance levels of the product range have been acknowledged to be among the best-in-class. The new line up has given options for differentiated placements in the channels such as distribution, key accounts and also smaller multi-brand/ SSD channels. SSD Channel is gradually gaining traction.

The losses in this segment have been significant during FY 2021-22 to FY 2023-24. The AC business reported a profit at PBDIT level for the first time in the year 2024-25. We will deliver the material cost reduction through the work being done in areas like PCBs, Compressor selection etc. A specific geography by geography, dealer by dealer plan, including key accounts where ACs were absent earlier, has been put in place for marketing and positioning our ACs in this key channel segment. The aim is to grow our brand sales to a target level of 500K per annum. OEM sales will be over and above this. The Company aims to increase numeric reach and display of ACs for better visibility at counters. One of the key focus areas for the AC segment is to grow the sales in the institutional / SSD verticals and we are putting a focused effort in building the team.

One of the key strengths for the Appliances Division is the service function and its reach to the customers. We have a total of 1400 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 9 million plus customer base has a high potential for the company to generate revenues through the sale of additives and accessories. The companys own call centre in Goa, Delhi and Bangalore which we call "service centre" continues to be effective in issue resolution and customer feed-back/cross selling initiatives with a total manning of 250 people as on date. 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 program, 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.

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.

Amongst the major issues, Appliance Division is addressing are:

1. Competition:

Continued attempts to "buy" market share by undercutting 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.

Our company continues, to be focused on differentiating itself by introducing value led product range. Local challenges are addressed as applicable and needed. Your 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 compressors, copper tubes, electronic parts, and inverter drives— 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.

Motor Division

The Motor Division acquired Automotive Motor Division from IFB Automotive Pvt. Ltd and merged it with existing business, keeping in mind the operational synergy between the two divisions. However, the divisions revenue did not grow as anticipated due to the delay in implementation of new project etc.

The Division is actively engaging with various companies for the supply of BLDC motors for use in washing machine, air conditioner, air coolers, chimney, etc. We are also involved in development activities for RFQs received in the automotive motor sector.

Revenue from operations for the year was 101.90 cr which is a decrease of 18% from last year, primarily due to our customers transitioning from universal motors to BLDC motors. We were unable to meet our internal launch targets due to the unavailability of motor drive software for field trials. The division has incurred losses of 5.75 crores at the PBDIT level for FY 2024-25, compared to a loss of 0.61 crores in the previous year.

The financial year 2025-26 is critical for our growth, since we have commenced the Commercial production of washing machine motors in Q4FY25 and it is progressing well. We expect to start the Commercial production of Air Conditioner motors by Q2 FY26.

To enhance profitability, we have initiated several measures to reduce input costs by 6%, including value analysis/value engineering (VA/VE), exploring alternative suppliers, and minimizing rejection rates during production. Additionally, we are in the final stages of developing BLDC motors for the automotive industry, targeting applications such as engine cooling, battery cooling, and seat ventilation, with plans for introduction in FY27.

While our motor-related investments have not yet yielded

the anticipated results, we remain optimistic about the future.

Product Development: We have started commercial production of BLDC motors for washing machines in this financial year. Trial Production of AC motors began in March, 2025, and we are addressing initial challenges to ensure mass production by end of Q2FY26.

We are not just manufacturing motors; we are providing comprehensive solutions. By leveraging our strengths in motors, power electronics, and software, we are well- positioned to serve our current customers and explore new markets. This integrated capability provides us with a competitive edge and opens doors to exciting opportunities across various industries.

Our transition to BLDC motors and our end-to-end solution model represents significant advancements—not only for our business but also for energy savings and sustainability. We believe this strategic direction will enable us to grow faster, seize new opportunities, and contribute to a greener future.

Steel Division

The Steel division supplies materials mainly to the Fine Blanking division and has been very helpful 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.

Steel Division achieved a revenue of 185.14 Crs. and earned a profit of 9.15 Crs. at PBDIT level during the year under review. 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 Associates, Chartered Accountants to ensure compliance and effectiveness of the Internal Control Systems.

The Audit Committee regularly reviews the Internal Audit Reports for the auditing carried out in all the key areas of the 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:

Sl. Particulars No.	Standalone	Consolidated
	2024-25	2023-24	2024-25	2023-24
1 Revenue from operations	4,942.28	4311.68	5,091.71	4437.84
2 other income	34.91	32.31	35.18	32.37
3 Sub-total	4,977.19	4343.99	5,126.89	4470.21
4 Total Expenditure (Before interest and depreciation)	4,652.58	4103.77	4,789.31	4220.77
5 PBDIT	324.61	240.22	319.29	225.28
6 PBDIT%	6.52%	5.53%	6.23%	5.04%
7 Profit After Tax	128.79	68.88	118.91	50.36

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 2025 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 forwardlooking statements.