Recommendation from Consumer Durables Sector

This column gives you scrip chosen by the research team during the fortnight that is fundamentally strong and expected to give good capital appreciation over a time period of 1 year.[EasyDNNnews:PaidContentStart]

IFB Industries : RIDING THE CONSUMER DURABLES UPSWING

HERE IS WHY
✓ Category Leadership
✓ Diversified Portfolio
✓ Robust Financial Growth

I ndia is currently the fastestgrowing major market for consumer durables globally and is projected to become the fourthlargest by FY27. Demand is being fuelled by higher disposable incomes, rapid technological innovation, and evolving consumer lifestyles. The India Washing Machine Market was valued at USD 2.29 billion in 2023 and is expected to grow at a CAGR of 4.46 per cent, reaching nearly USD 3.1 billion by 2030. Considering this favourable backdrop, we recommend IFB Industries Ltd as our Choice Scrip for this issue.

Incorporated in 1974 as Indian Fine Blanks Limited, IFB Industries is a leading Indian manufacturing company with a diversified presence across Home Appliances and Engineering divisions. The Home Appliances Division, launched in 1990–91, is IFB’s flagship segment and a key revenue driver. The Engineering Division specialises in precisionengineered components for automotive, electrical, and Railway sectors. Its products include fine blanked parts, stamping components, BLDC motors, and assemblies for vehicles and appliances. IFB Industries derives nearly 80 per cent of its revenue from the Home Appliances division, with the balance contributed by the Engineering segment. For Q2FY26, the segmental revenue mix comprised Front Load washing machines (40 per cent), Top Load models (17 per cent), Service income (17 per cent), Air Conditioners (4 per cent), and Microwave Ovens (8 per cent), while the remaining 14 per cent came from commercial products, refrigerators, and dishwashers. Air conditioner sales were lower this quarter due to seasonality; however, they typically contribute around 25 per cent of overall revenue during peak quarters.

In Q2FY26, on a consolidated basis, the company reported revenue of ₹1,370.43 crore, an increase of 12.39 per cent YoY compared to ₹1,219.33 crore in the same quarter last year, and up 2.40 per cent sequentially. PBDIT for the quarter grew by 49 per cent, supported by healthy performance in August and September. Net profit stood at ₹50.79 crore, rising 61.70 per cent YoY from ₹31.41 crore and 94.15 per cent QoQ. As of September 30, 2025, IFB Industries maintained a robust financial position; net cash position stood at ₹290.83 crore, reflecting strong liquidity. IFB has consciously deferred prepayments to preserve cash for potential merger and acquisition (M&A) opportunities currently under evaluation. To enhance profitability, the company has engaged Alvarez & Marsal for an 18-month cost optimisation programme targeting annualised material cost savings exceeding ₹200 crore. IFB has already achieved ₹14 crore in savings during H1FY26 and expects ₹20 crore and ₹40 crore in Q3 and Q4FY26, respectively. In addition, McKinsey & Company has been appointed to drive e-commerce growth and marketing cost efficiency initiatives. E-commerce and quickcommerce platforms are becoming key growth engines, with online contribution rising from 1.9 per cent to 6 per cent YoY. Meanwhile, the Engineering Division is targeting 20 per cent revenue growth in FY26 and plans to secure ₹500 crore in new orders over the next two years, supported by deeper penetration in the EV and non-auto sectors.

Over the past few years, IFB Industries has maintained a negative cash conversion cycle, which currently stands at -1 day, reflecting efficient working capital management and strong inventory turnover. On the valuation front, the company’s shares trade at a P/E of 58.8x, compared to the industry average of 53.9x and a three-year median of 93x. The PEG ratio of 0.96 indicates earnings growth reasonably aligned with valuation. Return ratios remain healthy, with ROCE at 17.4 per cent and ROE at 13.7 per cent. Considering its performance and brand leadership, we recommend a BUY.

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