Financial Performance Highlights

  • Revenue Growth: Achieved approximately 41-42% year-on-year growth for FY26.
  • EBITDA Growth: Increased by about 55% year-on-year, resulting in higher EBITDA margins.
  • PAT Growth: Profit After Tax showed significant improvement.
  • EPS Growth: Earnings per share grew by approximately 85%.
  • Production Volume: Produced 270,000 chimneys in FY26 compared to 195,000 in previous year, representing 38% growth.
  • Capacity Utilization: Reached close to 50% across both plants.

Operational Performance

  • Plant Performance:
  • Hyderabad plant registered 31% growth
  • Panchkula plant registered 42% growth
  • New Products: Developed built-in ovens, wine coolers, and refrigerators at Hyderabad plant

Capacity Expansion

  • CapEx: INR 10 crore expansion at Panchkula plant
  • New Construction: 50,000 square feet planned, with one floor already ready
  • Additional Capacity: 12,000-15,000 chimneys capacity addition
  • Timeline: Operations expected to commence within 2-3 days from call date (June 1, 2026)

Cost Pressures and Mitigation

  • Input Cost Pressure: Due to rupee depreciation, geopolitical developments, and higher raw material prices
  • Raw Material Impact: Raw material consumption increased from ~70% in H1 to ~75% in H2
  • Currency Impact: Dollar fluctuation created INR 70-80 lakh difference
  • Price Pass-through: Started passing prices to customers recently, expected to complete in 1.5-2 months
  • Mitigation Strategies: Using alternate materials, alternate suppliers, and efficiency improvements

Strategic Initiatives

  • New Joint Venture: Incorporated Tricoree Machmatrix Private Limited with 34% stake by Inflame
  • Purpose: Manufacturing electronics and IoT-enabled products, smart control solutions
  • Phased Approach:
  • Phase 1: BLDC motor manufacturing
  • Phase 2: Electronics manufacturing (PCB and switches)
  • Future: IoT-enabled products and smart control solutions
  • Rationale: Backward integration to reduce dependency on Chinese imports, especially with potential BIS regulations on motors

Market Outlook and Guidance

  • FY27 Targets: 50% growth in chimney production and total revenues
  • Production Target: Targeting 400,000 chimneys for FY27
  • Revenue Guidance: Targeting INR 400 crore+ in FY28, INR 500 crore in FY28-FY29
  • Product Mix Evolution: Expect chimneys to contribute 60-65% of revenue going forward
  • New Product Contribution: Built-in refrigerators (ASP INR 38,000-40,000), wine coolers (ASP INR 30,000-35,000), built-in microwaves (ASP INR 15,000-22,000)

Customer Relationships

  • Major Customers: IFB, Crompton, Hindware, Havells, KAFF
  • Customer Growth: Havells business grown multifold, Hindware back on track after management changes
  • Approval Cycles: 15 days-1 month for smaller customers, 2-2.5 months for larger customers
  • Quality Performance: Complaint ratio from market less than 1.5%

Technology and Automation

  • BLDC Adoption: 60% of production converted to BLDC, targeting 80% by end of FY27
  • Automation Initiatives:
  • AI-based quality control through camera vision systems
  • Targeting 15-20% production improvement through automated inspection
  • Plans for fully automated glass plant requiring significant investment
  • Process Optimization: Moving sheet metal processes out of factory premises to focus on assembly

Regulatory Environment

  • BIS Status: Fully implemented on chimneys, expected on hobs by September 2026
  • Import Dependency: Significant components still imported from China including electronics, switches, heat elements
  • Currency Strategy: Started opening LCs in RMB from May 2026

Q4 Performance Context

  • Demand Softness: Market demand softened significantly in Q4 due to geopolitical situation in Gulf region
  • Customer Order Reduction: All major buyers were short of orders
  • Revenue Impact: Q4 revenue approximately INR 35-37 crore vs expectations of INR 55-60 crore

Current Business Trends

  • Demand Recovery: Seeing 40-50% month-on-month growth currently
  • Order Position: Comfortable order position with more orders than planned growth
  • Inventory Levels: High due to import dependency for new products and components

Future Plans

  • Export Plans: Inquiries received but focusing on domestic OEM demand first
  • Main Board Listing: Not eligible due to paid-up capital (minimum INR 10 crore) and net worth (minimum INR 75 crore) requirements
  • Promoter Stake: Possible consideration after Diwali for stake increase

Management Commentary

The management expressed confidence in growth trajectory, highlighting infrastructure readiness, customer trust, product performance, and strategic positioning for future expansion. They emphasized the company's preparedness for import substitution through backward integration initiatives.