Record revenue growth masks near-term margin pressure

Delivered ₹2,034 Cr, exceeding ₹2,000 mark

AC ₹1,401 Cr (+38.1% YoY), WM ₹211 Cr (+67.2% YoY); growth rates indicate new highs

RAC volume +20-22%, ASP +10-12% confirmed; combined ~30%+ growth

Partially passed; full pass-through delayed to December. Margin compression shows incomplete pass-through so far

Q1 OPM 7.3%, aspiring to 8%. No evidence yet of margin recovery; commodity prices remain elevated

New 1.8M capacity facility at Greater Noida commissioned; business grew 67% to ₹211 Cr. New 18-20kg platform expands addressable market (higher value, premium segment).

On track for December-January mass production start at 2M capacity. No delay; target still FY27. Still 'keeping under low profile' per management.

Anchor customer tied up with 30-35% capacity commitment (1.2M unit facility). Active discussions with other customers yielding 'soft commitments'. De-risks ramp.

Prior call aspired to margin improvement through FY27. Q1 came in at 7.3% vs 8% aspiration. Full commodity pass-through now explicitly delayed to December, not immediate.

20%+ volume growth for full year; 25-30% growth for FY27-28 on new capacities. Previously qualitative ('better than industry'). Now quantified.

Primary industry +10-15% volume, +10-12% ASP = 20-25% combined. Secondary mixed signals but better than primary. Inventory normalized; still elevated by choice due to competitive intensity. RAC outsourcing % rising.

Some spillover but not large. AC is seasonal; miss demand window and lose sale. 6-month growth 15-20%, not very large. Low base helps.

Partially passed, varies by customer; copper $14K, rupee ₹95.5+. Price increase pending December; soft season now. Expect December quarter pass-through.

Cannot avoid this; part of value chain. Working to improve operational efficiency and control expenses. Margin profile better than others. Preparing for margin battle.

Volume ~20-22%; ASP +10-12%.

No definite data; estimates 4.5-5.5 million units at channel and brand level. Belief: inventory down this year vs last, but elevated by competitive choice.

July-Sep are lean periods. Some brands tried hikes; some rolled back. Very niche, brand-specific. Limited success overall.

Online, targeting Dec-Jan mass production. Keeping under low profile. Will share details when mass production starts. CFO took capex specifics offline.

Check your numbers. Despite PLI, outsourcing % rose at industry level last 3-4 years. Brands realizing in-house not economical; post-PLI, outsourcing more sensible. Lower-end outsourced; premium in-house.

Stopped giving revenue guidance. WM robust growth last 2-3 years, +67% this quarter, seeing healthy growth ahead 2-3 years. Refrigerator starts Dec-Jan, commercial ramp FY28; tied with anchor customer at 30-35% capacity commitment.

Slightly under pressure. Expecting better pass-through in coming quarters. Commodity inflation sharp, rupee depreciated sharply. Hoping commodity stabilizes and rupee stabilizes; pass-through better. Ex-PLI, Q-o-Q improvement is quite significant in AC margins.

Electronics: job work, margins typically stable. WM: resin prices risen sharply, full commodity pass not happened yet, hopeful for price increases from customers in coming quarters.

No. Plastic business like component business; pass-through faster due to low inventory. Client-directed sourcing; margin impact low.

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Consumer sentiment strong in auto etc. AC not seen huge inflation. Post-GST 10% cut, expect 10-15% more hikes absorbed. Latent demand. Prices haven't risen much historically despite product improvements. Electricity subsidy more restrictive than product price. AC still ₹30-35K, much cheaper than other durables.

Disagree. Last year unusual with bad AC season and rating change creating inventory game. This year brands and companies under pressure; expect price increase this year to be passed on. Industry will likely take effort to increase prices.

Should be a possibility for us. Next 9 months low base, channel inventory not high. Should have 20%+ volume growth full year.

Very hopeful should surpass '25 numbers this year. Don't see reason why not if sales good in second half. Prepared for higher volumes if opportunity.

Next 2 years strong growth trajectory. This year low base, new projects online. Next year ramp up. Competitive positioning improves with compressor. Offer full bouquet single-company level (WM, ref, AC, TV via JV). Strong positioning. Next 2-3 years don't see challenge. FY27-28 expect 25-30% growth. FY29 consolidation year OK; focus on profitability, ROCE, ROE.

SAP implemented across 14 units. Inventory visibility improving. Management development underway. Hired Big 4 audit firm for SOPs. Moving from system design to component-level R&D (compressors, controllers, motors). Backward integration critical; QCO suggests import restrictions likely. Building India teams. Cannot disclose specifics on compressors publicly.

10% EBITDA margin not right metric. Business works on per-piece basis. Percentage is outcome. At $7K copper, margins looked high % terms. At $14K copper, customer gives same fixed per-piece amount, % looks low. Not committing to 10%, but per-piece should normalize soon.

Compressor price India ₹2,800-3,000. That is what we hope to sell once we manufacture.

RAC realization average close to ₹21,000 now.

Industry imports 50-60%. Govt notification: imports restricted to 25% of FY25 levels (~2.5M of 10M). After March 31 2027, import not allowed. Will see tightening from Jan-Feb onwards. Possible second line in April-May. Geopolitical risks, supply chain dependencies exist but general to industry.

Commodity prices continuously increasing. Supply chain constrained (QCO, IGT import restriction Nov). Keeping strategic inventory important. Example: 5L AC at ₹700 Cr prior year now ₹940 Cr due to copper/components. Higher inventory reflects commodity inflation, not demand. June softness offset by strategic need.

New capacity brings total to 3M units. Hoping 70-80% utilization by FY28 (not end FY27). Seeing rapid volume growth. Positioning plant for demand next 2-3 years. Prior capacity ~70% on annualized basis (peak >100%).

Fixed asset turn target >4x overall. Compressor margin depends on competitive positioning. First line used largely for in-house AC manufacturing; margin additive hoped for. If QCO implemented April 1 2027, pricing power via import restrictions should yield decent margins.

Hope to bring down AC dependence from 60-65% to 50-55% over 2-3 years. WM, electronics, plastic, new lines growing faster. Will reduce seasonality.

First line ~2M output, at 80% capacity ~1.6-1.7M compressors. At ₹2,850-2,900 per unit. Plant can deploy 4 lines eventually. First line ~6 months to commission; next lines 3-4 months each.

Don't share order book numbers. Typically brands give forecasts, not firm commitments. AC season ending now; fresh order book starting Sep-Oct for Dec onwards. WM have commitments but not allowed to share specifics; never practiced sharing.

Total capex ~₹400 Cr completing compressor and refrigerator projects. Big land parcel in Salarpur consolidating plastic and other business. Focus on completing projects and sweating assets this year.

Don't give quarterly guidance, never given. Won't comment on Q2 numbers.

Low base for 9 months (barring Dec). Channel inventory normalized. Industry expected normal. Achievable per CFO.

Compressor online Dec-Jan, refrigerator ramp FY28, washing machine ramp continuing. Assumes successful execution and demand hold-up. Called 'expectation' not formal guidance.

Q1 at 7.3%, 70bps below target. Management expects improvement from December commodity pass-through. Called 'aspiration' not guidance. Assumes successful price increases and stable commodity prices.

Completing compressor and refrigerator projects; consolidating plastic business in Salarpur. Focus on sweating assets, not expansion.

Copper $14K (+78% from $7.8K), rupee ₹95-96. Incomplete pass-through to customers; full pass delayed to December. Inventory carrying cost elevated (₹940 Cr for 5L AC vs ₹700 Cr prior). Risk: prices stabilize/decline before pass-through, margin remains crushed.

New brands entering RAC, mid-pyramid under pressure. Brands consolidating to OEMs to reduce in-house capex. EMS players like PG may see pricing power erode if brands fight for market share via discounting. Management acknowledges 'battle coming in next quarters'.

Compressor mass production targets Dec-Jan 2026 (first time); refrigerator commercial production Q4 FY27. Delays would push revenue benefits to FY28. Refrigerator still ramp-up risk; anchor customer only 30-35% of 1.2M capacity; demand for remaining 65-70% unproven.

Management claims per-unit margin remained stable despite % decline, citing per-piece pricing model. No quantitative proof provided. If per-unit margins also compressed due to price inelasticity (customers refused price increases), margin recovery will be harder.

Compressor and refrigerator facilities depend on imported machinery and components. Geopolitical tensions, tariffs, or supply disruptions could delay commissioning or increase capex.