IFB INDUSTRIES LTD.

Stock Scan General Overview

Sector Consumer Durables IFB Industries, originally known as Indian Fine Blanks, was
founded in Kolkata, India in 1974 by Mr. Bijon Nag in
BSE Code 505726
collaboration with Hienrich Schmid AG of Switzerland. It is
NSE Code IFBIND engaged in the manufacture and sale of home appliances and
Market cap (INR ₹ 2,916.14 fine blanking components. Home appliance products
Cr.) include washing machines, microwave ovens, domestic and
commercial dish washers, dryers, kitchen appliances, and
Outstanding 4.05
Shares (Cr.) commercial laundry products.
Face Value (INR) ₹10.00 Company as fine blanking components comprise cushion plates
for seat recliners; tongue for seat belt assembly; door latches;
Sectoral Index NIFTY INDIA
gear shift selectors, gear shift interlocks, rotor segments for
CONSUMPTION, S&P
BSE 500
aircrafts; plate valves for compressors; gears, cam plate
assemblies, and sprockets for two wheelers.
Shareholding Pattern
(In %) Jun-19 Mar-19 Dec-18 It is the third largest player with 18% market share in
microwave ovens. The company also enjoys 80% market share in
clothes dryers and 50% in domestic dishwashers. Recently, IFB
Promoter 74.96 74.96 74.96 expanded into ACs and modular kitchens. The IFB sells its
appliances through IFB exclusive stores, multi-brand stores and
Public 25.04 25.04 25.04 its website as well. Their products are also sold in defense
canteens and different institutions.
Others -- -- --
The company is also trying to expand its distribution channel, to
Total 100.00 100.00 100.00 address this gap, IFB has chalked out plans to expand its
distribution reach to tier I, II & III cities.
Financials (Consolidated)
Y/E March FY18 FY19 FY20E
(Rsmn)
Company Management
Net sales 21,517 25,399 29,755
EBITDA 1,597 1,247 1,665 Management is a key factor in a company’s success. The
management teams’ decisions are exposed to the positive and
PAT 833 740 807
negative influence.
EPS (Rs) 20.2 17.9 19.6 IFB Industries is a family-owned business as two or more family
EBITDA 7.4 4.9 5.6 members (Bijon Nag, A.K Nag And Bikram Nag) are involved and
margin (%) the majority of ownership or control lies within a family. Family
businesses may have some advantages over other business
P/E (x) 29.9 33.7 30.9 entities in their focus on the long term, their commitment to
P/BV (x) 4.5 4.0 3.6 quality, and their care and concern for employees. But family
businesses also face a unique set of management challenges
EV/EBITDA 15.3 19.3 14.8
(x)
stemming from the overlap of family and business issues.

RoCE (%) 20.5 11.7 15.7

Source: Company Data
 QUALIFICATION- B.E (Mechanical Engineering)
YEAR OF JOINING- 1975
EXPERIENCE- 44+ YEARS
He is also the Chairman of IFB Agro Industries and Director of IFB
Automotive Private Limited. Mr. Nag is also on the board of Maruti
Insurance Broking Pvt Ltd. and Chairman for Anjali Foundation.

Mr. Bijon Nag

Chairman& Founder

QUALIFICATION- BBA from Richmond College, London,

YEAR OF JOINING- October 14, 1997
EXPERIENCE- 12+ YEARS
He is also on the board of IFB Automotive Pvt Ltd., Thai Automotive
& Appliances Ltd. and Travel Systems Ltd. He has made several
significant contributions to IFB Agro Industries’ growth and
implementation of investment plans and business strategies.

Mr. Bikram Nag

Joint Executive Chairman&
Managing Director

QUALIFICATION- Mechanical Engineer from IIT Delhi

YEAR OF JOINING- September, 2014
EXPERIENCE- 33+ YEARS

He is currently the National President of Indian Value Engg Society

(affiliated to SAVE U.S.A.). He then joined the TELCO, for a period of
4 years in. Post this employment, Mr. Sudam Maitra worked in Maruti
Suzuki for a period of 31 years in the areas of quality including
Supplier Quality, manufacturing, service and supply chain and left the
Mr. Sudam Maitra office as Chief Operating Officer (Supply Chain). Mr. Maitra was
Deputy Managing Director awarded the Supply Chain Person of the year 2013 from Indian
Chamber of Commerce. He was the Sourcing Committee Chair person
of SIAM.

QUALIFICATION- B.Com from University of Calcutta.

YEAR OF JOINING- 1993
EXPERIENCE- 27+ YEARS
He previously held position of logistics head and senior business
executive in the company. Mr. Chatterjee is also on the board of Travel
Systems Ltd.

Mr. Prabir Chatterjee

Director & CFO
 QUALIFICATION- B.Tech (Mechanical Engineering) from IIT
Kharagpur.
YEAR OF JOINING- May, 2006
EXPERIENCE- 27+ YEARS
He previously held position of Deputy General Manager in Eicher
Tractors Ltd. For 15 years. Mr. Chatterjee is also on the board of Travel
Systems Ltd.

Mr. Rajshankar Ray

CEO, Home Appliances Division

QUALIFICATION - Master of Science (Chemical Engineering) from

Syracuse University.
YEAR OF JOINING- Nov, 2010.
EXPERIENCE- 34+ YEARS
He previously held position of CEO in Caldyne Automatics Ltd. For 2
years.

Mr. Parth Sen

CEO, Engineering Division

SWOT Analysis
STRENGHTS
1. Brand Image in Home Appliance Division: IFB has a robust brand image in Home Appliances Division. It is
leading company in the segment with the dominance in washing machines and microwave oven. IFB has a
dominant market share of 70% in clothes dryer and 50% in dish washer, both in volume terms. This brand
image is created by their higher warranty provision (4 years) for washing machines and strong after sales
service to its customers.
2. Healthy Financial Banking: The Company is financially sound and can grow well if it leverages the
opportunities.
3. Innovative Products: The products of the company are innovative and new in Indian market so they have a
near monopoly in dishwasher and clothes dryer with maximum market share. So it attracts the customers
of higher class for more luxurious life style.
4. Compatible Workforce: The Company has a compatible work force which works in team to give a new
height to the company.
5. Wide Distribution Network: Recently, the company has been appointed as a contract manufacturer of the
front loader washing machine by Panasonic to export it to 6 countries of Asia-Pacific. The company has
also received repeat orders from various countries and also anticipates adding few more countries for its
export business. It has a wide distribution network which covers almost every state of the country having
various dealers and franchisees in each state. The management intends to further expand the IFB Points
outlets to 600 by FY20 (largely through franchise mode and majorly in tier2 and tier-3 cities).
6. Continuous Focus on R&D: The focus on research and development by the company R&D centres help to
build innovative product.

Weakness
1. Lack of Pricing Power: the industry is highly competitive which has the presence of deep pocketed MNCs
like LG, Samsung, Whirlpool, etc.
2. Low Penetration in Rural India: The product of IFB Industries is basically for higher and elite classes which
lead to low penetration in rural India.
3. Prices of the Products: The prices of the products are a bit high in comparison to other brands. So it will
not be able to cover the lower middle class.
4. No Promotional Activities: There are no promotional activities for the promotion of the products. Even
there is not any advertisement which can show the features and variety of products. This is the reason
that there are very less sales of hobs and chimneys because people are not aware of its new products.

Opportunities
1. Scope for Growth in the Rural Market: IFB still have not covered the rural market of country. As India has
its major population in rural areas, the company has a wider scope for growth in rural market by launching
low price products.
2. Distribution Reach Expansion: The Company can leverage its multi brand store and availability of e-
commerce websites to increase the sales. The company can also gain from easy availability of consumer
finance
3. New Launches Can Give More Benefit: The new launches which are there in the pipeline can give more
benefit to the company due to favourable external factors.
4. Falling Interest Rates: The recent fall in interest rates will be one of the major drivers for growth in sales.
The effect of fall in interest rates will be witnessed in near future resulting in low Equated Monthly
Installments’ (EMIs) and high disposable income which will lead consumers to spend more.
 5. Growing Middle Class: A young and upwardly mobile lower and middle income groups in large and small
Indian cities have grown in numbers in the recent past. The growing aspirations combined with rising
affordability will lead to an increase in the demand for premium lifestyle products.

Threats
1. Entry of New Players: Especially MNCs. Growth of the Indian economy together with the reduction of
import duties makes India increasingly a target market for many MNCs and therefore, competitive pressure
on the domestic market will continue to grow.
2. Pricing Competition: As its competitors are also there in the market with some low price products the
company is facing threats from those competitors.
3. Significant Rise in Material Cost and Currency Volatility Risk: The significant rise in material cost and
exchange fluctuation drastically impacts margin of the company.

Peer Comparison
COMPANY IFB JHI KEI

Market Cap (In Cr.) 2890.41 5,057.53 4314.06

EPS (TTM) 18.25 36.34 24.77

Dividend -- 1.50 1.20

P/E Ratio 39.33 50.63 22.06

PAT Growth (%) -10.34 -14.18 25.8

D/E Ratio (%) 0.01 0.31 0.65

Return On Assets 6.14 10.70 19.44

Return On Equity 11.91 14.01 23.34

Return On Capital 11.90 16.82 43.68

Employed (%)
SHAREHOLDING PATTERN:

JHI KEI
3% 13% 15% Promoter
11% Promoter

46% FIIs
FIIs 23%
73% Insurance
Insurance
4% Non-
12% Institutional

IFB

25% Promoter

75% Non-
Institutional

Johnson Controls Hitachi Air Conditioning India (JHI) manufactures a wide range of products- room ACs (split &
window), commercial ACs including Chiller, Ductable ACs, Telecom ACs and VRF system. It is set to emerge a lead
player in India's fast-growing room AC market due to launch of innovative premium products in inverter and 5-star
ACs. JHI currently enjoys the 11% market share in room AC’s.
KEI Industries (KEI) was established in 1968 as a partnership firm Krishna Electrical Industries with prime business
of manufacturing house wiring rubber cables. It was converted into a public limited company with the corporate
name KEI Industries in December 1992. The company manufactures and supplies power and other industrial
cables. It has leveraged its cables business to tap wider opportunities across consumer, B2B and has also scaled up
the EPC business. The future of the company is led by sharpening government focus on Housing/ Power For All
initiatives driving healthy cables demand and management’s initiative to forward integrate to EPC across voltage
class & expand consumer business.

Future Outlook
IFB Industries delivered a bottom-line expansion of 48% in the FY19 which indicates strong financial health
and the company is able to meet upcoming liability payments by its current cash and short term investment
holdings. It is also leveraging rising demand growth with increasing disposable income and easy access to
credit. Increasing electrification of rural areas and wide usability of online sales would aid growth in
demand.