PG Electroplast Limited (PGEL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the PG Electroplast Q4FI26 Earnings Conference Call, hosted by GM Financial Institutional Securities. This presentation has been prepared for informational purposes only. This presentation does not constitute a prospectus, offering circular or offering memorandum, and it is not an offer or initiation to buy or sell any securities, nor shall part all of this presentation from the basis of, or to be relieved, or in a connection with any contract or investment decisions in relation to any securities. This presentation contains forward-looking statements based on the current held beliefs of the management of the company, which are expressed in a good faith and in management's opinions are resonating. The forward-looking statements may involve unknown and known risk, uncertainty, and other factors, which may cause the actual results, financial condition, performance, or achievements of the company or industry to differ materially from those in forward-looking statements. This forward-looking statement represents only the company's current intentions, beliefs, or expectations, and any forward-looking statement speaks only as of the date on which it was made. The company assumes no obligation to revise or update any forward-looking statements. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shaleen Chokshi from JM Financial Institutional Securities. Thank you and over to you, sir.

Thank you, Rutuja. Good afternoon, everyone. On behalf of JM Financial Institutional Securities, I welcome you all to the Q4FI26 Earnings Call of PG Electroclass Limited. We have with us the management of the company represented by Mr. Vishal Gupta, Managing Director of Finance, and Mr. Pramod Gupta, Chief Financial Officer. With this, I will hand over the call to the management for their opening remarks, both of which we can open the floor for questions and answers. Thank you, and over to you, Mr. Gupta.

Thank you, Shaleen, and good afternoon, everyone, and thank you for joining us for PG Electroplast Q4 and full-year FY26 on its call. I am Vishal Gupta, Managing Director, and today I am joined on this call with Mr. Pramod Gupta, our Chief Financial Officer. Before we get into the numbers, let me check the context. Because FY26 was a complex year for the industry, the challenges were external and largely simultaneous. That said, our strategy remains the same and our long-term condition has only strengthened through this cycle. I will take you through four things today. First, the industry context and what made FY26 so difficult. Second, our own Q4 and full year performance. Third, the strategic progress we have made despite the headwinds. And fourth, where we are headed in FY27. Now let me start with the industry backdrop. The RAC industry, which remains the largest contributor to our product revenues, experienced a decline of approximately 15% during F526. This was against a backdrop led just 12 months ago when we and the rest of the industry were guiding for a strong double-digit growth. The demand-side shocks were largely responsible for this degrowth. What? Q1 was delayed by an early and unusually prolonged monsoon. The RAC season effectively collapsed after May. June and July saw very weak industry sales because of high channel inventory. Second, due to the GST rate cut announcement on the 15th of August, there were very few sales till 22nd of September, which further delayed our inventory liquidation. Third, anticipation of the VE rating transition led to a pre-pornment of production and sales in the month of December 2025, resulting in less off-takes in the months of Jan and Feb. This further reduced our pricing power and ability to pass through the increases in commodities and exchange rate impact. Most importantly, on top of all this, there was a meaningful decline in consumer spending confidence. In consumer spending confidence, Inflation in essential household categories reduced the availability of disposable income and Indian consumers adapted a more cautious, savings-oriented behavior throughout much of the year. On the supply side, we face unforeseen and large cross-inflation, commodity prices, copper, aluminum, plastics, and key components rose sharply. More significantly, the Indian rupee depreciated approximately 20% against the U.S. dollar on a YOY basis, substantially inflating our import costs. Since December 25 till April 26, the industry implemented cumulative price highs of around 10 to 15 percent, but with these demand and excess inventory in the channel, the ability to fully pass through these increases remained constrained, suppressing gross margins across the entire value chain. Then in March, which is historically our single largest production month of the year, we were hit by a shortage of commercial LPG arising from the Gulf conflict. This forced nearly two-week plant shutdowns to retrofit our operations to alternative fuel sources at a very exorbitant cost. Non-availability of LPG and general uncertainty triggered reverse migration of labor. The mentor shortages and uncertainty around fuel availability disrupted the ramp-up which severely affected our production targets. In parallel, we also faced a shortage of trucks because of a diesel shortage in the 2nd of the March. Pramodji?

Yes, I will now walk you through the Q4 numbers in detail. As you can see, consolidated revenues for the quarter were 1,717 crores and a decline of 10.4%, about 10.4% YOY, while 10.1% YOY, EBITDA came in at 131.54 crores. Compared to 231.72 crores last year, which was a decline of 43%, net profit for the quarter was 64.2 crores versus 146.39 crores and a decline of 56% for the quarter. If you see the specific disruptions and their financial impact, The LPG crisis in March disrupted room AC production, especially in Supa, and we lost production to the extent of approximately 300 crores due to the LPG crisis. The truck shortage, which resulted in an estimated sales loss of close to 120 crores for the quarter. As finished goods were stranded at our plant, and dispatch were deferred into the present. Together, these two items alone accounted for an aggregate revenue loss of approximately 420 crores in the quarter, on a base of 1717 crores. So, had these sales happened, we would have actually crossed 2100 crores plus sales. Commodity inflation and currency depreciation resulted in an estimated gross margin impact of approximately 250 basis points during the quarter, which we were not able to pass through. For the full year FY26, our forex loss was 38.77 crores versus a forex gain of about 17.99 crores in FY25. Given for the quarter, we had a forex loss of about 25.82 crores versus a gain of 12.77 crores last year's same quarter. In aggregate, these combined factors resulted in an estimated PBT impact of approximately 120 crores for the quarter. We continue to incur most of our fixed and operating costs, even as the production was impaired in the month of March. And even in January and February, because of the slow production, we had to incur all the major costs, despite the production not being ramped up fully. Our product revenue contributed 1,412 crores, which is 82.5% of the quarterly revenue. Within that, room AC revenue declined 12% YOY to 1,210 crores, that is 1,210 crores. For the full year, RAC revenue grew 9% year-on-year. The washing machine business grew phenomenally 52% on a full-year basis, and for the quarter, it grew at about 70%. Cooler business saw a decline for the quarter of about 10.8%, and on an even-foot-year basis, there was a decline of 8.2% in the cooler business. Goodworth Electronics, our JV entity-reported revenues of 155.1 crores in Q4 versus 107.6 crores in the same quarter last year. EBITDA improved to 6.19 crores during the quarter from 0.94 crores last year, same quarter. Full-year consolidated revenues are 5,288 crores versus 4,869 crores in the last financial year. EBITDA stood at $441.76 crores versus $519.16 crores, and profit after tax stood at $193.61 crores versus $290.92 crores last year. The profitability decline reflects the margin compression from input cost inflation. We continue to gain wallet share within our anchor customers and deepen our trust with our brand partners and continue to benefit from the structural shift towards outsourcing in the India consumer durable manufacturing. During the full year, working capital was stressed mainly because of the higher inventory which we carried and the demand washout which happened in the first quarter last year, and we carried the higher inventory through the Q4. That also delayed the connections because some of our customers were also seeing huge inventory at their end, and the receivable cycle was stretched. Leading to higher borrowing utilization, and therefore the higher interest costs resulted. But this year, things are likely to change significantly as we see things normalizing. Now, let me hand back to Vishalji to cover what we are building through the cycle.

Thank you, Tomoji. Yeah, thank you, Tomoji. Let me cover the new initiatives that will come online in the next few quarters. We are developing a new refrigerator manufacturing facility in Sri Citi in South India, which is progressing well. We plan to start commercial production by quarter 4 of FY27, and this will become a meaningful revenue stream in FY28. We have already entered into a tie-up with our anchor customer for this facility. We are also establishing a rotary compressor manufacturing facility at our super plant. Machinery has been ordered. Installation is planned to begin in August 2026 and operations are expected to commence by quarter four of April 27. We will have a capacity of 2 million compressors in the first phase which can be expanded to 4 million compressors in the second phase. We have received approval and commitments from our anchor customer for this facility as well. Compassion manufacturing will significantly deepen our backwards integration in the RAC business and will greatly secure our supply chain. Our expanded washing machine facility is now operational at Greater NOIDA. We have strong order book visibility and outsourcing momentum in the semi-automatic segment continues to build. We have grown this business by 52% in FI26, and we look forward to again growing this business in a very meaningful manner in this coming year. We are consolidating some of our molding facilities at Salarpur Rajachan, which will help us in enhancing our operational performance, space utilization, eliminating warehouse leases, and allowing us to build better economies of steel. This is a multi-year cost structure improvement and initiative, and this will show up in margins over FY27 and FY28. During FY26, we have completed our migration to SAP. This has improved our inventory visibility, demand planning, and financial reporting accuracy. This is very important as we scale up our operations. We have implemented a comprehensive cost management program that includes granular expense tracking, lease rationalization, low-cost automation investments, workforce scaling, and productivity enhancement. These initiatives are aimed at preserving and exchanging our cost leadership, which is a very poor competitive mode for us in our outsourcing business. Now, let me turn to FY27. Channel inventory have now normalized materially from the peak of approximately 5 million units seen during April 26. April and May have shown better sellout momentum compared to the same period last year. This will help us in controlling our interest in a very big way. The Alnino weather pattern is forecasted to intensify from July onwards with a peak expected in September. If this holds, it could extend the effective AC season into months that are typically off-peak. India's room AC penetration remains among the lowest globally, well below 10% of the households. Rising temperatures, urbanization, growing middle-class income, and replacement demand from the shift to energy efficiency models are structural demand drivers. The outsourcing trend in India's tangible growth manufacturing is a structural long-term shift. Brands are rationalizing their own manufacturing, focusing on design, branding, and resolution. They are relying on partner sliders for cross-section production. For FY27, we are targeting better than industry revenue growth. We expect EBITDA margins to improve towards 8% as operating leverage returns improves cost pressures moderate and our cost-discipline initiatives take effect. Working capital intensity is expected to improve significantly as inventory and the recruitment cycles improves. We expect to improve operating and pre-cash flow generation in FI27. On capital allocation, we will continue to invest in our strategic projects, the refrigerator plant, the compressor facility, and washing machine expansion, while maintaining our discipline on returns. Our business model is stronger, capacity is growing, customer relationships are deepening, and the balance sheet gives us the confidence to invest through this cycle. We are entering FI27 leaner, better organized, with normalized channel inventory, new capacity and capabilities coming online, and stronger customer relationship. The quarters ahead will reflect that. Thank you, everyone. Now, we will open the floor to the questions, please.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Rachel Lohade from Nuwama Institutional Equities. Please go ahead. I'm sorry I interrupted. Can you please speak a bit louder?

Thank you for the opportunity. The first question I have, you know, if you could talk a little bit about the gross margin contraction in a bit more granular manner. The question I have is, you know, had a large inventory, as you pointed out in the initial remark, throughout the year. So, ideally, given the copper price inflation in December and January, with our inventories, we should have benefited. So, if you could talk a little bit about this pricing part of it, and has that normalized in the April and May month?

Yeah, so I'll take this question. Basically, what happened was we had a good amount of cheaper inventory till December. But for us, December quarter was very strong, as you may recall, that in December quarter, we grew almost at 46% during the quarter. And our AC business actually grew very significantly in the December quarter. The sales in the December quarter was almost 932 crores versus last year's same quarter at 516 crores. And this actually took care of the low-cost inventory of raw material, and we had a good understanding of a good commitment from the customers for January, February, March, and therefore we restocked the inventory of raw material for the March quarter. So whatever cheaper inventory we had, most of it was actually utilized in the December quarter. In fact, to give you very specific numbers, we had about six lakhs, six and a half lakhs AC material, out of which almost 4.8 lakhs kind of a number we actually did in the quarter ending December. So, the cheaper inventory that we were left with was very little in the January, February, March month. And unfortunately, the January and February months were very slow. We did try to take a price increase, but we were not able to pass on the raw material cost as well as the rupee depreciation fully. And it hit the margins in the January, February, March quarter. In the sense that most of the sales actually happened in the month of March, and we were not able to pass on the cost completely. Also, we had some additional cost during these months because some of the energy transitioning which we had to do from LPG to maybe more expensive energy sources. Had to be absorbed by us during that quarter.

And how about April, May, sir?

We have taken a price increase in April, tried to pass on the price increase which we have seen, or the cost inflation which we have seen. But to be very frank, situation is very dynamic. Rupee keeps on depreciating, and some of the key commodities are still continuing to go higher up, especially on the aluminum and copper side. So whatever price increase we have taken, probably it's been good till maybe April and May. And if, you know, season continues well into June or July, etc., then the costs have further gone up from our price increases. That's all I can say. Got it.

I will further add to this. See, we have been able to take some price increase in the March quarter, and in the June quarter, also we have taken some price increase, which has largely taken care of the commodities. The problem is the exchange rate. Exchange rate is something which is so volatile and moving, and normally whatever, you know, price arrangements you have with the customers, they are based on your current dollar exchange rate. And, you know, normally the payments happen a month or two months later from the current supplies. And so what will be the exchange rate in one or two months later, that is one big joker in the park.

Understood. And the forex loss, what you mentioned, is part of the RM cost or is part of the other expenses, sir?

It's a part of the other expenses. It actually goes in the part of other expenses. The forex gain actually reduces the other expenses and forex loss actually increases the other expenses. So coming back to your one more data point, I want to highlight that, you know, a lot of the Forex exchange laws happened because Most of the liabilities, which is the unhedged liabilities on account of opened LCs or some of the OA payments, which were due later on in the quarter, maybe in the April or May or June quarter, they were marked to market at the quarter end number, which was at 94.8 rupees for us at the end of March. And those also actually led to a forex. Some of it we actually covered when the rupee came down to something like 93 rupees, almost about 15 to 20 million dollars of hedging we did, and some of the payments of those liabilities have been made at those.

Got it. Just one number on the industry, if you could talk overall volume number for the industry in terms of manufacturing and how much was the outsourcing of the total. I believe you would have still gained some market share, but just wanted to understand. What the numbers would be in your estimate?

It's very difficult to have those accurate numbers, but, you know, the industry overall manufacturing effect when they say should be anything between 13 to 14 million, and we, I think we are operating around 12 to, around 13 to 14 percent of the total India Got it.

I'll call back in the queue for more questions.

Thank you. The next question is from the line of Tanesha from Dam Capital. Please go ahead.

Hi, sir. Good afternoon, and thank you for the opportunity. Sir, my first question is on, you know, how the quarter is going on after the ongoing season. Given that, you know, almost three weeks of April were muted, and we just saw a pickup post-act for secondaries in the end of April, you know, and given that we were to begin the year with higher inventories because of, you know, the challenges that we faced in 4Q, how is demand shaping us for us? How is demand shaping up for us and also the outlook to some extent if you can give for the industry for from an FI27 perspective.

See, overall, April has been a decent month. May is also looking to be a decent month. But I will not risk taking any such, you know, long-term forecast. But last year, we have already suffered on that because this business is so dynamic and so much weather dependent. And, you know, nobody knows what is going to be the weather. These are all forecasts what we have. But it looks the overall channel inventory has normalized because the April, May the sellout has been very good. So as of today channel is sitting at a very normal inventory. So we can see at least not as compared to last year, we might see some good sales or some decent sales happening in the off peak months of July, August, September. That is all I can say, boss.

Nonetheless, I will just add here that this year, the channel and brand inventory is very much normalized at the end of mid-May also, and even in the May month, whatever feedback we have got from most of the brands, the sellout has been much higher than last year. So, channel inventory, brand inventory is normalized. Most of the industry players this year have had some setbacks in production on account of multiple factors like labor shortages. In some geographies, there has been this new labor code which has caused some disruption temporarily, and in some cases, because of the non-availability of LPG or LPG fenders being. Price very high. The temporary labor has gone back to their home. So, all those kind of issues have actually also hit the production. So, net-net, the supply has been lower this year, and while the demand has been higher, which has led to overall channel and system inventory becoming much normalized than last year.

So, any number which we could put to the channel inventory right now?

I don't have those numbers right now. Maybe you can connect probably post maybe first week of June. That time we will get to know a good color on it. But from whatever feedback we are getting from the sales channel, the sellout this year has been much stronger. That is what we have learned till now.

Sure, sir. Understood. So my second question is, you know, the margin impact which we've seen on a YOY basis, right, on the gross margin, especially almost a 260 BIP impact. You know, we spoke about a 10 to 15% price hike which the industry has taken. Can you possibly quantify the amount of price hike which we've taken to the brand and the gap which yet sort of remained? Because I'm trying to understand that how do we see the margin sort of normalizing into FY27 from a gross margin perspective?

So, I'll tell you, like, we would have also taken a price increase of anywhere between 10% to 12% till now from the last year basis on overall numbers. As Vishalji was explaining, there is a rupee which has depreciated very sharply, and some of those payments are made generally slightly later. So those things have not got priced in till now yet. That is one. Second thing is there, which is important, is that the whole value chain has been under stress last year. And it's only in the month of April that the industry took a very meaningful price increase, which is the brands took a meaningful price increase to the channel. And that has actually also reflected for us also. And nonetheless, we will be still probably having a lower percentage margin in the AC business this year. But in the absolute amount, the gross contribution that we try to target per piece, It's likely to be in the range of historical averages. That is what we foresee for ourselves in the coming year.

Understood, sir.

And, sir, for this year, the PLI remains at 37.5 crores? Understood. And 50 crores for the next year, right?

Yes. We have been able to meet all our PLI targets. And, in the last year, and the PLI that is going to be due for the financial year 26 is going to be received in 27, and therefore, we will be taking that into account in 27.

And, sir, I think that will be 71 crore rupees, Pramalji, because we will have NGM PLI also keeping on.

Yes.

So, total amount will be 71 crore. 71 crore for FI20.

The amount is for FY26, which we will be receiving in 27 and recognizing in 27.

Okay. Okay. And just one last question, if I can squeeze in. On the compressor bit, right, we spoke about putting up the machinery, etc., you know, in this year. So, but we're yet awaiting the approval. So, any update on that?

No, no, we don't need any approval. The compressor machines have been ordered, and we are putting up this plant by ourselves, and we already have a tie-up for the customers also, and the product approval is online right now. We don't need any approval for this. There is no JV in this.

Understood, understood. I'll fall back in the queue. Thank you so much for answering my question and wishing you all the best. Thank you.

Thank you. The next question is from the line of Jitendra Arora from ICICI Prudential Life Insurance. Please go ahead.

Yeah, thanks for taking my question. Actually, given the fact that you mentioned that it's very difficult to give any kind of guidance about K-27, Hey, man, I'm... Go about planning what kind of capacity you want to install. How do you stock up on inventory? Then how do you do that? See, because as investors, we'll assume that management has to have some sense of what kind of demand they can expect. I understand that weather can play as well, but we know that at least We see a bulk of the season is through because we're sitting in May and June is perhaps the last big month of the season. We will start planning for next year now, practically your next season. So, I'm actually wondering that how should one, if one were to model any kind of revenues for FY27, how should one go?

Hello. Yeah.

Hello. I think we lost my medal.

Can you hear me now?

Yeah, it's better. Yeah, please. So, yes, I think I got your question. You can know. See, we do keep, we do modeling. So, you know what has happened this year, why this year is little different from last year. Last year, if you see the whole year, there was such a big investment, three overhangs on the whole industry, which won't be there. So, as we have already said in our commentary, that we will see a little, a better uptake in next few months, which might be off-peak months also. And then, you know, once we enter the season with a normalized inventory, so, see, last year was a low base, so we should see a decent growth in this, but we don't risk, we don't want to take any risk of giving any numbers as of now. As Pramuji said, first quarter is done and then by June, by July, middle of July end, we'll have a fair idea how the industry, you know, performing, then we might be in a better position to give some clear answer on the numbers.

See, there is also that by that time, it's nothing that it will not be the weather next season, right?

So, no, no, no, definitely, sir, see, no, no, that is right. So, we'll start preparing for the next year's season, and particularly in March, which is FY27 last date, by up to March, nobody is all, you know, it's a roll of a dice. So, it's all primary selling, manufacturing, and channel filling. So that should remain strong going into by end of FY27 because by June, July, August, we should be at a very normal inventory at an industry level. So, I see, at least there, we have our internal clients available with us, but I don't think we are in a position to share those clients right now with the investors.

My second question is about not the gross margin, but how should one look at the gross profit as a whole? You mentioned that you were not able to pass the price increases in the last quarter, and right now also what you have passed on perhaps not fully cover you for rupee depreciation or rupee volatility per se. But let's say as investors with FY27, I'm looking at your gross profit and top line. Will it be fair to assume that your gross profit will at least move in line with your top line? Will it be better off given that you've been able to pass on some price?

Thank you, sir. See, commodity price increases are largely taken into account from our customers as of today. But, you know, exchange, it is one thing which is really, you know, you can't put any finger to that number right now. And as we have seen, last year, we have suffered massively because of the forex thing. We take certain budgeting in the costing also. But if it moves beyond that, you know, then it becomes a pretty big problem for us, which has been there for effort. But as you said, so largely our PBT numbers should move in line with our sales top line growth. It should move in line, provided we don't see very big. Change in the rupee exchanges, you know, it may be weaker. Today, we are sitting in maybe 94, 95.5 something. It can go up to 97. This is what we factored in. But it goes beyond that, then, you know, it becomes a problem for everyone.

So that is understood, sir. Moving back to this, so the fact is that in FY25, we reported a PAT of around 270 crores, and this year, it was much lower than that. When do you expect to cross the FY27, FY27 PAT?

Yeah, if the normal situation is there, then yes, we very much hope that we should be able to cross that PAT. The situation is very dynamic still. There are many things which are not yet known. One is obviously this situation in the Middle East, and then this El Nino, how the consumer sentiment is there in the second half this year, especially after a very steep energy price increase, which is there and maybe more coming, and also because of the rupee depreciation, the inflation. So all those things we have to take into account, and we will probably be in a better situation post-June quarter to take a call on these things. And then we can probably give you some better color on that. But we are very hopeful that if the situation normalizes sometime this year, then we should be able to at least have a... We can probably cross the profit which we delivered in 2025.

Thank you.

Thank you. The next question is from the line of Vipra Shivastava from Philip Capital. Please go ahead.

Hi, sir. Good morning. Just quickly, it's on the compressor side.

Given that now we are going on our own in terms of setting up the capacity, so just want to double check, so

we are not tying up with the Chinese partner which we were doing before. Secondly, we have the required technical expertise for the manufacturing of these compressors. Most understanding is correct, right?

Yes, sir. So we are going on our own. We are setting up this facility and we have acquired those capabilities which will help us in, you know, offering a cost competitive and efficiently performing compressors to our customers in India.

Sure, sir. Just a follow-up on this, sir.

So, currently, as we know, there are two brands which dominate the compressor market. So, you know, will PG be the third brand there, or how do you plan to go about it?

Sir, once the commercial production will start, we will update you on that. As of today, this information is enough that we are setting our compressor manufacturing facility, and we see no challenge in the acceptance of the compressors which will be made by us, by our customers. The tire is already in place, as I am setting my commentary.

Sure, sir.

And, sir, lastly, in the entire compressor, what percentage of value add will be doing in the entire middle of a compressor?

Around 60% of that will be localized, and around 40% will need to improve. Sure, sir. Thanks a lot. Thank you. Thank you.

Thank you. The next question is from the line of Sommel Mehta from Kotak Mutual Fund. Please go ahead.

Yeah, thanks for the opportunity. Sir, if you can just call out for FY26, what was the total production in units both for IDU and ODU and the capacity utilization for the year?

See, our overall production in F526 was around 1.75 million sets. Okay. And we make, normally we make some extra IDUs for some customers who take IDUs extra, which should be around 250 to 300k for the whole year.

Okay. So 1.75 and 2 million very broadly.

No, no. No, 200k. 200,000.

And the average utilization for the year was?

The average utilization is something, you know, it's very difficult to tell, but it should be something. See, our overall yearly, if you talk about annual capacity of AC minus AC is around, as of today, I can say it's easily around over 0.5 million, you know, 5 million. But average utilization is normally in AC business is around 50%, 45 to 50%. Sure.

And second question, in terms of the incentive income, have we received the entire incentive income due for FY25 in this financial year?

We have received the amount of TLI which was due for us. We have received that after the closure of this quarter, but we did receive the amount which was due to us.

So, so far, as of March 25, whatever the PLI was due, there is no receivable on that front. It is only for this financial year, which will be the part of the receivables.

Yes, which we will be filing for the same probably sometime around in October, and we hope to get sometime in February, March next year.

Okay. And in terms of, for the financial year of FY26, in terms of top three or top five, you know, however you would want to call out, was there any change in terms of the top three or five lines, any, while the year was challenging, but for specific brands where the challenge was far higher than others, something on those lines of increment.

See, normally, see, overall, there was no such specific behavior from any of the clients, and largely top three top clients are in the same ratio as of today also. There was no, it was a general industry-wide, very similar behavior, what we have experienced in FI conditions itself.

Okay, okay. And last question from my side, and slightly a bit premature, but in terms of compressors, So, once the stabilization of the plant happened, which could be maybe, you know, 12, 18, 24 months from now, whatever timeframe will be required, in the initial cost analysis, what you would have done, how competitive would it be versus maybe some of the Chinese players who have plants in India? Any ballpark number 10, 15, 20% premium or you would be able to produce at the similar price what has been offered by, you know, plants which are in nearby vicinity for you.

Sir, this whole project has been delayed by more than 18 months. Because of certain things, there were certain feedbacks. That is why it took us 18 months to reach a level where we are confident that our product will be cost efficient also, energy efficient also. And I will tell you, sir, we are expecting that we will be able to hit our capacity numbers in FI28 only, you know. That is the target and internally we have with us and that is the kind of discussion we have already had with our customers also on this.

Okay, okay. Sure. Thank you so much, and all the best for the subsequent quarters. Thank you.

Thank you. The next question is from the line of Neil Mehta from Equira Securities. Please go ahead.

Yeah, hi, sir. Thank you for the opportunity. Sir, roughly we have spent almost 800 crores in a financial or FY26. Can you ballpark US's broad-ranging each of the new initiatives that we have spent in these years and what kind of peak acceptance in each of the new initiatives looks like? Yeah.

Out of the total 875 crores that we have spent this year in the capex, Almost close to 500 crores has actually gone into the land and building piece. I'll try to put things in perspective. We have actually put up a new 10-acre campus for washing machine in Greater Noida. That came through and that facility is ready. We have another about, I think, 50-acre campus in Shree City for which land has been procured and construction is going on for the refrigerator. So that part of that money was spent on the land and some advances for the building has actually gone into that 500-odd crore amount of capex. Then we had a completion of the. The compressor building in NGM Supa, which was already about a 12-acre campus, half of which was built and half of which was completed last financial year, which is in 26th, the building was ready in early May, June itself. So, some part was... We spent there on that, and then we have actually this year also bought another 72-acre land in Kamargaon, in Ahmednether only, and all the payments for the land have been made, and some levelling, etc. has gone into that. So those things contributed to the land and building portion this year. Apart from that, we spent close to 70 crores for the washing machine, plant, and machinery. Almost close to 165 crores was spent in the RAC plant and machinery for expanding capacity. And the other businesses, which is molding and electronics, took about 35 odd crores for the... The increasing of the capacity. And 10 crores was the plant and machinery advance for the refrigerator business, which was done in the last financial year. So that is the breakup. Now coming to your asset turn business question, we are very hopeful that once all these capex are over, which should be happening this year, we will be probably be doing a capex of close to 400 crores this year. We should be able to utilize these assets and get to an asset turn of 4X plus by 2029. So maybe this year and next year, we'll see the ramp-ups of the facilities which we are producing, which we are building, and we will be able to get the... A 4X asset term, which we typically have for us from these new faculties also, right end of 2029. One more thing I want to highlight, we also actually bought an 8-acre campus in Salarpur, where we are consolidating our plastic moulding business. That campus is also going to get ready by maybe July or August this year, and that also has been a part of those 500 outgrows which we have spent in London building.

Okay. And, sir, in the initial remark, during the call, you also mentioned that it's difficult to, you know, gauge the numbers for the RSE business in FY27. But, sir, would you like to give a color on how the washing machine business would be panning out in FY27, kind of growth what you are predicting or numbers you would like to put on for the FY27, particularly in the washing machine segment?

I'm not saying it is difficult. I'm just saying that uncertainties are high. So I don't want to actually comprehend, I don't want to actually make a guess on the numbers, but I think... The numbers in 27 for AC will be much better than the 26 financial year number, where the industry actually saw probably a slight decline in primary sales. So, 27 from that point of view will be much better, and we should probably continue to gain some market share. But difficult to put those numbers right now. We will be able to get to these numbers probably after first quarter because by that time, we will actually know how the situation is panned out in terms of sellout and what are the inventory levels, etc. That is one. Second thing is we have a good visibility and commitment from some of the clients with whom we are working in the washing machine. We grew 52% last year. This year also, we are expecting a very robust growth. Upwards of 30-35% is what we think we should be able to do in the washing machine, but specific numbers we will spell out after first quarter.

Okay, and to this last question, you know, the inventory that we are having right now at the, let's say, the end of the March month, what would be the roughly bifurcation of the raw material inventory within that and the final good inventory of that?

We had an inventory of close to 1,600 crores at the end of March quarter, out of which the AC business alone was having close to 1,300 crores of inventory, and the rest of the other businesses had about 300-odd crores total. In this 1,300 crore inventory, we had close to 450 crores of finished good inventory, and the rest was the raw material and semi-finished good inventory which we had. This inventory has meaningfully come down in April and May. And we are hoping that by June, the inventory levels will very much normalize for us, and we will be able to bring it significantly lower, significantly in the sense like more than 600-700 crores is what we are internally targeting on overall inventory level reduction by June.

600, 700 crores you mentioned about the RAC inventory or total overall inventory? Total inventory.

Total inventory should, which is 1,601 crores as of thing, should be less than 900 crores in our opinion by 2-9.

Okay, sir. Thank you so much. Thank you so much for the opportunity. Thank you.

Thank you. The next question is from the line of K.O. Rpandia from ICIC Prudential Life Insurance.

Please go ahead.

Mr. Kirur Pandya, please go ahead with the question. Your line is unmuted.

Right. So, thank you for the opportunity. Sir, on the RAC side, so you mentioned a couple of times that inventory has come down, system inventory has come down significantly. So, because of this primary, secondary mismatch, you think you would be lagging the industry growth, secondary industry growth rate, your primary sales would be, or you see, Basically, just to get a sense of how your growth would be against, say, secondary consumer growth in this season.

Well, we hope to be at least in line with the secondary sales volume growth of the industry in the financial year 27. And for us, April and May have been good months, and we hope that... If the summer continues in June, July, August also, we should see a decent volume from a very low base of last year. Last year, actually, if you see, for people like us, the sales actually became almost zero from June till October. Because in August, there was the announcement of GST rate cut, and then all of the purchase from the customers got postponed till October, and then the GST actually set in. So, we think that we should have a much better year in FY27 in comparison to FY26.

So, this holds true for quarter one as well, and I was referring to Q1 when I meant season, because then it would be more of stopping season from Q2 onwards. So, Q1, how should we think of your sales was an industry growth rate?

I think I cannot actually give you the number right now because June is still to happen. And, you know, in our industry, a lot of things change when the monsoon sets in. And till now, monsoon is not set in properly even in the southern area and north is still very, very hot. So, till now, I can tell you that we are probably doing good, and our numbers are great in comparison to last year, but June is still to happen. So, once we will see the June month, right now, plans are good, and if we are able to execute those plans fully, then we should see a good growth in the first quarter.

Understood, sir. And second question on... The new project's compression and drafts. So, what should we think of profitability in first year and when things not stabilize or volumes have, please say near peak utilization?

See, first year is not going to have a much high profitability because in the first year, you typically have a lot of startup costs and utilizations are typically low. But still, as Vishalji was telling you, in compressor, we think that we are going to be able to kind of stabilize the operation in the very first year of operations only. So we are targeting that in financial year 28, which is going to be the first full year of operations, because in FY27, we will just get probably a quarter or so. We are hoping to at least run the capacity at something like more than 70% capacity utilization. So, we think that compressor should be profitable in the first year itself. On coming onto the refrigerator, there the plans are good, and we have support from one of the anchor customers. And we think that we should be able to reach something like, in the very first year of operation, that is FY28, something like 50-55% capacity utilization we should hit in the very first year. And important thing to note there is that in southern markets, there are not many refrigerator facilities, actually. And the market remains good. And we are going to start with both cost-free as well as... The other kind of a refrigerator and also we may start side-by-side refrigerators also in that plant immediately. So from that point of view, the product range as well as the customer support, we are very hopeful that... First year, we will not be having losses for sure in the refrigerator. I don't know how the profitability will pan out, but in compressor, we are very hopeful that first year itself, we should be paying some profitability.

Understood, sir. So, just last question. So, you highlighted that you aim to maintain gross profit per unit in RAC this year at the normalized levels. So, with industry growth and you gaining market share, EBITDA per unit should be higher. We should see increase in that number per unit in rupee terms.

So, for sure, internal targets are to basically restore the EBITDA per AC to original figures, which was there in 24-25 numbers. But a lot will actually depend on how the industry pans out, but we are hopeful that if the industry does not have the supply-side challenges and does not have the pressures of inventory like last year. Profitability should get restored, maybe, in the second half this year.

Pramodji, there is one thing which we need to factor in. See, next year is the last year of the PLI targets achievement for all the fans, you know. And there is a lot of, you know, desperation with certain people, you know, why? Because they want to, they are not able to achieve their PLI targets. So that puts us... Also, some pressure on us. Just be very conscious about this fact also, sir, please.

Yes, this is something which I missed out and rightly pointed out by Vishalji. The industry dynamics are going to be important to see because this is the last year for PLI. And targets are quite steep for everyone this year from a point of view. So let us see how things pan out and what the volume growth happens, how the volume growth happens for the industry.

Understood, sir. Thanks a lot. All the best. We'll cut back in the week. Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. With that, I now hand the conference over to management for closing comments.

Thank you everyone for attending this call. As you know, FY27 has been a very tough year, but let me tell you, I can assure all our investors that at a company level, at a management level, everyone is trying to come back, you know, strongly, and we are quite hopeful that FY27 will be a very different story from FY27. And in case you have any specific questions, you can get back to Pramodji, our CFO, or in case you want to plan a visit to our clients, you can talk to Shaleen. Shaleen can organize the visits also to the clients. Thank you, everyone. Thank you. Thank you.

Ladies and gentlemen, on behalf of JM Financial Institutional Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.