Thank you, Rutuja. Good afternoon, everyone.

On behalf of JM Financial Institutional Securities, I welcome you all to the Q4 FY26 earnings call of PG Electroplast Limited. We have with us the management of the company represented by Mr.

Vishal Gupta, Managing Director Finance, and Mr. Pramod Gupta, Chief Financial Officer.

With this, I will hand over the call to the management for their opening remarks, post which we can open the floor for question-and-answers. Thank you, and over to you, Mr.

Gupta.

Thank you, Shalin, and good afternoon, everyone. Thank you for joining with us for PG Electroplast Q4 and full year FY26 earnings call.

I am Vishal Gupta, Managing Director, and today I'm joined on this call with Mr. Pramod Gupta, our Chief Financial Officer.

Before we get into the numbers, let me set 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 conviction 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 FY26.

This was against a backdrop where just 12 months ago, when we and the rest of the industry were guiding for strong double-digit growth. Three demand-side shocks were largely responsible for this de-growth.

First, Q1 was derailed 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 BEE rating transition led to a preponement of production and sales in month of December 2025, resulting in less offtake 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. 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 faced unforeseen and large cost inflation. Commodity prices—copper, aluminum, plastics, and key components—rose sharply.

Most significantly, the Indian rupee depreciated approximately 20% against the US dollar on a YoY basis, substantially inflating our import costs. Since December '25 till April '26, the industry implemented cumulative price hikes of around 10% to 15%, but with weak 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 manpower 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 diesel shortage in the second half of the March. Pramod ji?

Yes. I will now walk you through the Q4 numbers in detail.

As you can see, consolidated revenues for the quarter were ₹1,717 crore and a decline of 10.4% about 10.4% YoY while 10.1% YoY. EBITDA came in at ₹131.54 crore compared to ₹231.72 crore last year, which was a decline of 43%.

Net profit for the quarter was ₹64.2 crore versus ₹146.39 crore 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 crore due to the LPG crisis.

The truck shortage, which resulted in an estimated sales loss of close to ₹120 crore for the quarter, as finished goods were stranded at our plant and dispatch were deferred into April. Together, these two items alone accounted for an aggregate revenue loss of approximately ₹420 crore in the quarter.

On a base of ₹1,717 crore, had these sales happened, we would have actually crossed ₹2,100 crore 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 crore versus a forex gain of about ₹17.99 crore in FY25. Even for the quarter, we had a forex loss of about ₹25.82 crore versus a gain of ₹12.77 crore last year same quarter.

In aggregate, these combined factors resulted in an estimated PBT impact of approximately ₹120 crore for the quarter. We continued to incur most of our fixed and operating cost, even as the production was impaired in the month of March.

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 crore, which is 82.5% of the quarterly revenue.

Within that, room AC revenue declined 12% YoY to ₹1,210 crore, that is ₹1,210 crore. 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 a even full-year basis, there was a decline of 8.2% in the cooler business.

Goodworth Electronics, our JV entity, reported revenues of ₹155.1 crore in Q4 versus ₹107.6 crore in the same quarter last year. EBITDA improved to ₹6.19 crore during the quarter from ₹0.94 crore last year same quarter.

Full-year consolidated revenues are ₹5,288 crore versus ₹4,869 crore same in the last financial year. EBITDA stood at ₹441.76 crore versus ₹519.16 crore, and profit after tax stood at ₹193.61 crore versus ₹290.92 crore last year.

The profitability decline reflects the margin compression from input cost inflation, operating leverage working negatively from lower production volumes, and elevated finance costs from higher working capital intensity and the Q4 disruptions. 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 Indian 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. We carried the higher inventory through the Q4.

That also delayed the collections because some of our customers were also seeing huge inventory at their end, and receivable cycle was stretched, leading to higher borrowing utilization, and therefore, the higher interest cost resulted. This year, things are likely to change significantly as we see things normalizing.

Now let me hand back to Vishal ji to cover what we are building through the cycle.

Yeah. Thank you, Pramod ji.

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 City in South India, which is progressing well.

We plan to start commercial production by quarter four 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 now also establishing a rotary compressor manufacturing facility at our Supa plant. Machinery has been ordered.

Installation is planned to begin in August 2026, and operations are expected to commence by quarter four of FY27. 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. Compressor manufacturing will significantly deepen our backward 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 FY26, and we look forward to again growing this business in a very meaningful manner in this financial year. We are consolidating some of our molding facilities at Salarpur, Rajasthan, which will help us in enhancing our operational performance, space utilization, eliminating warehouse leases, and allowing us to build better economies of scale.

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 extending our cost leadership, which is a very core competitive moat 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 FY26.

April and May have shown better sell-out momentum compared to the same period last year. This will help us in controlling our inventory in a very big way.

The El Niño weather pattern is forecast 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-efficient models are structural demand drivers.

The outsourcing trend in India's consumer durables manufacturing is a structural, long-term shift. Brands are rationalizing their own manufacturing, focusing on design, branding, and distribution.

They are relying on partners like us for cost-efficient production. For FY27, we are targeting better-than-industry revenue growth.

We expect EBITDA margins to improve towards 8% as operating leverage returns, input cost pressures moderate, and our cost discipline initiatives take effect. Working capital intensity is expected to improve significantly as inventory and the receivable cycles improve.

We expect to improve operating and free cash flow generation in FY27. 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 FY27 leaner, better organized, with normalized channel inventory, new capacity and capabilities coming online, and stronger customer relationships.

The quarters ahead will reflect that. Thank you, everyone.

Now we will open the floor to the questions, please.

Good afternoon, sir. Thanks for the opportunity.

Am I audible?

Yes, Rachesh, you are audible.

Yeah. Thank you for the opportunity.

The first question I have, if you could talk a little bit about the gross margin contraction in bit more granular manner. The question I have is, we had a large inventory, as you pointed out in the initial remarks, throughout the year.

Ideally, given the copper price inflation in December and January, with our inventories, we should have benefited. If you could talk a little bit about this pricing part of it and has that normalized in the April and May month?

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 crore versus last year same quarter at ₹516 crore. This actually took care of our low-cost inventory of raw material.

We had a good commitment from the customers for January, February, March, and therefore, we restocked the inventory of raw material for the March quarter. 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 6 lakh, 6.5 lakh AC material, out of which almost 4.8 lakh kind of a number we actually did in the quarter ending December. The cheaper inventory that we were left with was very little in the January, February, March month.

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 rupee depreciation, fully.

It hit the margins in the January, February, March quarter to us, 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 costs 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.

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.

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.

Whatever price increase we have taken probably has been good till maybe April and May. If 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. See,

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.

Normally, whatever price arrangements you have with the customers, they are based on the current dollar exchange rate. Normally, the payments happen a month or two months later from the current supplies.

What will be the exchange rate in month or two months later, that is one big joker in the pack, okay?

Understood. 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, right? 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. Coming back to one more data point I want to highlight, that a lot of the forex exchange loss happened because most of the liabilities, which is the unhedged liabilities on account of open LCs or some of the OA payments which were due later on in the quarter, maybe in the April or May, 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.

Those also actually led to a forex hit. Some of it we actually covered when the rupee came down to something like 93 rupees, almost about $15 million to $20 million of hedging we did, and some of the payments of those liabilities has been made at those payments.

Again, the rupee has further moved to around 95.5. Those are the kind of things which are leading to the forex losses this year.

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 the industry overall manufacturing FY26 should be anything between 13 to 14 million, and I think we are operating around 12 to around 13% to 14% of the total India's market.

Got it. Thank you.

I'll fall back in the queue for more questions. Thank you.

Yeah.

Hi, sir. Good afternoon and thank you for the opportunity.

Sir, my first question is on, how the quarter is going on or rather the ongoing season, given that, almost three weeks of April were muted and we just saw pick up post that for secondary in the end of April. Given that we also begin the year with higher inventories because of you know the challenges which 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 FY27 perspective? See,

overall, April has been a decent month. May is also looking to be a decent month.

I will not risk taking any such long-term forecast. What last year we have already suffered on that because this business is so dynamic and so much weather-dependent, and nobody knows what is going to be the weather.

These are all forecasts what we have. It looks see, overall channel inventory has normalized because the April, May, the sell-out has been very good.

As of today, channel is sitting at a very normal inventory. 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 season 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 say mid-May also. Even in the May month, whatever feedback we have got from most of the brands, the sell-out has been much higher than last year.

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 cylinders being priced very high, the temporary labor has gone back to their home.

All those kind of issues have actually also hit the production. 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.

Sir, and 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.

From whatever feedback we are getting from the sales channel, the sell-out this year has been much stronger. That is what we have learned till now.

Sure, sir. Understood.

Sir, my second question is, the margin impact which we've seen on a YoY basis, right, on the gross margin especially, almost a 260 bps impact. 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 we had 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?

I'll tell you we would have also taken a price increase of anywhere between 10% to 12% till now from the last year basis on a overall numbers. As Vishal ji was explaining, there's a rupee which has depreciated very sharply, and some of those payments are made generally slightly later, those things have not got priced in till now yet.

That is one. Second thing is there, which is important is that now the whole value chain has been under stress last year.

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. 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 is likely to be on the range of historical averages.

That is what we foresee for ourselves in the coming year.

Understood, sir. Sir, for this year, the PLI remains at ₹37.5 crore?

Yes, yeah.

Understood. And ₹50 crore 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.

Sir, I think that will be ₹71 crore, Pramod ji, because we will have NGM PLI also kicking in.

Yeah.

Yes.

Yeah.

Total amount will be ₹71 crore.

₹71 crore for FY20 It is

the amount

which we receive. Yeah.

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

Okay.

Okay. Just one last question if I can squeeze in, on the compressor bit, right?

We spoke about putting up the machinery, etc., in this year. Sir, but we're yet awaiting the approval, 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 as such. There is no JV in this.

Understood.

Understood. Got that, sir.

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

Thank you.

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 FY27, how you 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 an investor, we'll assume that management has to have some sense of what kind of demand they can expect. I understand that weather can play a spoilsport, but we know that at least see, a bulk of the season is through because we are sitting in May, and June is perhaps the last big month of the season.

We will start planning for next year now practically or next season. I was actually wondering that how should one, if one were to model any kind of revenues from this AC business for FY27, how should one go?

Hello?

Yeah.

Hello? I think we lost you in middle, Jitendra ji.

Can you hear me now?

It's better. Please.

Yeah.

Basically, I think I got your question, Jitendra. See, we do modeling.

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 inventory overhang on the whole industry, which won't be there. As we have already said in our commentary that we will see a better offtake in next few months, which might be off-peak months also.

Then, once we enter the season with a normalized inventory, see, last year was a low base, we should see a decent growth in this. We don't want to take any risk of giving any numbers as of now.

As Pramod ji has said, first quarter is done, and then by July end, we'll have a fair idea how the industry is 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 we not know the weather next season, right?

No, no, no, no. Definitely, sir.

See, that is right. We'll start preparing for the next year's season, and typically, till March, which is FY27 last date, by up to March, it's a roll of a dice.

It's all primary selling, manufacturing, and channel filling. That should remain strong going into by end of FY27 because by June, July, August, we should be at a very normal inventory at a industry level.

I see it is there. We have our internal plans available with us, but I don't think we are in a position to share those plans 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.

Let's say as investors, with FY27, I'm looking at your gross profits 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 hike?

As I told sir, see, commodity price increases are largely taken into account from our customers as of today, but exchange rate is one thing which is really, you can't put any finger to that number right now. 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, then it becomes a pretty big problem for us, which has been there for FY26. As you said, largely our PBT numbers should move in line with our sales top-line growth.

It should move in line provided we don't see a very big change in the rupee exchange rates. Theek hai, today we are sitting in maybe 94, 95.5 something.

It can go up to 97. This is what we factored in.

It goes beyond that, then it becomes a problem for everyone.

That is understood, sir. Coming back to this, the fact is that in FY25, we reported a PAT of around ₹278-odd crore, then this year it was much lower than that.

When do you expect to cross the FY27 FY25 PAT?

If the normal situation is there, then yes, we very much hope that we should be able to cross that PAT. See, situation is very dynamic still.

There are many things which are not yet known. The one is obviously this situation in the Middle East and then this El Niño, 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.

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. Then we can probably give you some better color on that.

We are very hopeful that if situation normalizes sometime this year, then we should be able to at least we can probably cross the profit which we delivered in 2025.

Thank you.

Hi, sir. Good morning.

Just quickly from the compressor side, given that now we are going on our own in terms of setting up the capacity, just wanted to double check. We are not tying up with the Chinese partner which we did before?

Secondly, we have the required technical expertise for the manufacturing of this compressor. Both the standing is correct, right?

Yes, sir. We are going on our own.

We are setting up this facility, and we have acquired those capabilities, which will help us in offering a cost-competitive and efficient, high-performing compressors to our customers in India.

Sure, sir. Just to follow up on this, sir.

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

Sir, once the commercial production will start, we'll update you on that. As of today, this information is enough that we are setting a compressor manufacturing facility, and we see no challenge in the acceptance of the compressors, which will be made by us, by our customers.

The tie-up is already in place, as I have said in my commentary.

Sure, sir. Sir, lastly, in the entire compressor, what percentage of value add we'll be doing in the entire bill of material for compressor?

Around 60% of that will be localized, and around 40% we need to import.

Sure, sir. Thanks a lot.

Thank you.

Thank you.

Yeah. Hi.

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 FY26 was around 1.75 million sets, okay? Normally we make some extra IDUs for some customers who take IDUs extra, which should be around 250 to 300k for the whole year.

So 1.75 and 2 million very broadly. No, no,

no, 200k. 200,000.

Yeah,

200,000. The average utilization for the year was?

The average utilization is something, it's very difficult to tell, but it should be something See, our overall yearly, if you talk about annual capacity of AC manufacturing is around as of today, I can say it's easily around 4.5 million, 5 million. Average utilization is normally in AC business is around 50%, sir.

45% to 50%.

Sure. 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 PLI 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.

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. In terms of for the financial year FY26, in terms of top three or top five, however you would want to call out, was there any change in terms of the top three or five clients, While the year was challenging, but for specific brands where the challenge was far higher than others, something on those lines if you can comment.

See, overall, there was no such specific behavior from any of the client, and largely top three, top five clients are in the same ratio as of today also. It was a general industry-wide, very secular behavior what we have experienced in FY26, sir.

Okay.

Okay. Last question from my side, and slightly a bit premature, but in terms of compressors, once the stabilization of the plant happened, which could be maybe 12, 18, 24 months from now, whatever timeframe will be required, in the initial cost analysis what you would have done, how competitive would you 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 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 setbacks.

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. I will tell you, sir, we are expecting that we will be able to hit our capacity numbers in FY28 only.

That is the target internally we have with us, and that is a kind of discussions we have already had with our customers also on this. Okay.

Okay. Sure.

Thank you so much and all the best for subsequent quarters. Thank you.

Thank you.

Yeah. Hi, sir.

Thank you for the opportunity. Sir, roughly we have spent almost ₹800 crore in a financial year FY26.

Can you ballpark just a broad-ranging each of the new initiatives that we have spent in this year and what kind of peak asset turns in each of the new initiative looks like?

Yeah. Out of the total ₹800 ₹785 crore that we have spent this year in the capex, almost close to ₹500 crore 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 Sri City for which land has been procured and construction is going on for the refrigerator.

That part of that money was spent on the land and some advances for the building has actually gone into that seven ₹500-odd crore amount of capex. Then we had a completion of the compressor building in NGM Supa, which was already about 12-acre campus, half of which was built, and half of which was completed last financial year, which is in '26.

The building was ready in early May, June itself. Some part was spent there on that.

Then we have actually this year also bought another 72-acre land in Kamargaon in Ahmednagar only, and all the payments for the land have been made, and some leveling, etc., has gone into that. Those things contributed to the land and building portion this year.

Apart from that, we spent close to ₹70 crore for the washing machine plant and machinery, almost close to ₹165 crore was spent in the RAC plant and machinery for expanding capacity, and the other businesses, which is molding and electronics, took about ₹35-odd crore for the increasing of the capacity. And ₹10 crore was the plant and machinery advance for the refrigerator business, which was done in the last financial year.

That is the break-up. Now coming to your asset turn business question, we are very hopeful that once all this capex are over, which should be happening this year, we will be probably be doing a capex of close to ₹400 crore this year.

We should be able to utilize these assets and get to a asset turn of 4x plus by 2029. Maybe this year and next year we'll see the ramp-ups of the facilities which we are building, and we will be able to get the 4x asset turn, which we typically have for us, from these new facilities also by end of 2029.

One more thing I want to highlight, we also actually bought a 8-acre campus in Salarpur where we are consolidating our plastic molding 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-odd crore which we have spent in land and building.

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

I'm not saying it is difficult. I'm just saying that uncertainties are high, I don't want to actually make a guess on the numbers, but I think the numbers in '27 for AC will be better and 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. 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 exactly know how the situation is panned out in terms of sell-out 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 washing machine, but specific numbers we will spell out after first quarter.

Okay. Sir, this last question, the inventory that we are having right now at, let's say, the end of the March month, what would be the roughly bifurcation of the raw material inventory in that and the finished good inventory of that?

We had a inventory of close to ₹1,600 crore at the end of March quarter, out of which the AC business alone was having close to ₹1,300 crore of inventory, and rest of the other businesses had about ₹300-odd crore totally. In this ₹1,300 crore inventory, we had close to ₹450 crore of finished good inventory, and 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 end, the inventory levels will very much normalize for us, and we will be able to bring it significantly lower. Significantly in the sense more than ₹600-₹700 crore is what we are internally targeting on an overall inventory level reduction by June.

₹600 to ₹700 crore, you mentioned about the RAC inventory or total overall inventory?

Total inventory. Total inventory, which is ₹1,601 crore as of thing, should be less than ₹900 crore in our opinion by June end.

Sir. Thank you so much for the opportunity.

Thank you.

Oh, sorry. Yeah.

Thank you for the opportunity. Sir, on the RAC side, you mentioned a couple of times that system inventory has come down significantly.

Because of this primary-secondary mismatch, you think you would be lagging the secondary industry growth rate, your primary sales would be, or you see basically just to get sense of how your growth would be against say secondary consumer growth in this season?

We hope to be at least in line with the secondary sales volume growth of the industry in the financial year '27. 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 volumes 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, with the announcement of GST rate cut, and then all of the purchase from the customers got postponed till October end, then the GST actually set in. We think that we should have a much better year in FY27 in comparison to FY26.

This holds true for quarter one as well? I was referring to Q1 when I meant season because then it would be more of stocking season from Q2 onwards.

Q1, how should we think of your sales versus industry growth rate?

I think I I cannot actually give you the number right now because June is still to happen, and, in our industry, lot of things change when the monsoon sets in, and till now monsoon has not set in properly even in the southern area, and North is still very, very hot. Till now, I can tell you that we are probably doing good, and we we our numbers are great in comparison to last year.

June is still to happen. 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. Second question on the new projects, compressor and ref.

What should we think of profitability in first year and when things will stabilize or volumes have reached 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 start-up costs, and utilizations are typically low. Still, as Vishal ji 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.

We are targeting that in financial year '28, which is going to be the first full year of operations because in FY27, we'll just get probably a quarter or so. We are hoping to at least run the capacity at something like more than 70% capacity utilization.

We think that compressor should be profitable in the first year itself. On coming on to the refrigerator, there the plans are good, and we have a 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.

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 frost-free as well as the other kind of a refrigerator, and also we may start side-by-side refrigerators also in that plant immediately. 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 seeing some profitability.

Understood, sir. Sir, just last question.

You highlighted that you aim to maintain gross profit per unit in RAC this year at the normalized levels. 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?

For sure, internal targets are to basically restore the EBITDA per AC to original figures, which was there in '24, '25 numbers. A lot will actually depend on how the industry pans out.

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 fully.

Pramod ji, there is one thing which we need to factor in. See, next year is the last year of the PLI target achievement for all the brands,

and

there is a lot of desperation with certain people, why? Because they are not able to achieve their PLI targets, so that puts us also some pressure on us.

Just be very conscious about this factor also, sir, please.

Yes, yeah. This is something which I missed out, and yeah, rightly pointed out by Vishal ji.

The industry dynamics are going to be important to see because this is the last year for PLI targets, and targets are quite steep for everyone this year from point of view, let us see how things pan out and how the volume growth happens for the industry.

Understood, sir. Thanks a lot.

All the best. We'll get back in.

Thank you.

Thank you, everyone, for attending this call. As FY26 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 strongly, and we are quite hopeful that FY27 will be a very different story from FY26.

In case you have any specific questions, you can get back to Pramod ji, our CFO, or in case you want to plan a visit to our plants, you can talk to Shalin. Shalin can organize the visits also to the plants.

Thank you, everyone.

Thank you.

Thank you, Rutuja.

Thank you.

Thank you.