IFB Industries – Can it Deliver!

@ Vivek)- The home appliances plant is in GOA and not Kolkatta. The home appliances contribute >80% of the revenues, therefore if there are any probs in the Kolkatta plant then I think it will not impact IFB much. Also they could increase the production in Bangalore plant to compensate for any closures in Kolkatta plant (assuming that Bangalore plant would have the capacity to absorb this).

Also, I think that Whirlpool is turning around and they have also taken various cost rationalisation initiatives.

There were multiple reasons 'coz of which Whirlpool and the industry was not doing good.

For e.g.

Whirlpool’s 75% of raw material costs were linked to Dollar and as a result of Rupee depreciation margins took a beating. (This applies to other players as well, although the ratio may be different). But these players have started indigenization of there products to mitigate Forex risks. Add to that the stable/appreciating Rupee which would again be beneficial for these companies.

Demand had gone down in the industry and was flat since last 3 yrs. (But Sales have shown a marginal uptick from April onwards and consumer sentiment seems to be improving or will start improving in the near term).

Increase in excise duty and service tax coupled with rupee depreciation and rising freight costs etc.,. resulted in price rises which also had its impact on the demand.

The decrease in interest rates (whenever it happens) would also be beneficial for the demand due to lower consumer financing rates.

@ Soujanya Raj)- IFB website is pretty pretty for sure :slight_smile: Also, one can open the front lid/door of the washing machine and take the clothes out incase of power failure too :slight_smile: But it can be done with a time lag of 3-5 mins (I have been using and IFB front load since last 5 years, hence I can confirm this).

You are right that after sales service can be an issue. I have heard this too (Although luckily enough I have personally never experienced any after sales issue and have received prompt service). But a competitor’s employee from the marketing dept. told me that after sales service is an issue with all the manufacturers and hence people prefer IFB 'coz of the Brand as they think that after sales service is not a differentiator as of now.

@ Surinder )- Your view point is valid and I agree with it too to a certain extent and that’s why I have a low allocation towards IFB in my portfolio (one more reason for low allocation is that I think there are better opportunities as well in relative terms where I have more conviction) :slight_smile: I am also new to the world of investing and learning and hence may not have all the answers to your concerns but will still try to answer them later so that there are contradictory view points which can lead to constructive discussion.

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