Inflame Appliances

Inflame Appliances
The company is engaged in the manufacturing of glass gas stove/cooktops; hobs; and chimneys.

They are selling these under their own brand, Inflame, in the domestic and overseas markets. Within India, they cater to 18 states. Inflame has a network of 40+ distributors across India. In FY21, exports sales were around 1 Cr (out of total sales of 20 Cr). The major market in exports is African countries. But the prime focus of the management is domestic market rather than exports for the next 5 years.

They are also doing contract manufacturing of glass top LPG stove in 2/3/4 burners in premium ranges for brands such as Hindware and Avaante. (It is worth noting that Inflame is not exactly a contract manufacturer- Inflame designs the products itself and then presents these to the OEMs. However, since I do not know of the specific term used when a company does this, I have used the term contract manufacturing throughout this writeup.) They have been manufacturing different models of gas stoves for Hindware for about 4 years and currently contribute to over 80% of Hindware’s total demand:

They are also into contract manufacturing of chimneys within the country, which will cater to the requirements of other big brands. Clients in contract manufacturing of chimneys are Hindware, Sunflame etc. Seems like clients are very happy with Inflame’s quality. Inflame is the exclusive manufacturer of electrical chimneys, hobs and gas stoves for AKAI India. They are also in the pool of suppliers for chimneys for BSH Home Appliances (Bosch Siemens Home Appliances). The company can probably gain a higher wallet share of clients as well as do contract manufacturing for them in other products e.g. they extended the partnership with Hindware, where they were doing contract manufacturing of glass top LPG stove to now also start doing chimneys manufacturing.

They have recently been adding many clients like Wonderchef, Kaff Appliances (10,000 units of chimneys) etc:

Just to clarify here- in stoves they are doing both, own brand and contract; but in chimneys they are only doing contract manufacturing. In chimneys, no company does production of more than 3 lakh units per annum. By doing contract manufacturing rather than their own brands in chimneys, they do not have such a ceiling on the sales and they are not restricting their potential market share in the competitive, fragmented market (they can do contract manufacturing for all brands).

It is interesting to note that these companies currently import all the chimneys from the overseas market. This way, it is also a play on import substitution:


Not only are they acting as import substitution for clients, but they themselves are also substituting with domestic suppliers for the components they are importing.

They have done massive reduction in import dependence from China, from 50-60% to 2-3%:


They are expanding their product range and have started manufacturing electrical chimneys, glass cooktops, glass hobs and cooking ranges to increase presence in the cooking appliances market of the country.

The latest currently installed capacity in units per month is 10,000 for Stoves; 5,000 for Hobs; and 20,000 to 22,000 for Cooker Hoods (Chimneys). Average realisations in chimneys are in the range of Rs 4000 to Rs 4500 per unit; for hobs it is Rs 5500 to Rs 5700 per unit; for gas stoves it is Rs 1600 to Rs 1700 per unit. Using the lower bound for each, monthly revenue at peak utilisation for stoves can be Rs 1.6 Cr; for hobs can be Rs 2.7 Cr; for chimneys can be Rs 8 Cr. Total monthly revenue can be 12.3 Cr (1.6+2.7+8). Hence annual revenue from existing capacities can be Rs 147 Cr. TTM sales are Rs 28 Cr. Latest utilisation was 50% each for gas stoves and chimneys; and around 15% for hobs. They are expecting to reach peak utilisation between March and June 2022. Management has said that at peak utilisation of current existing capacities, EBITDA margins can be 18-25%.

They are already under the process to scale up the current production capacities via large capex:

They are planning to set up a new plant in Hyderabad with installed capacity in units per month is 10,000 for Stoves; 5,000 for Hobs; and 20,000 to 22,000 for Cooker Hoods (Chimneys), i.e., capacity will double post Hyderabad plant:

The reason they have chosen Hyderabad is because of various subsidies offered by the state government:

They have also got 2 acres of land for new capex at a subsidized price:

They are expecting this to be completed within next 6 months:

Seems clear that chimneys would be a big driver of growth going forward.

The key raw materials for the company are various types of Brass Burner, Brass gas Valve, MS Pipe and Aluminium Mixing Tube, Toughened Glass, Pan Support Rings and Various Rubber Components. They are backwards integrated into the making of sheet metal components for captive consumption. Also, they are increasing/extending backward integration and a modern glass toughening plant is being added to cater to the requirements of toughened glass for use in glass cooktops and cooker hoods:

There has been raw material price inflation but they are able to pass on this in the form of price hikes with a lag of 30 to 50 days. More than RM prices, the bigger challenge is around RM availability and backward integration is expected to help overcome this.

They are working on multiple new product launches and they are looking to increase their presence in the cooking appliances market. One such product which they expect to launch in near future is dishwashers (where they expect to price at around Rs 18000 to Rs 22000 per unit). Another potential product they have identified is OTG- oven toaster grillers. Management has clearly explained that the new products will be only those which are import substitutes. These could potentially accelerate revenue growth.

During the recent years, the Company had bought 12175 sq. meters of land on NH73, near Panchkula, Haryana for setting up a new facility where approximately 4500 sq. meters (around 45000 sq. feet) of facilities are already constructed. Another 18000 sq. feet is under construction. The Company shifted all its operations from an earlier facility at Baddi, Himachal Pradesh to this new facility in a phased manner during FY21.

On the corporate governance side (positive), there is an unsecured loan of 5.13 Cr taken by the company from Mr Aditya Kaushik (CMD) and 1.76 Cr from Mr Ashwani Goel (Whole-Time Director)

Importantly, these are interest-free:

As of FY21, total long-term borrowings were 8.9 Cr and out of that 6.88 is unsecured, interest-free from directors.

They recently did preferential issue and some portion of the capital raised was used in debt reduction.

I heard that in the last few years the management even went to Turkey and China to learn the art of the trade. In their investor meeting, the management shared their vision of gaining 35-40% market share by 2026. Their present market share is around 5%. They aspire to produce 1 lakh units of chimneys per month. This would mean Rs 40 Cr monthly revenue from chimneys alone. They have given a guidance for 50 to 70% CAGR in revenue over next 5 to 7 years.

There have been some big changes since the publishing of FY21 AR to now. AR mentioned this production capacity:

However, they have discontinued metal cooktops completely and scaled up chimneys massively. The latest currently installed capacity in units per month is 10,000 for Stoves (same as glass cooktops); 5,000 for Hobs; and 20,000 to 22,000 for Cooker Hoods (Chimneys).

Also, earlier, under Pradhan Mantri Ujjwala Yojana, the company had marketing agreements with Oil Marketing Companies (HPCL, BPCL and IOCL) to market, sell, distribute and promote LPG Stoves to domestic consumers using their distribution channel. However, they have now discontinued this.

The major risks are intense competition and high debt. One key disconfirming evidence is that for gas stoves they only have 1 customer, hence there is big customer concentration risk. They are planning to add 2-3 more customers for gas stoves soon.

I personally think this is one scenario where it is more about management and narrative. If we just look at RoCE, P&L, margins we will get a false picture because it is currently making losses. Because of the accumulated losses, reserves (hence book value) are very low hence price to book looks very high and debt to equity looks very high. There is no P/E since it is making losses.

The company’s recent investor meeting is available at Passcode Required - Zoom and the passcode is 5Y^.fLq6 (note- this is given on company website IR page and hence is in public domain)

Disclosure: I have a tracking position


Thanks and good detailing. One good part is they are Contract manufacturer for several brands. Just take case of Dixon. However, need to know more why are they unable to generate cash flow still? One reason could be asset heavy business model, where initial few years they keep investing and expanding, as demand is rising. Are they overspending on sales network or distribution network etc? Their overall supply chain needs to be optimized to reduce operational expenses to get operating profit at least. Another aspect is their pricing power/monopoly or pricing strategy to connect more clients initially. Hence as you rightly said, from numbers I saw, its tough to make out any prediction. Good to track.


From what I understand, it is because of low capacity utilisation. Once utilisation reaches 80-90% there could potentially be a big operating leverage coming in.

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Their main competition is from China. Won’t it be ideal if we see the import data for their Products and see the trend in volumes?

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Just started research on this, was really interested in them. Then i got to know their credit rating is issuer not coorperating.
As they are new , yet they being aggressive. Somehow i am not feeling it good. how can everything is easy for them

Big breakout today on the price front. Trade volume data shows high delivery percentage. Is this real or the hanky panky of operators is very difficult to know (at least for me). As @gaurav_vimal Gaurav_vimal mentioned, the report from credit rating agency on “company not cooperating” is a dampener.

Company only publishes results twice a year. I think this might be true for most micro caps. Might take a small tracking position to learn more about micro cap investing, purely for learning ropes. No recommendations - investing in such companies is extremely risky!!!

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5th AGM link and summary notes (conducted on 31st Aug 2022)

Currently, main focus of the company is to grow chimney volumes; Household chimneys are expected to grow in excess of 15% per annum. Chinese imports continue as market is large and growing. Indian market size for Chimney is 2.2 mn per annum. Market opportunity is large - targets to capture over 30% market share in the next 5 years. Current company’ market share is 5%

Currently 2 clients account for 60 to 80% of topline ie Hindware and Sunflame. Company intends to diversify its client profile with growing volumes.

Sharp growth in volumes expected in FY23: Immediate goal is to achieve over 2 lakh units of chimneys (ie 18 to 20k per month) from both plants ie Panchkula and Hyderabad (current output was less than 1 lakh units). Post achieving 2 lakh units, then will consider introducing other products.

Plan to set up plants in other locations in the country, given that chimneys are bulky products and logistic costs are high

Company believes that as scale increases, and RM cost will reduce and EBITDA margins can improve

Cash flow has improved due to bill discounting of receivables, but reflected in Rs 1.3 cr of finance cost of Rs 1.3 cr


I did some rough calculations as per AGM-

→ Current Chimney market size in india is 22L…growing @ 15% CAGR…so Chimney market in india will be 40L by FY26
→ Inflame trying to capture 30% market share…i.e. yearly chimney production by FY26 by inflame will be 12L…i.e. 1L/month
→ Current monthly rate is 15k/month…so 6-7X scope in 4 years
This is just Chimney… Other products or any new product launch will be adding some revenue as well


I read Annual Reports from 2018 and found some red flags
Just wanted to mention over here

In AR 2018 : Capacities
Chimney : 20,000/ month
Glass Hobs: 10,000/month
Cooking Ranges : 2000/month

In AR 2019 : They mentioned they have added 15000 per month of production capacity for Electric Chimneys, 5000 numbers per month of production capacity for Hobs and 1000 units per month production capacity for cooking range

And they gave the following guidance: " Within a month of completion of production capacity expansion, your company is able to achieve production of 2500 Pieces per month of Electrical Chimneys and expect to achieve approx 10000 pieces per month by second half of current financial year."

In AR 2021:

They gave capacities in below format

  • Metal Cooktops: 70,000 per month (Installed capacity: 100,000)
  • Glass Cooktops: 8,000 per month (Installed capacity: 12,000)
  • Built-in Hobs: 2,000 per month (Installed capacity: 4,000)
  • Cooker Hoods (Chimneys): 1,000 per month (Installed capacity: 1,500)

The thing to note here is the Chimney Capacity which in 2018 was 20,000/month and now shown here as 1500/month

In 2022 AR :
They are guiding for 20-25k/month chimney after expansion
But what happened to expansion done in 2019 and the guidance given ?

In Nov 2021 Presentation they are guiding for 40-45k Chimney/month after expansion

Basically they didn’t mention the expansion plans in their latest annual report.

One more thing I found on DRHP related to CEO & CFO Amit Kaushik under Risk Section was
“One of our Promoter cum CEO cum CFO Mr. Amit Kaushik has defaulted as director by Registrar of Companies If the authorities impose monetary and other penalties on promoter or take certain punitive actions against promoter in relation to the same, our business, financial condition and results of operations may be affected”

And Company’s MD Aditya Kaushik is only Metric pass.


Found two good sources for research on the company

  1. Announcements | Kitchen appliances manufacturer, gas stove manufacturers
    The company has a Zoom video recording of investor call from November-2021 on their website


Zoom link: Passcode Required - Zoom

Password: Access Passcode: 5Y^.fLq6

  1. Twitter thread by Prashant Mishra chronicling the public events

Twitter thread:

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Summarizing the analysis and questions from the above links:


  • 2016: Company used to produce and sell under PMUY (Pradhan Mantri Ujjawala Yojna)
    • Used to have marketing agreements with OMCs - HPCL/BPCL/IOCL
    • Discontinued this business
  • Management
    • Amit Kaushik - Promoter & CEO
    • 2017: Converted Partnership to Private Limited Company


  • Stoves/Class Cooktops = 20,000 per month
  • Built-in hobs = 10,000 per month
  • Chimneys/hoods = 20,000 per month (Panchkula)
    • Company seems to be scaling this massively
    • Have created 30-35 models in Panchkula R&D facility
    • Nov’21 = Doing 10,000 per month
    • Target was to do 17-18,000 per month by March 2022
      • Press release (Oct 2022: Did ~18,000 units in Sep)

Chimney = 80% of revenue

  • Chimneys - market sizing

    • Market Size is ~20 lacs chimneys
      • Market is growing at 15-20%
      • 2025: Market size should be 3-3.5 mn
      • What is market share of various brands?
      • CEO: “None of the brands are doing more than 20k/month i.e. 2.5 lacs per years.” Implies market share of ~12-15% for top brands i.e. fragmented end market - good for business economics
    • India imports ~16 lac chimneys and hobs (~80% is imported, largely from China)
    • 15-20% is the transportation cost from China which can be saved - since it is a bulky product
      • Can PLI come in?
      • Can import duty be applied in future?
  • Realization of Chimney

    • ASP range = 2,800 - 6,000
    • There are 3 more manufactures - all of them are brands
    • Inflame will work under ODM model
  • Immediate Capacity Expansion by 2x

    • Going to total 40-45,000 / month
    • 2nd plant in Hyderabad = 20-22,000 / month
      • Govt. is offering big subsidies: Interest subsidy, power subsidy, part GST subsidy; Will recover capex in 3-3.5 years
      • Hindware and Click are two major buyer from Hyderabad plants
      • Have assurance of demand
    • Scaling up is a challenge, demand is not a challenge
    • Want to be selling 40-45k per month by Dec-2023
    • ASP = 4,500
    • Would imply ~200-225 crores annual revenue run rate for Chimney Segment
    • 1st plant is in Panchkula = 20-22,000 / month
      • 100% CU in March’2022

^ This was management’s aspiration in Nov-2021. However, it seems CU was below expectation. Need to understand why.

  • Dec’22: Target to have 10-12% market share
  • Future Expansion
    • Will set up 2 more plants
    • One to cater to exports, near a port - likely in Gujarat
    • One to cater to East India markets
    • Given the voluminous nature of products, geo footprint is important
    • This will also act as temporary competitive advantage against newer players
  • EBITDA Margins
    • Can be 18-25%
    • CEO said can be “even higher”
    • This is a tricky assumption!!
    • Found this statement from management to be the most questionable. Can anyone share thoughts on what could be a more reasonable assumption?
    • Historical GM has been ~27% - although the business is rapidly evolving
  • Issues in scaling up
    • Glass is not available, Galvanized sheets are not available
    • Skilled manpower
  • Customers = Wonderchef, Hindware are key customers; others = Kaff, Prestige (?), Sunflame
    • Demonstrates product quality level has become acceptable
    • Inflame will not have a brand in Chimneys
    • Trial order from Inalsa, Flipkart, Green Line Appliance - March 2022
    • Trial order from Stovekraft - April 2022
    • ~45,000 units order from Hindware (not clarified the product mix)
  • Backward integration
    • Eliminated dependency on China
    • Improved noise levels + suction power vs China products
    • Doing Chimney Glass production
  • Company aspire to produce 100,000 chimneys per month (12 lac per year)! - by when?
    • This would mean 12 lacs/year
    • Whats the implied market share ?
  • At ASP of 4,000 this means 40 crores/month from Chimney
  • Key Brands on Amazon
    • Elica (Whirlpool owns 90% stake, rest with Italian parent); FY21 sales 310 crores, growing at 15-20% CAGR
    • Hindware - Anchor customer for Inflame
    • Inalsa
  • Distribution Network
    • Company set up in states of Maharashtra, Gujarat, West Bengal, UP, Punjab, Haryana
    • Want to expand network to Pan-India
    • It is unusual for OEM/ODM companies to set up own distribution. Does anyone understand the rationale for this?

RM = buy steel from Jindal, Glass from Saint Gobain. 95% of RM is domestically sourced (earlier it was 50% domestically)

Will take another 2-years to establish strong credentials

Long Term target
2025: Revenue growth of 50-70% CAGR
EBITDA margins of 18-25%
These are lofty numbers and we shouldn’t pay too much emphasis to such targets. Need to closely monitor the execution of Hyderabad plant and CU over the next 6-9 months.


They have also increased their production capacity upto 1000 units per day in september. And now, Inflame appliances are being traded at approx. Rs 451.85 per share that is lower by 2.88% on BSE.


Good time to up this.

Promoters are infusing 18.4crs into the co via issuing convertible warrants. Post conversion, the stake will go up by 3% from 43% to 46%.

Q1FY24 results should be interesting.



Why they are infusing 18cr and how they will fund this 18 Cr infusion? Salary they are drawing is around 57Lacs for both directors. 18Cr is huge amount in respect of salary they are drawing.

In balance sheet they have fixed asset of 13 Cr. Only. At around 50% utilisation, they are have an asset turn of 6X. Anyone has information about asset turn on full utilisation?


only 4cr is coming. Rest is later on exercise

The director of the company is continuously selling.


Any big news in the company? Buying has increased and its in UC from 2 days.

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Positive development:
Inflame and KAFF have entered into an exclusive agreement for a period of 3 years which would allow Inflame Appliances to do the following for KAFF India:

  1. Manufacture hobs and chimneys per KAFF’s exclusive designs.
  2. Inflame will assemble/manufacture wine coolers, built-in refrigerators and built-in ovens for KAFF on an exclusive basis.

In their May PPT they guided for a 50% Cagr but their last half yearly result is v bad both topline and bottom-line wise. Meaning they are not walking the talk.