IFB Industries

IFB - A Perfect Turnaround !

IFB Industries also know as known as Indian Fine Blanks Limited started its operations in India in 1974 in collaboration with Hienrich Schmid AG of Switzerland. IFB Industries Limited engages in the manufacture and sale of home appliances and fine blanking components primarily in India. Its home appliance products include washing machines, microwave ovens, domestic and commercial dish washers, dryers, kitchen appliances, and commercial laundry products. The company’s fine blanking components comprise cushion plates for seat recliners; tongue for seat belt assembly; door latches; gate assembly for gear transmission; gear shift selectors, gear shift interlocks, and gear shifters for transmission; rotor segments for aircrafts; plate valves for compressors; and face comp drives, gears, cam plate assemblies, and sprockets for two wheeler.

The Company which has its manufacturing facilities in Kolkata, Goa and Bangalore. Company drive its 85% of the revenue from home appliances and rest 15% comes from fine blanking components.The Company is continuously expanidng its capacity of fine blanking division in the past two years and will be doing so in the near future. The Company has a clientele list which includes Ford, Hyundai, Maruti, etc.

The reason behind this company being a perfect turnaround story because in 2001 the company was declared a sick unit due to pile up of debt by the company. The change in the management and change in the attitude made this firm a debt free company by 2009. The company is slowly emerging as a major appliance company with 13.9% market share which was increased from 10.25% two years ago.

The company has a market capitalization of 409 Cr and currently trading at mcap/sales ratio of 0.70x. The Company is a debt free company since last two years and has shown a remarkable journey in last 5 years. The Company maintain ROCE of 30% in the last three years and has a EBITDA margin of over 10%. The promoters has a holding of 71.5% which shows their confidence in the company. The operating cash flow of the company is been continuously positive in last five years and has increased nearly 3 times in last 3 years.

The top line and bottom line of the company has nearly doubled in last five years. The company is growing slowly and creating a niche of its own in kitchen appliances segment. Currently, the company is trading at P/E of 8 compared to another kitchen appliances company TTK prestige tradign at PE of 35x. The Company is small, have become efficient and now trying to be a multibagger...

- Niraj, Equity Analyst

Dated: 11th October 2011