ICE Make Refrigeration Ltd Q3 FY26 Earnings Analysis

- Ice Make Refrigeration targets Rs. 1000 crore revenue by FY’27-28, indicating strong growth ambitions. - Current order book stands at Rs. 190 crore, reflecting ongoing demand and healthy pipeline. - Growth driven by expansion in cold rooms, commercial refrigeration, industrial refrigeration, transport refrigeration, ammonia verticals, continuous panels, and new commercial freezer vertical. - The company focuses on capacity expansion, automation, technology upgrades, and deeper market penetration, especially in Eastern, Central, and Southern India. - Demand is rising in sectors like food processing, dairies, pharmaceuticals, healthcare, and e-commerce. - Management expects a 40:60 sales split between H1 and H2, with higher volumes and revenues in the second half. - Price increases planned to yield approximately 1% margin benefit, supporting revenue growth. - New business verticals are expected to contribute positively to margins and volumes in coming years.

- The company targets a top-line revenue of Rs. 1000 crore by FY’27-28. - EBITDA margin is expected to improve to 8% for FY’26 and normalize around 10%-11% by FY’28. - ROCE (Return on Capital Employed) target is around 25% over time, though it may face short-term pressure during CAPEX phases. - Margin improvement is anticipated through gradual price increases (~1% margin benefit) and better scale of operations. - New verticals like commercial freezers, continuous panels are expected to move towards breakeven with positive EBITDA trajectory from FY’26 onwards. - Order book of ~Rs. 190 crore supports near-term revenue growth. - Working capital pressure is expected initially but should improve as business scales in H2 FY’26 and beyond. - The management expects that once CAPEX achieves optimal utilization, profitability and ROCE will substantially improve.

- The company is in the dialogue phase for a second phase CAPEX of Rs. 150 crore. - This Rs. 150 crore CAPEX includes capacity expansion, technology upgradation, and automation. - Funding for this CAPEX is planned through a mix of debt (there is some capacity left) and equity, but final decisions are yet to be crystallized. - For FY’26, CAPEX of Rs. 22 crores has already been done, including land purchase (~Rs. 10.5 crores) for phase II. - Additional CAPEX in H2 FY’26 is expected to be modest, around Rs. 3-5 crores, possibly up to Rs. 15 crores if developments accelerate. - The new plant and expansions are expected to put some pressure on ROCE initially, but will improve when optimum utilization is achieved.

- The company is in the dialogue phase for a planned Rs. 150 crore Phase II CAPEX. - Funding for this CAPEX is expected to be a mix of debt and equity. - Currently, there is still some capacity to raise additional debt. - The company remains open to raising equity but has not yet finalized the plan. - The final decision on the mix of debt and equity funding will depend on the progress and finalization of the CAPEX plan.

- Current order book stands at Rs. 190 crores. - Vertical-wise order book breakdown: - Cold room: Rs. 33 crores. - Commercial and dairy vertical: Rs. 15 crores. - Industrial refrigeration: Rs. 3 crores. - Refurbished transport refrigeration: Rs. 5 crores. - Ammonia vertical: Rs. 52 crores. - Continuous panel: Rs. 35 crores. - Chest freezer division: Rs. 1 crore (newly started). - Project orders: Rs. 45 crores. - Order delivery timelines vary by product size, with smaller products deliverable in a week and large cold room projects taking from 45 days up to six months. - The order book is ongoing, with new orders regularly coming in as old ones get completed.