ICE Make Refrigeration LtdQ1 FY24
ICE Make Refrigeration Ltd Q1 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹769P/E: 87.9Market Cap: ₹1.2K CrSector: Industrial Manufacturing
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
N/A
Order
Yes
Capex
Yes
2 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 2- →Company targets Rs. 1,000 to Rs. 1,100 crores topline by 2027-28, roughly 2.5x growth from FY24 revenue of Rs. 379 crores.
- →Industry growth drivers include increasing demand in cold storage due to government initiatives and rising need in dairy, ice cream, pharma, and food processing sectors.
- →Expansion in product lines like Continuous PUF Panels and Commercial Refrigeration expected to add Rs. 100-145 crores revenue in coming years.
- →Ice cream industry growth and CAPEX in cold chain sectors signal strong volume increases, with potential for 25%-30%+ volume growth next season.
- →New product and geographic expansions, including East plant ramp-up, expected to increase capacity utilization from 70% to 80%.
- →Export opportunities are being explored with potential to tap new markets in 1-2 years.
- →Mix of premium verticals (Cold Rooms, Industrial, Commercial) projected to drive 75%+ of sales, maintaining stable and growing revenue streams.
Margin guidance
Category 3- →Ice Make Refrigeration aims to reach Rs. 1,000 crore topline by FY27-28.
- →Q4 FY24 EBITDA margin improved to 14.93%, with a targeted sustainable EBITDA margin between 9.5% to 10.5%.
- →Full-year FY24 revenues grew 21% YoY to Rs. 379 crores; net profit increased by 26.2% YoY.
- →Earnings have grown at an average annual rate of 39.4% over the past 5 years.
- →Return on Equity (ROE) stands high at 25.1%, reflecting strong profitability.
- →Market capitalization increased by 88% in FY24, signaling investor confidence.
- →Company plans capacity expansion including Continuous PUF Panels and Commercial Refrigeration, contributing incremental revenue of approx Rs. 125-145 crores over two years.
- →Focus remains on premium verticals; project business complements growth but with lower margins.
- →Operating leverage expected to sustain EBITDA margin around 10%, with potential to improve beyond that.
- →Dividend payments increased, reflecting strong cash generation and shareholder returns.
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Fundraise plans
- →Current debt position: Around Rs. 57 crores (Ankit Patel, Page 7).
- →Post-project implementation, expected debt will be around Rs. 60 to 70 crores (Ankit Patel, Page 7).
- →Debt profile considered comfortable for ongoing projects, with no final decision made on whether to raise additional funds via debt or other sources (Ankit Patel, Page 7).
- →Rs. 200 crore CAPEX planned for current fiscal year, partly funded by internal accruals and potentially debt or other sources (Nikhil Bhatt, Page 10).
- →No specific mention of planned new equity fundraising.
- →Management open to exploring other funding options including debt or acquisition-related capital for geographical expansion or warehousing needs (Nikhil Bhatt, Page 10).
Order book
Yes- →Current pending order book is over Rs. 122 crores.
- →Order book mix includes:
- → - Ammonia vertical: Rs. 30 crores
- → - Cold Rooms: Rs. 21 crores
- → - Commercial vertical: Over Rs. 25 crores
- →Large projects like Ammonia and big dairy projects have delivery timelines of 6 to 12 months.
- →Small and modular Cold Rooms and Commercial products have shorter timelines (2 to 9 weeks).
- →Ongoing projects include substantial orders from Jammu Kashmir Horticulture Department and reputed clients like Haldiram’s, Bikanervala, Amul Group.
- →The order size in Ammonia vertical and Cold Room projects is comparatively larger than before.
- →Some projects have pending dispatches, e.g., the Haringhata project in Kolkata with around Rs. 35 crores pending dispatch.
Capex plans
Yes- →Current CAPEX of Rs. 200 crores includes major projects:
- → - Continuous PUF Panels plant (civil work ongoing, machinery from China and Singapore delivered, production expected by Q3 FY25).
- → - Chest Freezers production (machinery ordered, operation expected by October 2024).
- → - Chennai plant expansion/relocation (civil work underway, expected completion in 6 months, shifting by end of FY25).
- → - Expansion in Kolkata with additional stock points/warehousing to reduce logistics costs.
- →Rs. 75+ crores planned to be spent this year for Continuous PUF Panels and Chest Freezers.
- →Future CAPEX will focus on geographical expansion, new product lines like Chest Freezers and Visi Coolers, warehousing, and possibly acquisitions.
- →Debt after project completion projected around Rs. 60-70 crores.
- →CAPEX decisions are guided by ROCE benchmarks (~25%) and market opportunities, with a focus on premium verticals (Cold Room, Industrial, Commercial).
How does ICE Make Refrigeration Ltd rank vs peers in Industrial Manufacturing?
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