Singer India Ltd Q1 FY27 Earnings Call Summary

Event Participants

Executives

2 Rakesh Khanna (Vice Chairman and Managing Director), Anuj Kumar Vasdev (Chief Financial Officer)

Analysts

4 Ashok Jain, Lakshman Pandey, Harshit, Mohit (MK Global Financial Services - Moderator)

Financials & KPIs

Geographic & Segment Commentary

• Sewing Machine (Household): Q1 revenue grew 74% YoY with trade channel up >25% and zigzag machines growing >20%, indicating significant market share gains. E-commerce channel delivered >55% growth. New made-in-India zigzag range produced at Javo factory has received instant trade and customer acceptance, proving capability for high-precision manufacturing; initial learning curve challenges have been largely stabilized.

• Appliances: Revenue grew 15% YoY despite industry-wide commodity cost-driven price increases dampening demand. Segment profit was lower by ~₹74 lakhs YoY due to EPR costs (₹1.2 crores) and investments in organization strengthening for market expansion and fan business. Fan category grew ~61% with encouraging trade response. Management is working to reduce dependence on high-cost channels like motor trade while strengthening the fast-growing e-commerce presence.

• Industrial Sewing Machines: Management is deliberately focusing on the trade channel (~50% of industrial market) rather than large greenfield project orders, leveraging strong dealer relationships. Q1 was dampened by steep price corrections, but management remains hopeful of high growth ahead given apparel sector expansion. Understanding with SVP Global allows machines manufactured by Singer to be purchased for SVP's global supply chain.

Company-Specific & Strategic Commentary

• New Factory - Biwari, Rajasthan: Pilot production planned from H2 FY27, primarily for zigzag machines with future capability for industrial sewing machines and select consumer appliances. Initial capacity targeted at 10,000+ machines per month; factory build-out follows a phased, asset-light approach (skill building → in-house components → industrial machines) to responsibly deploy the ~₹100+ crore cash surplus.

• BIS Standard Compliance: Singer is already fully compliant with revised quality compliance standard IS 15449 and is the only company manufacturing zigzag machines per the new standard in India. With the concurrent import window closed from August 12, 2026, no further import NOCs will be granted — positioning Singer favorably as imports halt.

• Kendriya Bhandar Order: ₹202 crore order has a built-in automatic volume expansion clause of 25% (potential +₹50 crores). Management aims to complete order fulfillment by end of current quarter; declined to disclose pending balance (competitively sensitive). Government discussions underway on possible higher-value machine mix and additional tenders (including zigzag and industrial machines).

• Import De-risking Strategy: ₹14.3 crores advance paid to Single Sourcing LLC for zigzag imports and ₹4 crores for industrial machine imports during the transition window — a deliberate strategy to build sufficient stock while domestic production capacity ramps up, ensuring supply continuity post-import restrictions.

• Inorganic Growth & Exports: Management remains open to inorganic opportunities and is exploring options; surplus cash (~₹100+ crores as of March 31, 2026) will be deployed responsibly in phases. India market remains the top priority over exports; no near-term export plans for sewing machines, though SVP Global arrangement provides an export pathway.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

BIS Standard Compliance & Import Ban

• Question: Has the revised IS 15449 quality compliance standard (BIS) come into effect from August 12, and has Singer been impacted? (Ashok Jain)
• Answer: The standard came into effect 1.5 years ago, but the government allowed a concurrent transition period with NOCs for imports. Singer is already compliant and is the only company manufacturing zigzag machines per the new standards in India. From August 12, no more NOCs will be issued and no more imports will be permitted. (Rakesh Khanna)

Kendriya Bhandar Order Status & Expansion

• Question: What is the pending balance of the ₹202 crore Kendriya Bhandar order, and could the 25% volume expansion clause trigger additional value? Could higher-value machines be introduced into the tender? (Ashok Jain)
• Answer: Management declined to disclose pending balance (competitively sensitive) but aims to complete the entire order by end of quarter. Both options — triggering the 25% clause (~₹50 crores) or folding it into upcoming tenders (₹300 crores total) — are possible; discussions with the government are ongoing. No current discussion on higher-value machine mix, though other government initiatives for zigzag and industrial machines are being considered. (Rakesh Khanna)

Appliances Breakeven Timeline

• Question: Is bit-level breakeven in the appliances segment possible this fiscal given momentum in induction cooktops, air fryers and fans? (Ashok Jain)
• Answer: Management is aiming for quick breakeven but realistically targets next fiscal year (FY28). New product range is gaining traction, margins have improved via e-commerce focus, and induction products provided tailwind — offset by cooler segment headwinds. EPR cost (~₹1.2 crores) remains a drag. (Rakesh Khanna)

Cash Flow & Inventory Buildup

• Question: What was operating cash flow in Q1 and current cash balance? What drove inventory buildup? (Lakshman Pandey)
• Answer: Operating cash before working capital changes was ₹4.25 crores. Strategic inventory buildup totaled ₹32 crores, comprising ₹14.3 crores advance for zigzag imports from Single Sourcing LLC and ₹4 crores for industrial machine imports, plus fan inventory. Closing cash balance remains healthy at ₹58 crores. (Anuj Kumar Vasdev; Rakesh Khanna)

Import Strategy vs Domestic Manufacturing

• Question: Why are large import orders still being placed if domestic zigzag manufacturing has started at Javo? (Lakshman Pandey)
• Answer: The import window closed only on August 12, and domestic production is still ramping up. Building stock during this transition is a deliberate de-risking strategy — machines are complex to make, production capacity needs to scale, and the company wants sufficient inventory to avoid supply disruptions. New Biwari facility will initially have 10,000+ per month capacity. (Rakesh Khanna)

Inorganic Growth & Capital Deployment

• Question: Can inorganic growth be expected this calendar year? Is the ~₹100+ crore surplus cash sufficient, or will equity issuance/share swaps be needed? (Lakshman Pandey)
• Answer: Management is open to inorganic opportunities but will only pursue them when the right asset is found. The factory build-out follows a phased, asset-light approach — level one focuses on skill building, level two on in-house component machinery, level three on industrial sewing machines. The company is cautious with cash deployment and confident it can raise more funds if needed given its healthy balance sheet. (Rakesh Khanna)

Revenue Mix & Export Strategy

• Question: What is the current revenue split between different machine categories, and are exports on the radar? (Harshit)
• Answer: Revenue split is approximately 20% zigzag machines, 50% black (straight) machines, and 30% industrial machines + accessories. India market is the top priority given its size and untapped potential — exports are not a near-term focus. However, an understanding with SVP Global allows Singer's manufactured machines to be purchased for SVP's global supply chain when India becomes price-competitive with China. (Rakesh Khanna)

Industrial Sewing Machine Opportunity

• Question: Given apparel sector expansion (KPR, Shahi Exports, etc.), is FY27 a breakout year for industrial sewing machine sales? Can Singer fulfill an entire factory order? (Ashok Jain; Lakshman Pandey)
• Answer: Commodity price pressure dampens demand, while garment manufacturing expansion encourages factory growth — both forces are at play. Singer is currently focused on the trade channel (~50% of the industrial market) where it has strong dealer relationships, not very large project orders. Market share is consistently being gained, and high growth is expected for industrial machines going forward. (Rakesh Khanna)

Key Takeaway

Singer India delivered a strong Q1 FY27 with revenue rising 57% YoY to ₹144.5 crores, PBT surging 225% to ₹4 crores, and EBITDA turning positive at ₹5.5 crores. The sewing machine category grew 74% with e-commerce up 55% and zigzag machines gaining market share, while appliances grew 15% (fan business +61%) despite EPR costs of ~₹1.2 crores and commodity headwinds. Strategically, Singer is executing a phased domestic manufacturing transition — the new Biwari factory begins pilot production in H2 FY27 with 10,000+ machines/month capacity, and the company is the only Indian manufacturer compliant with the new BIS standard IS 15449, positioning it favorably as imports halt post-August 12. Management remains focused on trade channel dominance in industrial machines, the ₹202 crore Kendriya Bhandar order (completing by quarter-end, with 25% volume expansion potential), and reaching appliances breakeven by FY28. Key watch points include domestic production ramp-up execution, commodity price volatility, and EPR cost absorption in appliances.

Transcript incomplete — segment-level P&L details, cost-to-income, and full balance sheet metrics not available for summary.