Chapter 1

INDUSTRY PROFILE

1.1 Introduction to Consumer Electronics and Household Appliances Industry

IFB electronics comes under Consumer Electronics and Home Appliances Industry. Consumer
Electronics are the electronic equipment intended for every day usage in the Indian homes.
These consumer electronics include the devices of communication, recreation etc. These
electronic items are referred to as black goods, as the appliances are in dark casings to
differentiate themselves from the white goods (white goods are the appliances used for
household tasks) like microwave ovens, washing machines, refrigerators & etc. In the year
2010 this differentiation had been vanished in large big box consumer electronic appliances
store, that are dealt in the sale of entertainment appliances, communication appliances, kitchen
appliances, office devices etc.

Home appliance is also known as domestic appliance or household appliance, these appliances
which assist in household functions such as cooking, cleaning, food preservation, etc are known
as the domestic appliances. Household appliances are categorized into 3 types namely: Small
Appliances (small household electrical appliances, which can be easily carried and can be
installed), Major appliances and Consumer Electronics. The consumer electronics appliances
require higher technical skills and knowledge, the major appliances may need more practical
skills and force to manipulate the devices and heavy tools are required for the repair of the
appliances. In simple words, home appliances are the devices or instruments designed for a
particular or specific function in home. Major appliances are the white goods which comprises
of major household appliances (AC’s, dishwashers, cloth dryers, washing machines,
microwave ovens and many more). These white goods are painted in white color or have been
enameled in white. The other type of electrical items used in kitchen are electric mixers, juicers,
food processors, kettles, etc.

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While many appliances have been in the existence from past many years, in the 12th century
the gas-powered appliances were the unique innovation that had been emerged at that time.
The development in this electronic appliance industry has led in disappearing of the full-time
domestic servants to reduce the time consumed by the physical activities. In 20th century, the
gas and electric appliances including the water heaters, washing machines, kettles, refrigerators
& etc were brought into existence. The invention of small electric cloth iron box in the year
1903 gave an initial boost in this home appliances industry. Post-World War 2, the domestic
use of dishwashers and cloth dryers were part of a shift for convenience.

In 1980’s the American industry had shipped goods of $1.5billion each year & had employees
of more than 14000 workers, with the revenue doubling in the time period between 1982- 1990
amounting to $3.3billion. During 1980’s the companies were merged & had acquired each
other companies to reduce the production costs, R&D (Research and Development) costs and
to eliminate the competitors in the market. In 1990’s the household appliances industry was
consolidated with majority of the products being sold by only very few companies in the
market. In the year 1991 the dishwasher manufacturing industry market share was divided
among the top companies, General Electric with the majority share of 40%, Whirlpool with
31%, Electrolux with 20%, Maytag with 7% & Thermador with 2% of the market share in the
market.

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1.2 Networking of the Household Appliances Industry

The trend of this household appliances together by combining their control & main functions,
ex: the distribution of energy can be managed evenly, so that when the washing machine is
working & the microwave oven can go into a delayed mode of start or vice versa. The clothes
dryer and washing machines share information about the load characteristics, the mode of
washing and also synchronizing their finish times, so that the wet clothes need not wait before
being put into the dryer. Some of the companies are planning to place the hardware that enables
the internet connectivity in these appliances to allow the remote-control operation, automation
and to allow more functionality by enabling the smartphones to be connected with the
appliances.

Household appliances recycling consists of dismantling the waste home appliances &
scrapping the parts of the appliances for reuse and recycle. Appliances that can be recycled are
Television, Washing machines, Air Conditioners, Refrigerators etc. This recycling process
includes disassembly, removal of the hazardous substances and destruction of the equipment
to recover the materials by sorting, shredding and grading.

1.3 Household Appliance Market in India

The Household Appliances Industry is the fastest growing sector in the Indian market and are
being growing at a steady pace, that are driven by both the larger appliances as well as the
smaller appliances in India. In the year 2018 the larger appliances market had a higher growth
when compared to the smaller appliances growth in the market. This industry has a very vast
untapped market for the appliances (refrigerators, washing machines, etc). The Air Conditioner
market had a penetration level of 4% in India as when compared to the global average of 30%.
The emerging economy & the changing lifestyle of the Indians have been leading to growth in
the number of people working, single person households, the migrating job population and
nuclear facilities. These households have an increasing need for accessibility and are looking
for products which provides convenience & considerably reduce the time consumed and effort
spent on everyday activities. The main element for the growth is the increased affordability,
energy efficient products, increasing digital penetration and the rise in the aspiration. The
household sector and the National Policy for Electronics (NPE) may bring significant changes
in the policy for the industry. The middle-income group of people residing in the urban areas
and the demand from the rural areas, coupled up with the government reforms in the form of

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Goods and Services Tax (GST), are providing a positive view towards the next stage of
exponential growth. This is primarily by rising this disposable income in the Indian Households
and the easy credit access, which leads to growth in purchasing power of the customers.

The increase in electrification in rural areas and the influence of this social media has increased
the popularity of online sales through various websites and this has been the key to increase in
demand. Around 66.67% of the revenue is being generated from the urban areas and the rest is
generated from the rural areas.

1.4 Overview of Household Appliances Market

The Global Market was being valued at a price of $501,532 million in the year 2017 and is
estimated to reach $763,451 million by the year 2025, growing at a CAGR (Compound Annual
Growth Rate) of 5.4% from the year 2018 to 2025. The Consumer Electronics and Household
Appliances Industry in India are grown to $2.12 billion in the year 2021.

Technavio has been monitoring the Consumer Electronics and the Household Appliances
Industry in India to have a progressing CAGR of 1% during this forecasting period and to grow
by $2.12 billion. The market has been fragmented and the degree of this fragmentation would
increase during this forecasting period. The expected revenue in this particular industry is
projected to reach US $1,613 million in 2021and the number of users is estimated to 415.8
billion users by 2025 and the user penetration would be 14.2% in 2021 and expected to reach
28.8% by 2025.

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Grand View Research had produced a report which projected the global market being expected
to reach the target of $838.85 billion by end of the year 2020 and estimated CAGR growth of
over 7% between 2020 to 2026. IBEF had estimated the household appliances and consumer
electronics market in India to reach the target of $10.9billion in the year 2019 and estimated to
double in the year 2025. This television market in India has reached $11.26 billion & was
estimated to reach $13.66 billion in 2021.

The major players in this industry are: Hitachi, Philips, LG Electronics, Bosch, Samsung
Electronics, Sony, Toshiba, Whirlpool, AB Electrolux, Haier are the major market participants
in the Indian market.

ACE (Appliance & consumer electronics) Indian market reached Rs.76,400 crore in the year
2019. This industry is being expected to double its reach to Rs. 1.48 lakh crore by the year
2025.

The major factors driving this Global Household Appliances sector are the technological
advancements, growth in the housing sector, the rapid urbanization, rise in the per capita
income, surge in the need for comfort in homes, improved living standards, changes in the
customer lifestyle & inclination of consumers towards the eco-friendly lifestyles boosts the
market growth. Factors such as government initiatives for the energy efficient appliances across
the globe are expected to facilitate the adoption of energy efficient appliances in the recent
times.

The recent report states that the Global Household Appliances market is mainly concentrating
in Air Conditioners, Refrigerators, Heater, Entertainment appliances, cleaning appliances etc.
The refrigerator has become one of the essential parts in each of the Indian Households and it
is the first household appliances purchased in every houses. Refrigerators are operated
continuously throughout the year & the annual energy consumption is a major issue associated
with the product. The 3-star and 4-star energy rated refrigerators are high in demand as they
are installed with the most efficient features of defrosting, compressors, insulation, that helps
in energy efficiency and cost saving. The companies invest in Research & development for
innovation in energy efficient products owing to increase in demand for appliances.

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1.5 Key drivers and trends in Consumer Electronics and Household Appliances are

The higher demand for the premium appliances is the primary factor which increases the
growth of this market in India during the coming years. The premium appliances are being
equipped with more smart features that would match the societal status of the upper-class
people, with the increasing number of high net worth of an individual, the demand for this
luxury appliances are growing in the developing economies as well as to provide increased
convenience. Vendors are integrating smart features in the appliances that influences the
consumers purchasing behaviour and also reduces the manual labour work that can be
controlled and operated using smartphones.

Urban areas have the majority share in the total revenue earned by this household appliance
industry in India. There is an increase in the spending capacities of the people located in urban
areas, for the services & products that acts as a status symbol to the customers. The demand of
these appliances compliments the overall theme of the home & suits the utilitarian requirements
of the households. The basic appliances (washing machines, mixer grinders, refrigerators) that
are found in each and every Indian household have been witnessing a huge demand for the
advanced & latest features. The demand for those built-in appliances with technology have
been gaining trust due to perfect amalgamation of cutting-edge design technology & high
functionality features in the appliance.

1.6 Competitive Landscape

Indian household appliances market is the most competitive & moderately consolidated
market, as majority of the top companies have the majority of the market share in both the
larger & smaller appliances segment. Consumers are being technically sound & manufacturers
have the responsibility of providing the best technological advancement and update to the
consumers, therefore the companies are increasing the investment on Research and
development. According to a source of information, in the year 2018, 34% of the Indians living
in urban areas, are being projected to increase in the coming years. This development helps in
creating opportunities for the smartphone market players in the market.

The growth in household appliances and consumer electronics industry has witnessed the
process of liberalisation. This is the important part of the economy playing an important role
in providing employment opportunities to millions of people and are also improving the quality
of life of the people in the country. The current situation of economy or growth in this sector

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is facing low growth, for a temporary phase and the economy would be sooner reaching 8% &
above growth with the double-digit growth.

The growth of this electronic appliances segment has been rapid from the last 15 years & now
it has the capability to escalate the efficiency in other industries including agricultural,
educational etc. This plays a vital role in the development of the country by contributing in the
growth of the economy & creating employment opportunities. The contribution from this sector
to the nation’s GDP is around 16.51% in 2016. The government initiated various policies,
programmes & initiatives to perk up the domestic production. The recent trend is “Vocal for
Local” & “Atmanirbhar Bharat”.

Country/Region Expected growth of GDP (%)

2020 2021 2022 2023

India 7.9 8.0 8.1 8.2

6.2
China 6.0 5.7 5.5

1.8
United States 1.7 1.4 1.3

1.8
EU 1.7 1.7 1.7

1.7 The future of Household Appliances and Consumer Durables in India

India had witnessed many changes in its policies, rules, etc in the recent times. The Indian
Government has initiated some important reforms for the ease of doing businesses in India,
though the cost of establishing has been increased with various regulatory practices & the
introduction of Goods & Service Tax has brought many benefits to the customers. Operational
inefficiencies and higher costs have been slowed down the growth of this sector in the market.

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1.8 CEAMA

CEAMA stands for Consumer Electronic & Appliances Manufacturers Association (CEAMA)
which was established in the year 1978. This association is the all-India apex body of
Manufacturers of Consumer Electronics and Home Appliances, valuing Rs. 45,000 crores.
CEAMA acts as the catalyst in the promotion of trade, technology, entrepreneurship and
industry. This spectrum of membership consists of the domestic appliances & the large,
medium, small segments. All the leading brands in these industries like Videocon, LG, Onida,
Philips, Toshiba and etc are the members of this association.

This association is the industry chamber that is recognized by the IT Department & Electronics
Department in India. Suggestions & Recommendations are given due consideration by the
Indian Government in formulating the Union budget and implementing policies for this
electronic appliance sector, which works closely with various departments and ministries of
both the state and central government on the matters related to development & growth of this
industry. CEAMA functions as an interface between the appliance industry and the
government.

India has been trailing behind the ASEAN countries in terms of production quality & exporting
of consumer appliances. Quality manpower, infrastructure, technology, capital investment
needs to be enhanced with conscious policy interventions & managerial actions to boost the
competitiveness among this sector.

The president of CEAMA (Manish Sharma) states that the Indian Government needs to have
policies to create the economies of scale and free trade agreements to ensure growth across the
ACE sector. He also stated that the finance cost would reduce by reducing the price for the end
customers and leading higher demand.

In the year 2017, India had surpassed France & was the 6th largest economy in the world. In
2018 it had overtaken UK and was the 5th largest economy. As India is the 2nd largest country
in regards to population of 17% of world’s population & 3% of the global consumption of
products & services and the highest consumption growth among the top countries that are
ranked by the household final consumption expenditure.

CEAMA president has stated that the Indian Appliances and consumer electronics market is
predicted to grow more than 2 times in the next 5 to 6 years and reach up to Rs 2 trillion.

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1.9 Impact of Covid 19 pandemic on the Household Appliances & Consumer Electronics
sector

This Covid-19 has been a prolonged pandemic, that has made a big difference on the sales of
this household appliances. Some of the categories like personal computers, laptops have been
benefited many people who had to work from home, online classes to be attended by the
students led to more sales during pandemic. This pandemic has both psychological (consumer
sentiment) & economical effect and many more have been affected negatively.

Lalit Arora states that, this pandemic has impacted the household appliances industry in India
as the production process had been stopped due to the nationwide lockdown and the drastic
decrease in the sales. A ban had been imposed by the Indian Government on China products;
this had a severe impact on the electronics industry. According to Confederation of Indian
Industry, China accounts 45% of the total imports of electronic items & India was dependent
on China for the electronic items, semi-finished parts, semiconductors, chemicals, nuclear
reactors, etc. The luxury products have been negatively affected in the pandemic as the
purchasing power of consumers had been declined.

The ACE (Indian appliance and consumer electronics) has seen increase in the cost due to the
nature of compliances that are prescribed by the Indian Government. This burden has finally
transferred to the consumers, by making the products not affordable & having a detrimental
impact on demand.

1.10 Compliance elements are:

A) BEE star rating compliance

B) BIS testing and certification

C) Environmental norms

D) Incentive package scheme

A survey conducted in the year 2020, stated that more than 13000 people in the United
Kingdom had revealed that how long the electronic appliances users had their appliances before
replacing the old one due to their fault or deteriorating performance and life span of the
appliance.

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 Highest average life Shortest average
Name of the appliance
span(estimated) lifespan (estimated)

Washing Machine 21 years 13 years

Tumble dryer 24 years 17 years

Fridge freezer 24 years 14 years

Fridge 29 years 18years

Dishwasher 22 years 13 years

Built-in oven 29 years 23 years

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 Chapter 2

COMPANY PROFILE

2.1 Introduction

IFB Industries ltd is an Indian based company dealt in manufacturing business of the fine
blanked components (decoilers, strip loaders) trading in steel products & household appliances
(microwave oven, dishwashers, washing machine). They operate in 3 fields, i.e., home
appliances, engineering division and others. The engineering division factory is located in
Bangalore and Kolkata. They also manufacture motors for white goods and automotive parts.
The Company was started by Bijon Nag (an engineer by profession), IFB industries limited is
one of the well-known organizations engaged in manufacturing and trading of hood type
dishwasher, rack conveyor dishwasher, under counter dishwasher, under counter glass washers,
washer extractor, drying ironer, tumble dryers, front load washing machine etc. They also
provide repair and after sales service to their customers and their products are admired by their
patrons for their study design, top performance, longer life, fine finishing and prices. Modern
technology has been rescuing countless homes with creation of washing machines. IFB is a
trusted brand, well known, in this home appliance industry.

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This IFB industries was incorporated on 12th September 1974 in West Bengal as Indian Fine
Blanks Ltd collaborating with Switzerland company Hienrich Schmid AG to manufacture fine
blanking tools, press tools etc. The household appliances division was started in the year 1990-
91 and the factory is located in Bengaluru. IFB’s registered office is located in Kolkata. This
IFB household appliances is a division of IFB industries Ltd which manufactures consumer
electronic products & services across the range of products. The company has a chain of retail
outlets of more than 500 outlets named as IFB point. The nature of business of IFB is
manufacturer, exporter, trader, supplier, service provider.

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2.2 Company’s LOGO

2.3 IFB’s vision

IFB will be the synonymous with innovation and technology in its chosen fields of business
activities. IFB will excel in quality and services to be in consonance with global standards.

2.4 IFB’s mission

IFB aims at continuously maximizing company’s wealth by manufacturing & marketing the
best quality engineering products that go into their daily life.

Mission towards their customer is, “The best product to buy, an innovative product that
consistently out performs peer & outstanding service that makes their every customer smile”

Mission towards their people is,” An environment in which the individuals can constantly learn,
grow & prosper”

Mission towards their business partner is,” IFB brand should be the first choice for their
services & products”

Mission towards their investor,” IFB should be acknowledged as one with highest standards of
corporate transparency, that delivers the promises given to shareholders”

2.5 Policies

IFB follows Zero Compromise Philosophy: IFB does not compromise with the processes,
components, and technologies to deliver outstanding performances. Research & Development
is the backbone for the innovations, equipped with the higher end designs and analysis
software.

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IFB follows the Zero Compromise on Health: IFB household appliances sector that puts well-
being first with features that ensure health and hygiene. Indian conditions enable to develop
the technologies that tackle hard water, voltage fluctuations, greasy dishes, unhealthy cooking,
stubborn stains, etc.

2.6 Values:

• Never let the profit centre conflict get into the way of performing what is right for the
customers.

• Giving customers a fair & good deal. Not to try maximise the short-term profit at the
extent of building those enduring relationships.

• Always look for ways to do business with IFB.

• Communicating daily with the customers.

• Eliminate bureaucracy.

• Great customer relationships take time.

2.7 Quality policy

The IFB’s quality policy states that “To supply products that exceed the customer’s expectation
due to excellence through perfection in quality and service. To maintain an environment for
teamwork and continuous improvement, leading to a total quality in all the activities of the
organization”.

Modern quality control facilities (ZWICK Micro hardness tester and micro tester, FERRANTI3
Co-ordinate measuring machine, metallography microscope and others) are available. The tests
ensure that the products of IFB are meeting the standards of quality of products & promising a
lifetime of freedom to enhance with the peace of mind while owning an IFB product.

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2.8 Management

Name Designation

Amar Singh Negi Executive Director

Ashok Bandari Independent Director

Bijon Nag Executive Chairman

Bikramjit Nag Joint executive chairman and MD

Biswadip Gupta Independent Director

Chacko Joseph Independent Director

Desh Raj Dogra Independent Director

G Ray Chowdhury Co. Secretary and officer

Partha Sen Managing Director and CEO

Prabhir Chatterjee Director & CFO

Rahul Choudhuri Independent Director

Rajshankar Ray Managing Director and CEO

Rathindra Nath Mitra Independent Director

Sangeetha Shankaran Sumesh Independent Director

Sudip Banerjee Non-Executive Director

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2.9 Shareholding Pattern - IFB Industries Ltd

Holder’s Name Number of shares % Of share holding

Promoters 30373199 74.96

Foreign institutions 3137060 7.74

Banks and mutual funds 753638 1.86

Others 2891398 7.14

General public 3309959 8.17

Financial Institutions 53542 0.13

Total 40518796 100

Present share price of the company is Rs1176(as on in the month of November). IFB’s current
market capitalisation stands at a price of Rs.4765.01 crores and in the 4th quarter of the
company has reported a gross sale of Rs.34209.4 crores & total income of Rs.27454 crores.
The organization includes G Ray Chowdhury, Biswadip Gupta, Desh Raj Dogra, Chacko
Joseph, Ashok Bhandari, Rahul Choudhuri, Sangeeta Sumesh, Rathindra Nath Mitra, Sudip
Banerjee, Amar Singh Negi, Prabir Chatterjee, Partha Sen, Rajshankar Ray, Bikramjit Nag,
BijonNag.
It is listed on the BSE (Bombay Stock Exchange) with a BSE Code of 505726, NSE with an
NSE Symbol of IFBIND and ISIN of INE559A01017. Company’s Registered office is at 14,
Taratolla Road, Kolkata-700088, West Bengal. Their Registrars are ACC Ltd, Auditors are
BSR & Co, Deloitte Haskins & Sells.

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2.10 History of the company

In 1985, IFB had purchased 4.84 acres of land in West Bengal (Gangarampur) on lease for the
manufacturing of high technology machineries and future expansion with diversification
programmes. The company had received a letter of intent to set a cold rolling mill in India. In
1986 the company had a proposal to modernise its existing manufacturing plant. The
organization undertook a project of setting up a second blanking unit in Bangalore in the year
1987.

In 1988, IFB company had set up a new division named as the Project and Construction division
to take up the projects in India and Abroad. A company named Rentrop Hubert & Wagner
Gmbh & Co, KG West Germany company joined hands with IFB and started a Joint Venture
company named as RHW India Pvt Ltd, for manufacturing of the automatic seat adjustment.
IFB proposed to set up a Joint Venture in United States with paid up capital of $100000 to
intensify the sales of the company’s products (machinery tools) in United States and Canada.

In 1989, IFB went into collaboration with Bosch-Siemen Germany for the production of fully
automatic washing machine & domestic appliances. On 19th July 1989 the company changed
its name to IFB industries Ltd & started a company named European Fine Blanking Ltd in
North Wales UK with the partners of Europe for manufacturing the fine blanking tools for the
European and UK market. RHW India Pvt Ltd turned up as a subsidiary company and changed
its name to RHW India Ltd and entered into a Joint venture with Electrolux Autoliv AB for
manufacturing, sales and export of automotive seat belts & accessories.

IFB had started producing fully loaded automatic washing machines in the year 1989 and was
famous for its quality, technology and durability. In 2000 IFB had launched their fully loaded
automatic washing machine in Kerala market.

IFB launched a microwave oven and a highly sophisticated washing machine named as ‘IFB
Digital’ with advanced features and latest models in the year 2002 and 2003. The company
established 250 retail outlets in different locations in India.

In the year 2003-04 IFB launched a new model of washing machine named as ‘Elena’ and a
hair dryer named as ‘Easy dryer’. In addition to these the factories in Kolkata and Bangalore
have been certified as QS9000 by the DNV.

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From 2005 to 2008 IFB had launched a new economy model of washing machine named as
‘DIVA’ and the higher end version was named as “Digital 7kg” and also 2 new models of
microwave were launched and also started sourcing out their industrial dishwasher.

In 2017, IFB had invested in their subsidiary company (Trishan Metals Pvt Ltd) & had acquired
51.12% of the stake of the company and the rest were brought by the IFB company on 31st
October 2020 at a consideration of Rs. 1430 lacs, there by converting it into a fully owned
subsidiary company. The Board of Directors held a meeting on 30th December 2020, and agreed
to approve the amalgamation of its fully owned subsidiary company with IFB Industries. IFB
industries had come into an agreement with the IFB automotive towards acquisition of the
Global Automotive and Appliances.

The washing machine technology had not been evolved unlike other categories & IFB had a
very good relationships with the regional retail chains such as IFB points, Adishwar, Viveks.
The Nag family holds the majority of 75% of shares in the company & IFB was once sick, but
over the years the company fought back to profitability without any impact on its market share.
IFB’s appliances sales increased by 24% in the year 2014-2015 and the sales of front load
washing machine had increased by 28% and 12% of microwave ovens.

Success in front load washing machine has led the IFB to start with production of top load
washing machine in the 4th quarter of 2014-2015. It had entered into Refrigerators and Air
Conditioners market and planning to sell it to its existing customers of washing machines,
microwave oven.

2.11 Reasons for IFB success are:

a) Strong focus on quality compliance

b) Easy mode of payment
c) Timely delivery
d) Innovative designs
e) Excellent performance by the appliances
f) Equipping with innovative technologies

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2.12 Achievements / milestones

i. India’s first front load washing machine.

ii. India’s first clothes dryer
iii. India’s first dishwasher
iv. India’s first smart load washing machine

2.13 Products list and profile

• Washer dryer refresher

This is the India’s first 3 in 1 laundrimagic, which uses steam in 11 wash programs to
ensure highest level of hygiene. Getting clothes dried as the customer wants with 5 modes
to choose from and the refresh cycle which helps in making clothes ready to wear. They
ensure that the clothes remain germ free, it prevents fading so that the clothes always look
as good as new ones.

• Front load washing machine

IFB’s front load washing machines are well equipped with features that provides a perfect
wash. Aqua Energie (a filter component for treating hard water), cradle wash feature to wash
delicate laundry and designer clothes with utmost care as that of hand wash. Washing machines
have the cutting-edge technology which offer the finest care for clothing at competitive rates
and to simplify the chore of washing clothes. Washing machines are available in two variants
namely fully automatic and semi-automatic with the options of top load and front load. Both

19
are equally efficient and serve the same purpose, but the semi-automatic variant is lower end
model that consumes less water, does not require continuous water flow and takes significant
less time to wash clothes. These semi-automatic machines fall between the fully automatic and
hand washing, which requires some personal intervention during the cycle. The IFB washing
machines are affordable and it offers excellent features that assists in getting fresher, brighter,
and immaculate clothing.
Senator Smart Touch SX 8.5 KG | 1400 RPM | SILVER Front Load Washing Machine

• Top load washing machine

IFB’s top load washing machines are all about efficiency and ease, the aqua spa therapy feature,
that pampers the clothes and removes dirt, the deep cleaning function using the triadic pulsator
technology to clean clothes thoroughly. The touch controls help by selecting the desired wash
program easily for the users.

TL – SDIN 9.5 KG | 720 RPM | INOX Top Load Washing Machine

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 • Air conditioner

IFB’s fast cool Zero- compromise AC is driven by the philosophy of Zero compromise on air
quality, on cooling comfort and on peace of mind. IFB AC’s boast a 7-stage air treatment that
makes indoor air quality better, the best-in-class cooling standard along with leading edge
features for long life of AC, which comes together to make IFB fast cool one of the best ACs
in India.

IACI12SA3G3C 1 TON | 3 STAR SILVER SERIES Inverter Air Conditioner

• Microwave oven

IFB’s microwave ovens are perfectly suited for Indian kitchens, where the need is only for
simply heating, boiling or defrosting. This offers a great convenience in heating and serving
food faster.

20 L Convection Microwave20BC5

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 • Dishwasher

IFB dishwashers consists of incredible features and water softening technology and convenient
programs that removes the stubborn oil and masala stains caused by Indian cooking. It cleans
the dishes hygienically & easily, saving water and energy.
Neptune FX
12 PLACE SETTING DISHWASHER

• Chimney

IFB’s chimneys eliminates noxious fumes, heat and other gases effortlessly from the kitchen
at the touch of a button. They are equipped with larger air volume exhaust which enables better
performance and the inbuilt heater removes trapped oil efficiently for smooth performance.

C-BS-60BF 60 CM Wall Mounting Chimney

• IFB essentials etc

• Built in HOBs

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 • Built in oven

• Built in dishwasher

• Stabilizers

2.14 New launches by IFB are: -

1. Fabo Stain Remover Pen – Be always stains ready

2. Liquid laundry detergent

3. Aroma diffuser

4. Machine care essentials

2.15 Competitor’s information

IFB withstood the competition with multinational brands and also the other home-grown
players like Godrej, BPL, Videocon that had lost their market in home appliance and
electronics industry. IFB’s brand pull is due to repeat purchases made from the first-time
consumers and gains from the word-of-mouth publicity (this was stated by Pulkit Baid the
Director of Eastern’s Electronics retailer)

Main Competitors of IFB are:

LG

The philosophy of LG company revolves around people, sincerity and sticking to the
fundamentals. LG had an intention to know about their customers & to offer them with new
experiences and optimum solutions through innovations and thus helping their customers lead
better lives.

LG have developed a brand globally and states that “Life’s Good”. LG are contemporary
authentic, evolving fundamental philosophies to the modern arena. LG’s products are
dishwasher, air purifier, washing machine, refrigerator etc

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Philips

Philips India Ltd is a subsidiary company of Royal Philips of Netherlands (a leading health
technology company focusing on improving people’s health). The company is a leader in
diagnostic imaging, image guided therapy, patient monitoring and health informatics,
consumer health & health care. They leverage advanced technology and deep clinical and
consumer insights to deliver integrated solutions.

The products by Philips are Kettle, Oven, Toaster, Juicer, etc.

Haier

Haier company had started around 30 years ago in the Chinese market, today it has spread over
Asia, Africa, Europe, North America, and Middle East. Haier India company is the fully
subsidiary company of the Haier Group, the fastest growing consumer durables company in
the market. Haier is world’s No 1 brand in Major Appliances for 12 continuous years as per
the Euromonitor International report. The company started its initial operations in India in the
year 2004 January and the company offers various range of products (AC’s, washing machines,
refrigerators, freezer, television etc). Haier is well known for introducing innovative products
across the globe. It is best known for its revolutionary products such as BMR (Bottom Mounted
Refrigerators) and refrigerators with smart convertible sections with French door.

Every product from Haier comes from its brand philosophy of ‘Inspired Living’ and is featuring
the best-in-class innovation and technology keeping the day-to-day customer needs in mind.
Haier started manufacturing refrigerators in India in the year 2007 at its factory in Pune.

Whirlpool

Whirlpool company is known for the best global kitchen and laundry company, in constant
pursuit of improving life at home. In this digital world the company is driving purposeful
innovation to meet the evolving needs of consumers through its brand name. in the year 2020
the company reported approximately $19 billion as its annual sales, 78,000 employees in their
company and 57 manufacturing and technology research centres.

The other competitors are:

1. Panasonic

24
 2. Samsung

3. Sony

4. Toshiba

5. Hitachi

IFB business was started at the time of Bengal Communist rule, and the company is still holding
white goods market of Rs 30,000 crores dominated by the leading multinational brands. IFB
industries Ltd which started its home appliances division in 1991, has not once ceded its
leadership position in front load washing machines during the competition among other brands
such as LG, Samsung, Bosch etc. It remains as the 3rd largest brand in microwave oven in the
country. IFB has around 40% of the share in the market for the front load washing machines,
ahead of LG of 33% according to market tracker (GFK’s data). IFB’s promotional and
advertising expenditure costs around Rs.71 crore per annum across its both the business of fine
blanking and home appliances, while its global rivals spend around Rs.200 to 800 crore on
marketing every year.

2.16 IFB group consists of: -

I. Home appliances, IFB industries limited

II. Fine blanking and motor (precision engineering)
III. IFB automotive Private ltd (pioneering perfection)
IV. IFB AGRO limited (Aquaculture)
V. Travel systems

2.17 Particulars of holding, subsidiary and associate companies are: -

I. Thai automotive & appliances Ltd

II. Trishan Metals Pvt Ltd
III. Global Appliances and automotive Ltd

25
2.18 IFB engineering division

The fine blanking division of IFB group is the development in the metal forming industry that
includes precision mass production techniques in manufacturing the end products. This
blanking division employs a system of machine movement, plastic deformation and tooling.
This is taken into consideration for the geometrical accuracy & close tolerance of metal cutting,
milling, grinding, shaving, chip flowing combined with the productivity of metal stamping
operations. This technology of fine blanking has created niche requirements in this automobile
industry for the production of high precision parts required for the transmission and engine
parts etc.

The capacity of this technology is to manufacture 100% shear edges with the extreme close
tolerance that has been recognized by the industries such as aviation, compressors etc.

Components are: -

• Engine components

• Transmission components

• Clutch components

• Braking components

• Seat belt components

• Switch gear components

• Compressor valve plates

• Motorcycle chain and sprocket kit

Valued customers are: -

1. Ashok Leyland

2. Nissan

3. Royal Enfield

26
4. Hero motors

5. TVS

6. Honda

7. TATA

27
 Chapter 3

CURRENT STRATEGIES

3.1 IFB marketing strategy and reason of minimum spending on Advertisements

IFB plans to make more noise in the market place in the coming year and enter into lower price
points, so that it would be reasonable for the middle-class families to afford IFB products and
services. The restructuring ideas from the year 2003 had also included product repositioning,
with the lower price target & decentralisation of operations by setting up of 19 branches and
operating as the profit centre, with a budget allocated for the local level marketing process. It
had brought a strong retail background as branch & regional managers, to provide inputs for
demand generation and channel distribution. IFB started exporting to Gulf countries in the past
years and planning to expand in the South Asian Market also, with their first consignment
reached to Nepal, Myanmar, Sri Lanka and Bangladesh.

IFB household appliances had gone for a new price positioning to address a wider target
customer with entry level products to the top loaded washing machine buyers of the rival
products. The very first machine was introduced at a price as low as Rs.14,996 and launching
further new models at a price higher and lower than the basic model.

IFB plans to go with unconventional avenues to build an atmosphere of trust rather than going
with electronic advertising. The national sales manager states that IFB plans to go into activities
like influencing the local women to recommend IFB products and build their trust with the
water saving features in the products.

IFB focus mainly on the premium segment customers and premium pricing systems. This is
known as Niche marketing where the focus is made on a small and specialised group of people
by aiming to satisfy their needs in terms of the price range and production quality. IFB believes
that the superior quality of its products is in itself enough for its promotion. With a strong track
record of high-quality product performance, IFB has developed a strong reputation as a
premium brand, product superiority, and timely after-sales service which has helped it to
develop a loyal consumer base.

IFB counts on word-of-mouth marketing, it's free advertising which gets triggered
when customer experience exceeds the expectations and influence others by mouth publicity.

28
IFB's unique selling proposition is the customer’s loyalty and trust in their brands, they do face
stiff competition but have still maintained its premium pricing because they are confident that
customers will choose quality over price of the products. They also adopt multi-level marketing
and promote their product by taking part in events and demo sessions to increase their brand's
visibility.

3.2 Nutshell of the story

IFB is an impressive and reputed Indian brand which is the right example of “Vocal for Local”
Indian campaign to accomplish a goal of ‘Made in India’. IFB invests in technology
development and product innovation to make their product quality superior over its peers. The
Journey of IFB is praiseworthy and commendable as they don't invest in advertisement but
considering other Indian brands, they made a strong impact on Indian consumers. IFB is yet to
gain a notable market share in other segments, as they are still lacking in creating brand
awareness. Nevertheless, today the company has come a long way and positioned itself as the
market leader in the front load washing machine segment, they have a high growth potential
and the growth trajectory of a company speaks there's many more to achieve.

As per the analysis of the washing machine market, IFB has started developing machines in
this market that are being powered by the smart technologies such as Artificial Intelligence and
they are focusing on producing and delivering products that are efficient, sustainable and
smarter.

The strategies adopted by IFB are strong focus on the quality of products and innovative
designs that attract the customers for the products delivered to their customers in the market,
by providing easy mode of payment and timely delivery of products. The online distribution
channel had a significant growth in the year 2018 as there was an increase in the sales of
refrigerator, washing machines etc by witnessing through this channel.

The strategy used by IFB company are by providing 10year motor warranty and are designed
to last for many years. They provide a comprehensive warranty of 4 years on the product sold
and providing 10 years support on spare parts.

29
IFB focuses on improving in few sections which possess very low penetration level & higher
potential by introducing newer models or update with new energy and water saving
technologies equipped in the products.

IFB’s front load washing machines are provided with better wash quality technology that are
similar to a laundry wash, due to the tumble motion, higher revolutions per minute (RPM) that
increases the cleaning efficiency & built-in water heater for better stain removal of the clothes,
having lower power consumption units and a better voltage management system.

3.3 Technology update

Advancements in technology & innovation related to washing machines present huge

opportunity for the manufacturers in this segment. The launching of smart washing machines
in the market has led to the increase in demand for washing machines in the market, Wi-Fi
being extensively used in these automatic washing machines. This feature is being explored to
establish radio communication with smartphones to bring them into proximity. Auto optimal
wash, eco check, smart control, smart diagnosis, automatic detergent dispensing & other
features have been launched to sustain in the market. Many models have incorporated with
self-cleaning elements and these features are often used for soaking & high-speed spinning to
clean them without any use of chemicals. Programs having quicker cycles, running with similar
efficiency are been added, taking into consideration of the busy lifestyle of consumers. IFB has
introduced quick wash programs (such as 15 min wash or 30 min wash) for quicker washing
of clothes. The present segment of washing machine is in the twin drum age (twin washers and
dryers)

Consumers are getting many new options like lower energy usage, optimize wash cycles and
control the cycles through remote. The fresh air technology is also the popular technology used
in these washing machines for the induction of fresh air into these machines and heating the air
to dry the clothes.

SKF India has come into partnership with IFB industries for providing the Drum Support Unit
(DSU) for manufacturing the washing machines. This DSU are the latest solution from SKF
India to improve the performance, comfort and energy saving of the washing machines and
manufacturer domestic washing machines, with an annual volume of producing 3 lakh units
per year in Bangalore unit of SKF India under constant pressure to meet the target and have a

30
control over production costs in the face of increasing costs of raw materials. The SKF drum
support can be the alternative for aluminium or cast-iron solutions. This SKF drum unit comes
with the integrated bearings that are greased & sealed for life, which leads to number of
assembly operations are reduced and no additional machining operations are required. DSU are
lighter than compared with other metals, robust, compact, and also low maintenance design.
DSU helps in reducing the manufacturing and assembly costs & efforts while delivering to the
end users.

IFB washing machines comes with child lock and a time delay feature that lets the consumer
to choose the start time of wash as per the convenience. The ball valve technology and crescent
moon drum to ensure quick and effective washing of clothes. Reverse tumble that reduces
creases and makes ironing clothes easier and the 3D wash system that cleans the clothes deeply,
an express wash mode for lightly soiled clothes and an air bubble function that uses aeration to
remove stains. IFB washing machines are equipped with latest technologies such as Triadic
pulsator, crescent moon drum and aqua spa therapy.

IFB provides wide range of washing styles

• Air bubble wash

• 360degree wash

• Cradle wash

• O2 wash

• Steam wash

IFB has started to localize some of their high-cost import as a de risking mechanism against
the future currency depreciation impact on the business. IFB’s localisation initiative had led in
a new generation of this electronic components for the models to be manufactured in India.
The company will localize manufacturing of inverter range of the Air Conditioners and their
fixed speed with the project planned to deliver their commercial production in GOA.

31
3.4 Risk Management Process

The Board of Directors and the management ensures that the risk management process of the
organization is monitored, formulated & implemented. The company has constituted a
committee for risk management.

The 3 phases of Risk Management Process are: -

Risk assessment: - It is an on-going process and consists of risk identification and prioritisation.

Risk mitigation: - This process helps to identify reasons and drivers for the existing risk and
development of mitigation plans with defined responsibilities, action plans.

Risk monitoring & reporting: - This process aims at providing assurance to the committee,
board of directors and the audit committee on the effectiveness of risk management system.

3.5 CSR activities under IFB industries are: -

• Maintaining greener society

• Proper sanitation & making safe drinking water available to the people

• Eradicating hunger, malnutrition and poverty

• Improvement in hygiene and health practices across the globe

• Promoting education

• Improving school facilities located in villages

• Rural development project

• Project on disability management

CSR contribution is 2 % of their average net profit of the organization as per sec135(5) of
Rs.156.54 lakhs. The exceeded amount over CSR is Rs.33529

32
 Chapter 4

FRAMEWORK

4.1 Mckinsey 7s model

Mckinsey 7s model is a strategic planning tool, designed to help the business to understand if
the business is in accordance in a way that allows it to achieve its objectives. This model states
that the 7 factors should remain in harmony to bring a change & be successful in the market.

The 7 factors are inter connected with each other, if there is a change in any of the factor it
would have impact on all the other factors. All the factors are equally important and do not
have a hierarchy to be followed in any business. The factors are categorized as hard areas and
soft areas. The hard areas are easy for the management to influence and change, and the soft
areas depending upon the corporate culture.

As the shared value lies at the centre and are vital to each other element in the organization and
can have an impact invariably. The hard elements are Structure, Strategy, Systems, the soft
elements are Values, Skills, Style and Staff.

This was developed in the early 1980’s by Tom Peters and Robert Wayerman, the 2 consultants
working at the Mckinsey consulting firm in United States to diagnose the causes for
organizational problems and to formulate the programs for improvement. This model helps in
improving the performance of the organisation, and also examine the likely effects of further
changes within the organization, alignment of various departments and processes during a
merger or acquisition and determining how to implement a proposed strategy.

33
Strategy

Strategy is a plan developed by the organization (IFB) to achieve the target & sustain the
competitive advantage and successfully compete in the household appliances market. In
general, a sound strategy is long term which helps to achieve competitive advantage & is
reinforced with a stronger vision and values. Short term strategy is usually a poor choice for
the organization, but it is aligned with 6 other elements. Establishing a long-term strategy aligns
with other elements of the model and clearly communicates the organizations objectives and
goals. This talks about organization’s goals, resources required to accomplish the goal, unique
selling product and how does the organization adapt to changes.

Strategies adopted by IFB industries is updating to the latest technology as time moves,
provide wide variety of products with better quality and after sales service with warranty and
guarantee period. The organization’s strategy is to focus on the existing customers and
manufacturer newer goods in various other segment’s and selling it to the existing customers
or the loyal customers of the Organization. IFB competes with other organization by being
updated with the technology very frequently (Automation, Artificial Intelligence). The other
strategy of IFB is to manufacture products which are affordable by the middle-income group

34
people and not only focusing on premium products. R&D are the strategic importance to the
company, as it operates in a competitive environment where the technology is a key driver.

Structure

Structure of the company is made of corporate hierarchy, chain of command, authority &
responsibility and divisional makeup that portrays how the operational functions should be
carried and interconnected. It states the management configuration and responsibilities of the
workers in the company.

The organization structure is from top management to lower management in IFB industries,
which follow the guidelines issued by higher authorities. The IFB Industries have the
hierarchical structure organized in the organization. The corporate culture at IFB involves a
strong team spirit, supporting each other and the flat hierarchies in their day-to-day life is
followed. The decision and suggestions are collectively collected and analysed and not
autocratic decision making.

Systems

Systems are the processes and procedures of the company, which states daily activities and
how the decisions are made by the top management officials in IFB company. This is the area
of the organization that determines how business are done and it should be the main focus for
the managers during the organizational change.

IFB uses Quality Management Systems to meet the quality policy, corporate quality and unit
level quality structure, IFB has adopted European Foundation for Quality Management.

Shared values

IFB industries has created certain norms and values which every member of the organization
needs to follow. These principles are known as shared values and acts as a foundation for the
organization.

• Always look at the ways to make it easier to conduct business with IFB

• Communication with customers.

• Eliminate bureaucracy

35
 • IFB supports anti-corruption practices and demonstrates it by participating in Global
Compact of United Nations which includes Anti-corruption principles.

These are some of the shared values of IFB industries that are followed by each and every
employee of the company
Skills

The skills factor here is the ability and attributes of the employees of the organization. This
determines the quality and speed for the competition of given task. IFB has historically invested
in its talent pool and have been able to attract the brightest and the best with a base of 42000
skilled and committed employees in the organization. IFB has been the largest engineering and
manufacturing enterprise in India operating from over 40 years and manufacturing more than
180 products. The major areas of skills focused by IFB are, transportation equipment, hydro
power, control equipment’s etc

Staff

Staff element is concerned with what kind of employees in the organization needs to be
recruited, trained, motivated and rewarded. The employees in IFB have a thought-provoking
environment which makes the daily challenges more rewarding. IFB provides continuous
training, career planning and positive work culture and participative style of management for
its employees.

IFB believes in “A high performing team in the company pairs the drive to create the amazing
with the innate instinct to work together”

IFB consists a team of over 3000 people who serve the 6 million happy customers across 2400
locations.

Style

This element talks about the approach that the management takes in leading the organization,
as well as influences the productivity, performance and the corporate culture. IFB being a
public sector unit there is no opportunity for grievances while making decisions regarding any
problem or project. There is no Autocratic Style of leadership, IFB believes in participative
style of decision making because the decision generated is favourable to everyone and it could
be the best.

36
4.2 SWOT analysis

Strengths Weakness
• Brand image in Home Appliances Division • Less brand awareness
• Various models to choose • AMC
• Better after sales service • Availability of non-seasonal products

Opportunities Threats
• New launches by the company • Rise in competition
• Building trust with the customers • Increasing pricing of raw materials

• Scope for growth in the market • Threats from Competitors

Strengths

Brand image in home appliances division: - IFB is well known as a brand in home appliances
sector in India, it is a leading market segment with a majority of customers preferring IFB as
their first choice.

So many models to choose: - IFB offers various models having different characteristics or
features with pricing being different from one another, so that even the high class, middle class
and the upper middle-class people can purchase IFB products. The company is financially
sound and can expand and grow in the rural areas also.

IFB products are actually innovative and technically sound in Indian market, so that they would
turn to be a monopoly in the dishwasher & clothes dryer with the maximum market share. This
technological innovation attracts the customers of higher-class people for more luxurious life
style. IFB has a compatible workforce that works as a team to serve their customers.

Strong after sales service: - The company is well known for its after sales service to its
customers under warranty or guarantee or the scheme like AMC (Annual Maintenance

37
Contract) many more. IFB provides 4 years warranty and 10 years spare parts support for the
products sold by the organization.

Wide distribution network in and around the country: - IFB covers all the rural and urban areas
in each and every state and franchises in each state.

Weakness

The products are priced a bit higher than other brands as they provide smarter products with
features.

The annual maintenance contract and the spare parts for the products are costly, that indicates
chances of losing their new customers in the market

IFB does not perform any promotional activities for promoting their products. There is no
advertisement that presents the features & variety of products available under IFB. This leads
to very low sales of Hobs, Chimneys because people are unaware of these products like
washing machines, ovens etc

IFB has less range of products that are not sufficient to capture the entire market and some of
their products are ready to be launched in coming times, but some small appliances such as
iron box, heater, etc can be added in their products list.

Products are not specifically available for summer season, products for summer season are
available (clothes dryer).

Less brand awareness among the customers.

Opportunities

IFB has not yet covered the entire Rural market in India, as most of the people reside in rural
areas, IFB has a wider scope to expand their market in rural market for expansion. IFB can
enter into their market by launching new low-priced products that are useful like Chargeable
lamps.

New launches can bring new customers to their company and also bring revenue for the new
launches.

The trust in company’s product by valued consumers: - product quality, brand name and latest
technology etc builds the trust in company’s products by the value customers and helps in
promotion of other new products.

38
Threats

Growth of Indian economy together with reduction of import duties, new entries to the market,
creates a competitive pressure on the company as a major market shareholder. As the
competitors are present in the market with low priced products the company faces threats from
its competitors.

The significant rise in material cost and exchange fluctuation that drastically impacts the
margin of profit for the company.

39
4.3 PESTEL analysis

This analysis deals with the challenges the IFB industries can overcome and how the various
forces can have an impact on its business in the international market. PESTEL is an acronym
for 6 important forces which have an impact on international businesses in this 21st century.
These 6 forces are Political, Economical, Socio-cultural, Technological, Environmental, and
Legal.

Political factors are: -

The taxes levied on raw materials imported by IFB from other countries are very high and the
cost is paid by the IFB group, which initially affects the business profits and the import taxes
is recovered by increasing the price of goods to the customers. Constructing plants or factories
in areas (Bhopal & Goa) is encouraged where the government provides tax incentives to the
company.

Schemes related to export and import of goods by the Indian Government.

Bureaucracy, Government policy, foreign trade policy, tax policy, labour law, trade restrictions
are some of the political factors.

Economical factors are: -

Increase in the per capita income of a person has a direct impact on the products of IFB as
people have the capacity to purchase the product.

Higher GDP, unemployment rates and high disposable income of a person. Increasing spending
power of the Individual

Inflation leads to increase in prices of all the goods and services and people tend to move back
from purchasing any new product.

Economic factors are determinants of a certain economy’s performance, these include

economic growth, exchange rates, inflation rates, unemployment rates. This factor would have
a direct or indirect impact on the organization, since the purchasing power of consumers could
change the demand and supply models in the economy.

Socio-cultural factors: -

Manufacturing goods which are greener in nature and are not harmful to the environment and
are easily disposable and reusable in nature are encouraged.

40
Increasing lifestyle and comfort, cultural aspects and perceptions.

This factor states that the local workforce and its willingness to work under certain conditions.

Technological factors: -

Quality of the product has been increased due to the technical knowledge of the consumer;
consumer prefers the products that are technological updated. Innovation has made the
electronic product more featured.

Investment on R&D activity for innovation has been increased every year for the update
required.

Automation and these factors may influence decisions to enter or not enter certain industries
or to outsource production activities.

Environmental factors: -

Environmental factors are the important factors due to the availability or the increasing scarcity
of raw materials, pollution targets and carbon footprint set by the government. This factor
includes environmental aspects such as weather, climate, climate change would be affecting
industries.

Legal factors: -

These factors include more specific laws such as employment laws, patent laws, consumer
protection laws, discrimination laws, safety laws etc. It is stated that the organizations need to
know about the various laws in order to trade successfully and ethically. Trading globally
requires set of rules and regulations of each country. Legal advisor or attorney are been hired
by the organization to look after these matters.

Industry regulations, Licenses and permits, Intellectual property.

41
4.4 Financial Statement Analysis

Financial analysis refers to analysis of financial statement of a company to comment on its

financial position. This includes the evaluation of income statements, cash flows and balance
sheet to examine the current financial performance and also predicting the future performance
and enable the company budgeting activities by analysing trends, ratios and risk. Paid up capital
of the company is Rs 4,128 lacs, turnover is Rs 2,73,566.

Comparative income statement for the years 2020 and 2021

Particulars 2020 2021 Increase or % Change

(Amount in (Amount in decrease
lakhs) lakhs)
a. Revenue from 2,63,697 2,80,080 16,383 6.21
operations
b. Other income 1,250 2,236 986 78.88
c. Total income 2,64,947 2,82,316 17,369 6.55
d. Expenses
Cost of Raw Materials 1,03,621 1,23,639 20,018 19.32
consumed
Purchases of stock in 39,208 35,129 (4079) (10.40)
trade
Changes in inventories 6,544 (2,307) (8851) (135.25)
Employee benefit 29,888 30,693 805 2.69
expenses
Finance costs 1,609 3,091 1,482 92.10
Depreciation and 9,195 10,242 1,047 11.38
amortisation expense
Other expenses 72,355 71,938 (417) (0.57)
Total expenses 2,62,420 2,72,425 10,005 3.81
e. Profit before 2,527 9,891 7,364 291.41
exceptional items
and tax
f. Exceptional items 148 - (148) (148)
g. Profit before tax 2,675 9,891 7216 269.75

42
 h. Tax expense
Current tax 178 3,763 3,585 2014.04
Deferred tax (80) (283) 200 250
98 3,480 3,382 3451.02
Profit for the year 2,577 6,411 3,834 148.77
Other incomes
(Comprehensive income)
Items not reclassified as (656) (68) 588 59.63
loss or profit
(Remeasurements of the
defined benefit plan)
Tax related to the items (6) 25 31 516.67
not being reclassified

Profit or loss after 181 (14) (195) (107.73)

reclassification of items
(exchange differences in
translating the financial
statement of foreign
operations)
Tax related to items that - -
are reclassified to profit
or loss
Total of all other (481) (57) 424 88.15
comprehensive incomes
Total comprehensive 2,096 6,354 4,258 203.14
income for the year
EPS
Face value of Rs10/each
share
a. basic 6.76 15.61 8.33 120.55
b. diluted 6.76 15.61 8.33 120.55

43
Comparative balance sheet for the years 2020 and 2021

Particulars 2020 2021 Increase or % Change

decrease
(In lakhs) (In lakhs)

Assets

1. Non-current assets

(a) PPE (property, Plant, 49,146 52,824 3,678 7.48

Equipment)

(b) Capital work-in-progress 887 1,883 996 112.28

(c) Right of use assets 6,808 6,834 26 0.382

(d) Investment property 11 11 - -

(e) Goodwill 2,381 2,361 (20) (0.83)

(f) Other intangible assets 4,114 3,338 (786) (19.10)

(g) Intangible assets under 96 232 136 141.67

development

(h) Financial assets

(1) Investments - 225 225 225

(2) Loans 55 51 (4) (7.27)

(3) Others 2,397 1,772 (625) (26.07)

(i) Income tax assets 1,834 9 (1825) (99.50)

44
(j) Other non- current assets 4,461 1,229 (3,232) (72.45)

2. Current assets

(a) Inventories 38,338 46,228 7,890 20.58

(b) Financial assets

(1) Investments 15,280 25,822 10,542 68.99

(2) Trade receivables 20,454 26,569 6,115 29.89

(3) Cash and cash 10,487 9,829 (658) (6.27)

equivalents

(4) Other bank balances 2,023 2,419 396 19.57

(5) Loans 55 53 (2) (3.64)

(6) Others 436 336 (100) (22.93)

(c) Income tax (assets) - 645 645 645

(d) Other current assets 7,204 6,471 (733) (10.17)

Total assets 1,66,467 1,89,141 22,674 13.62

Equity & Liabilities

Equity

(a) Share capital 4,128 4,128 - -

(b) Other equity and non- 60,526 65,460 4,934 8.15

controlling interests

Liabilities

45
1. Non – current liabilities

(a) Financial liabilities

(1) borrowings 25,372 17,156 (8,216) (32.38)

(2) lease liabilities 4,413 3,894 (519) (11.76)

(3) Other financial 26 45 19 73.07

liabilities

(b) provisions 6,551 5,912 (639) (9.75)

(c) deferred tax liabilities 1,129 2,676 1547 137.02

(d) Other non-current 1,669 2,562 893 53.50

liabilities

(2) Current Liabilities

(a) Financial Liabilities

(1) Borrowings 3,515 2,664 (851) (24.21)

(2) Lease liabilities 1,508 2,090 582 38.59

(3) Trade Payable

(A) Outstanding dues of 2,517 10,141 7624 302.90

small and micro
enterprises

(B) Outstanding dues of 44,793 55,406 10,610 23.68

creditors other than
small and micro
enterprises

46
 (4) Other financial 2,549 5,271 2,722 106.78
liabilities

(b) Other current 7,330 11,054 3,724 50.80

liabilities

(c) provisions 428 607 179 41.82

(d) Income Tax - 75 75 75

Total equity & liabilities 1,66,467 1,89,141 22,674 13.62

For the financial year ended as on march 31 2021, the revenue of IFB has increased to 2,80,080
at a rate of 6.21% as compared to the financial year 2020. The profit before tax and exceptional
items has increased by more than 3 times from the year 2020. The profit after tax has also been
in the increasing rate. The useful life of all the assets ranges from 3 to 30 years. The estimated
life of intangible assets is estimated at 3 to 10 years of life.

47
48
 4.5 RATIO ANALYSIS

Liquidity Ratios

Current Ratio = Current asset/ current liabilities

Year Current Ratio

2019 1.447
2020 1.505
2021 1.35

Inference: As we can see that the Current Ratio (Current Assets/Current Liabilities) has been
increasing and declining, it shows a depressing financial strength of the organization.

Quick Ratio= Quick asset / current liabilities

Year Quick Ratio

2019 1.03
2020 1.19
2021 1.23

Inference: It indicates that the organization is gaining the potential to pay back its current
liabilities.

Leverage Ratios

Debt Equity Ratio= Long term debt/ Equity

Year Debt Equity Ratio

2019 0.989
2020 0.39
2021 0.246

Inference: As we can observe that the long-term debt is not being increased yearly, it is gaining
potential to pay back its long-term borrowings. Formula for calculating is Long term
borrowings/ shareholders fund.

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Shareholders Equity Ratio: Shareholders Equity/Total Assets

Year Shareholders Equity

Ratio
2019 1.908
2020 1.137
2021 1.131

Inference: as we can observe that this ratio indicates the degree to which the unsecured creditors
are protected against loss in the event of Liquidation. There is no reduction in the shareholders
fund over the tangible assets.

Turnover Ratios

Asset Management Ratio: Sales / Average Inventory

Year Inventory Turnover Ratio

2019 6.74
2020 6.699
2021 6.624

Inference: As we can observe that the inventory turnover ratio is decreasing in the year 2021,
it states that either the inventory is growing or the sales are dropping when compared to other
financial years.

Fixed Assets Turnover Ratio: Sales/Fixed assets

Year Fixed assets turnover ratio

2019 5.927 times
2020 3.65 times
2021 3.96 times
Inference: As we can observe the data the increase in the fixed assets figure may result in
replacement of the asset at an increased price.

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Profitability Ratio

Gross Profit Margin: Gross Profit/Sales

Year Gross Profit Margin

2019 2.81
2020 0.958
2021 3.53

Inference: As we can observe that the gross profit margin has been decreasing and increasing
as proportionately with the increase and decrease in sales.

Net Profit Margin: Net profit before interest & tax/sales*100

Year Net Profit Margin
2019 3.54 times
2020 1.01 times
2021 3.53 times

Inference: this ratio projects the trend in net profit margin of the company and its
performances. As the Net Profit being increased at a higher rate it would show that the
performance of the organization at a higher growth.

Earnings Per Share: Net profit after tax/no of equity shares

Year EPS
2019 18
2020 6.76
2021 15.61

Inference: EPS is one of the important ratios which measures the net profit earned per share.
A steady growth in EPS would indicate a good track of profitability.

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 Chapter 5

KNOWLEDGE ACQUIRED DURING THE ORGANIZATIONAL

STUDY

This organizational study is totally desk research on the company IFB household appliances.
This is totally a secondary source of information collected from secondary sources and from
the company’s websites. I have done this desk research with the help of subjective knowledge
and through external sources (internet). This organizational study has helped me in gaining an
insight of the industry profile of the consumer electronics and the household appliances
industry. The major department of IFB industries Ltd is the Research and Development.

IFB provides Supportive Senior Management with excellent opportunity of learning to their
employees, with exposure to new technologies (i.e., German Technologies) and there evolves
a technical discussion irrespective of the positions or designation. IFB is a knowledge driven
organization and their asset is the experience and skill of their employees. IFB offers a wide
range of career development programs (job training, job rotation etc.) IFB believes that they
will have a highly motivated work force by investing in these programs and the company has
also offered shares to the eligible employees under the Employees Stock Purchase Scheme.

The organization aims at protecting their innovations with the help of Patents and Trademarks.

IFB has various different strategies to be the first priority to the customers, they count on word-
of-mouth marketing tool as it is a free advertising tool, which gets triggered when the customer
experience exceeds expectations and encourages others by this word-of-mouth marketing
publicity. IFB’s expenditure on marketing is very less when compared to other brands. IFB has
adopted to multi-level marketing and promote their products by taking part in events and demo
sessions to increase their brands visibility.

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 Chapter 6

Bibliography

1) An organization study at IFB Industries LTD, Bangalore, published by

Rahul(slideshare.net)
Link: https://www.slideshare.net/RahulG39/an-organisation-study-at-ifb-industries-
ltdengineering-division-bangalore
2) E-waste management, published by IFB
Link: https://www.ifbappliances.com/e-waste
3) Financial Report for the year 2021, published by IFB
Link: https://www.ifbindustries.com/assets/Q1_Financial_Report_June_2021.pdf
4) IFB industries Ltd, published on money control.com
Link: https://www.moneycontrol.com/financials/ifbindustries/balance-sheetVI/IFB02
5) IFB project, published on pdfslide.net
Link: https://pdfslide.net/documents/ifb-project.html
6) IFB household appliances Ltd, official website
Link: https://www.ifbappliances.com
7) Project on IFB, published by Nahid, 2012
Link: https://www.slideshare.net/nahid786khan/project-on-ifb

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