• EBITDA margin drivers: Despite Q4 EBITDA margins declining to 4% from 11%, management expects medium-term normalization driven by component backward integration, localization, and an expanding share of non-AC appliances.
• Cost pass-through: Commodity and forex cost inflation is regularly passed on to brand customers through quarterly adjustments, though short-term forex volatility could cause a 0.5% to 1% margin variance.
• Inventory normalization: Inventory days increased from 90 to 130 days as the company pre-stocked compressors ahead of an April 14 BIS regulatory cutoff, with inventory expected to normalize by the end of Q1.
• Growth and diversification: Management expects to outgrow the AC industry's projected 12% to 15% annual growth while continuing to scale small and large domestic appliances, which grew approximately 60%, to balance seasonal revenue in Q2 and Q3.
• PLI benefit recognition: After accruing ₹32 crore across three quarters of an expected ₹56.5 crore annual incentive, the company conservatively deferred final PLI accrual recognition due to Q4 AC volume de-growth pending departmental certification.