💰 Financial Performance

Revenue Growth by Segment

The Sewing Machine Business recorded revenue of INR 319 Cr in FY 2024-25, representing a growth of approximately 3.5% YoY from INR 308.2 Cr. The Home Appliances segment faced challenges with operating losses, leading to a strategy of exiting thin-margin sales channels. Overall revenue for FY 2024-25 was INR 431.7 Cr, up 1.5% YoY.

Geographic Revenue Split

The company maintains a Pan-India presence with a network of 10,000+ retail points and 6,300+ dealers/distributors. While specific regional percentage splits are not disclosed, the company is exploring a new manufacturing facility to cater to both domestic and global demand.

Profitability Margins

Net Profit Margin improved to 1.71% in FY 2024-25 from 1.06% in FY 2023-24, a 61.32% increase. Gross Margin for Q2 FY 2025-26 stood at 38.1%, up from 30.5% in Q2 FY 2024-25, driven by the removal of loss-making SKUs and product portfolio strengthening.

EBITDA Margin

EBITDA for Q2 FY 2025-26 was INR 5.9 Cr, representing a 153.9% YoY increase from INR 2.3 Cr. However, H1 FY 2025-26 EBITDA saw a slight decline of 7.2% YoY to INR 3.5 Cr due to higher operating expenses and investments in R&D.

Capital Expenditure

The company is exploring the establishment of a new manufacturing facility in India to meet domestic and global demand. SVP Worldwide is providing capital to finance this factory and product development, though the specific INR Cr value for the total planned outlay is not disclosed.

Credit Rating & Borrowing

CRISIL downgraded the company's ratings to 'CRISIL BBB-/Stable/CRISIL A3' in November 2024 from 'CRISIL BBB/Negative/CRISIL A3+'. Interest coverage ratio improved to 32.97 in FY 2024-25 from 18.89 in FY 2023-24 due to lower interest costs and higher EBIT.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include cast iron (for traditional black machines), steel, and plastic components for home appliances. The exact percentage of total cost for each material is not disclosed.

Capacity Expansion

Current manufacturing facility is located in Jammu. The company is actively exploring a new facility in India to cater to global demand and modernize production of sewing machines.

Raw Material Costs

Raw material costs are a significant variable; rising costs are identified as a key risk. The company uses value-engineering and product optimization to mitigate these costs, though specific YoY cost change percentages are not provided.

Manufacturing Efficiency

The company is transitioning from traditional 'black machines' to high-margin Zig-Zag and Industrial machines to improve segment profitability, which declined from INR 37 Cr to INR 34 Cr in the sewing segment due to R&D investments.

Logistics & Distribution

Distribution is handled through 1,800+ dealers/distributors (expanding to 6,300+) and 10,000+ retail points. The company is enhancing its E-commerce presence to optimize distribution costs.

📈 Strategic Growth

Expected Growth Rate

30.4%

Growth Strategy

Growth will be achieved by transforming the brand from traditional sewing machines to a modern lifestyle brand, expanding the E-commerce footprint, launching energy-efficient BLDC fans, and establishing a new manufacturing facility to serve global markets. The company is also focusing on high-margin industrial-grade machines.

Products & Services

Sewing machines (Straight Stitch, Zig-Zag, Industrial, Artisan), Home Appliances (BLDC Fans, CloudX Fans), and after-sales services through 440+ service centers.

Brand Portfolio

Singer, Merritt.

New Products/Services

Launched Zig-Zag machines and CloudX Fans with an e-commerce-first strategy. Introduced Double Sealed Ball Bearing (DSBB) technology in Straight Stitch machines to enhance durability.

Market Expansion

Targeting India's low-penetration market through channel expansion and digital customer engagement. Exploring global market exports via new manufacturing capabilities.

Market Share & Ranking

Singer is a pioneer with a 174-year legacy in the sewing machine industry; specific market share percentage is not disclosed.

Strategic Alliances

Partnership with SVP Worldwide (brand owner of Singer) which is investing capital into Singer India for factory and product development.

🌍 External Factors

Industry Trends

The industry is shifting from manual 'black machines' to electric Zig-Zag and industrial-grade machines. The consumer durables sector is seeing intense competition and consolidation, with a growing trend toward energy-efficient appliances like BLDC fans.

Competitive Landscape

Faces intense competition from large consumer durable players and unorganized local manufacturers, leading to thin operating margins in the appliances segment (0.57% in FY24).

Competitive Moat

The moat is built on a 174-year-old brand legacy, a robust distribution network of 10,000+ retail points, and deep customer trust. This is sustainable due to the high replacement cost of establishing such a vast physical service and dealer network.

Macro Economic Sensitivity

Sensitive to government initiatives for women's empowerment and rural employment, which drive demand for sewing machines. Inflation in raw material prices directly impacts operating margins.

Consumer Behavior

Shift toward e-commerce and demand for multi-functional sewing machines (Zig-Zag) for hobbyists and professional garment makers.

Geopolitical Risks

Exposure to cheap imported products is a risk; the company relies on regulatory Quality Control Orders (QCO) to mitigate this.

⚖️ Regulatory & Governance

Industry Regulations

Adherence to Quality Control Orders (QCO) to restrict low-quality imports. Compliance with SEBI (LODR) Regulations 2015 for corporate governance.

Environmental Compliance

Focus on sustainability through energy-efficient BLDC motor fans and initiatives encouraging garment reuse.

Taxation Policy Impact

Effective tax rate resulted in a PAT of INR 7.39 Cr from a PBT of INR 10.04 Cr in FY 2024-25 (approx. 26.4%).

Legal Contingencies

The auditor's report mentions supplier-related matters in Note 42, but specific INR values for pending litigation or court cases are not detailed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to sustain operating margin improvements above 2% amidst intense competition. CRISIL notes that a decline in margins below 2% could impact net cash accruals.

Geographic Concentration Risk

Revenue is primarily domestic (India), with a focus on expanding the dealer network across all states.

Third Party Dependencies

Dependency on a network of 1,800+ dealers and distributors for revenue generation.

Technology Obsolescence Risk

Risk of traditional sewing machines becoming obsolete; mitigated by investing in Zig-Zag and industrial-grade technology.

Credit & Counterparty Risk

Receivables management has improved, with the Debtors Turnover Ratio at 10.82, indicating healthy collection cycles.