Chain Reaction: Can anti-dumping duty against Chinese imports spark a turnaround for IFB Industries?

In an era when policy interventions are increasingly shaping business destinies, a quiet but decisive move by the Indian government may have just rewritten the script for one of India’s most familiar industrial brands. On 25 March, the ministry of finance imposed a definitive anti-dumping duty on roller chain imports from China.

While the policy targets unfair trade practices, its implications reach far deeper—potentially igniting a long-awaited turnaround for IFB Industries Ltd.

Shares of IFB jumped over 3% following the announcement, signalling investor enthusiasm. But a quick glance at the charts reveals that the excitement comes with tempered expectations.

The stock is still over 45% lower than its peak last year, a reflection of the turbulence it has faced in both its consumer and industrial segments. And yet, this anti-dumping measure could be the catalyst IFB has long needed—a trigger for a broader transformation of its financial fortunes, market standing, and competitive outlook.

Long battle

For years, IFB’s engineering division—an often overlooked but critical arm of the company—was squeezed by an influx of cheap Chinese roller chains that flooded the Indian market. These chains, used in everything from industrial equipment to automotive applications, were imported at prices below their fair market value, making it nearly impossible for Indian manufacturers to compete.

According to data from the Directorate General of Trade Remedies (DGTR), Chinese suppliers at one point accounted for almost 50% of India’s roller chain consumption. Even by FY23, they still held about 28% of market share—an outsized presence for a single country’s exporters.

IFB, long a domestic manufacturer of these components, saw its margins and market share steadily eroded.

Also Read | Tejas Networks sees a sharp recovery. Will the multibagger's dream run continue?

After months of investigation, the DGTR confirmed that the imports were indeed causing material injury to Indian producers. The outcome: an ad-valorem duty of 6.34% on most Chinese roller chain imports, to be enforced for five years unless reviewed earlier.

Interestingly, some Chinese companies were exempt due to negligible dumping margins, but the majority will now face costlier access to the Indian market.

The verdict, in essence, is a victory for IFB—a validation of its complaint and a powerful statement in favour of fair competition.

Gaining ground

With this duty now in place, IFB Industries is poised to recapture lost ground in its home turf. The price advantage that Chinese imports enjoyed is now significantly diminished, levelling the playing field for domestic manufacturers.

This shift isn’t just symbolic. It directly reshapes purchasing behaviour among Indian OEMs and industrial buyers, many of whom had opted for Chinese chains due to lower costs despite concerns over quality and service.

By narrowing the price gap, the duty improves IFB’s appeal to cost-sensitive buyers while enhancing its pricing power. No longer forced to compete with artificially low prices, the company can command better realisation per unit. This should help lift the average selling price across its chain portfolio, boosting revenue without sacrificing margins.

Moreover, IFB holds an edge that imported suppliers simply cannot replicate—speed of delivery, local servicing, and better alignment with India’s regulatory and technical standards. In an industry where reliability and after-sales support matter, IFB’s proximity to customers becomes an additional competitive advantage.

With dumping addressed, these differentiators will begin to carry more weight in buying decisions, particularly in government tenders and private sector contracts where IFB had previously been edged out on cost.

Chance to accelerate

From a financial standpoint, the implications of this duty are far-reaching. IFB’s engineering division, which includes its roller chain operations, generated approximately 19% of the company’s total turnover in FY24. With Chinese imports now curbed, this segment stands to benefit significantly.

According to analysts, even partial substitution of the 8,700 metric tons of Chinese roller chains imported in FY23 could add hundreds of crores of rupees to IFB’s topline. This influx of demand, combined with better pricing, is expected to improve the company’s operating margins.

Before the duty, IFB was forced to absorb pricing pressure from dumped imports, which inevitably hurt profitability. Now, with the competitive intensity lowered, the company has room to improve margin contribution from its core products.

Also Read | Voltas rides the summer wave. But is the stock still a cool bet?

There are already signs of financial momentum. In the third quarter of FY25, IFB reported a 9.36% year-on-year increase in revenue, reaching ₹1,269.5 crore.

Net profit jumped over 78% to INR 31 crore, and the engineering division—while growing at a modest 2.7%—is expected to benefit more substantially in subsequent quarters as the impact of the duty is fully realised. The company is also pursuing an aggressive ₹200 crore cost-reduction plan in partnership with Alvarez & Marsal, which is expected to bear fruit over 12 to 18 months.

Recovery in motion

Despite the financial improvements, IFB’s stock performance has not kept pace. The shares had tumbled from a 52-week high of ₹2,359 on the BSE to a low of ₹1,014 earlier this year. At ₹1,294.20 at the close on 25 March, the stock traded at roughly 46x trailing earnings—a level that suggests investors are cautiously optimistic but awaiting clearer signs of a full turnaround.

The announcement of the anti-dumping duty injected some much-needed optimism. On the day following the announcement, IFB’s shares climbed as much as 3% intraday before cooling off.

Analysts at Keynote Capital now forecast that IFB’s net profit will more than double—from ₹72 crore in FY24 to ₹185 crore by FY26—on the back of both appliance recovery and engineering growth. Importantly, these forecasts were made before the anti-dumping duty was finalised, suggesting room for upside if the policy boost translates into meaningful market share gains.

Competitive landscape

IFB’s gains don’t come in a vacuum. Other Indian manufacturers, particularly those focused on roller chains, also stand to benefit.

Among them is L.G. Balakrishnan & Bros (LGB), known for its “Rolon" brand of chains and sprockets. However, the nature of LGB’s business—primarily focused on the automotive OEM segment—means that it was less exposed to Chinese competition than IFB, which serves the more price-sensitive industrial segment.

IFB, having borne the brunt of Chinese dumping, now finds itself better positioned to seize the opportunity created by the duty. While LGB will see modest benefits, IFB could experience a more pronounced uplift in both revenue and margins. That said, both companies are expected to benefit from a more stable pricing environment and stronger domestic demand.

Lingering risks

While the duty brings clear benefits, it also introduces new challenges. At just 6.34%, the duty is moderate—sufficient to increase prices, but not necessarily enough to eliminate all unfair pricing.

Moreover, some Chinese exporters have been exempted due to negligible dumping margins. They could potentially capture market share vacated by others, keeping the competitive pressure alive.

Also Read | India levies anti-dumping duty on 5 Chinese goods. Here’s why

There’s also the risk of circumvention. History shows that exporters often find ways to bypass duties, either by rerouting shipments through third countries or altering product specifications. The government will need to stay vigilant and ready to extend anti-circumvention measures if needed.

Execution risk looms large, too. IFB has ambitious plans to triple its industrial business in three years. To do that, it will need to scale quickly and maintain quality. If it fails to meet rising demand, competitors—domestic or foreign—could step in.

Finally, the duty is time-bound. In five years, it may expire unless extended. That gives IFB a limited window to strengthen its competitive edge and prepare for a time when protections may no longer exist.

New chapter

Despite the risks, the mood around IFB Industries is changing. The company is executing on multiple fronts—new product launches, plant-level efficiency drives, marketing revamps, and now, benefiting from a favourable policy shift.

What makes this moment particularly critical is the convergence of internal reform and external support. IFB is not simply waiting for policy to rescue it—it is actively rebuilding its foundations.

The anti-dumping duty acts as a catalyst, not a crutch. If the company delivers on its cost-efficiency plans and expands capacity to meet rising demand, the duty could serve as the inflection point that accelerates its turnaround.

This isn't just about one company. The revival of IFB’s roller chain business reflects a larger trend: India is beginning to act more decisively in protecting and nurturing its domestic manufacturing capabilities. For IFB and other players in the engineering sector, that signals a future where quality and competitiveness, not just cost, determine market success.

Road ahead

As IFB Industries steps into this new chapter, much will depend on execution. The company now enjoys a rare alignment of policy tailwinds, financial recovery, and renewed investor interest. But the markets are quick to shift, and the onus is on IFB to translate this opportunity into lasting results.

If it does, the company could not only reclaim its past glory but also emerge as a symbol of what Indian industry can achieve when strategy, policy, and execution are aligned. The anti-dumping duty may have set the gears in motion. Now it’s up to IFB to keep the momentum going.

For more such analysis, read Profit Pulse.

Suchitra Mandal is a proficient financial writer with expertise in delivering well-researched insights and detailed analyses of companies' performance and market trends.

Disclosure: The author did not hold any shares of IFB Industries at the time of writing this article. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to conduct their own research and consult a financial professional before making any investment decisions.

An earlier version of this article erroneously said that IFB had filed a petition for anti-dumping duty on imports of roller chains from China. The error is regretted.