CROMPTON - Crompton Greaves Consumer Electricals Limited Share Price

Crompton Greaves Consumer Electricals Limited, in its earnings call on August 7, 2025, outlined a resilient financial performance for Q1 FY26, with key highlights emphasizing notable gains in market share across various categories. The company reported a standalone revenue of Rs.1,819 crore, with a healthy EBIT of Rs.155 crore and an EBIT margin of 8.5%. The PAT stood at Rs.125 crore with a margin of 6.9%.

Management notably mentioned that the solar pumps segment demonstrated remarkable growth, doubling its business year-on-year and securing a record single order of Rs.101 crore from the Maharashtra Energy Development Agency. Small domestic appliances (SDA) also performed strongly with a robust double-digit growth rate.

On sustainability, the management announced ambitious goals to reduce Scope 1 and 2 greenhouse gas emissions by 50% by 2035 and a 60% reduction in emission intensity related to product sales in their fan category.

However, the company acknowledged challenges in other segments, particularly in fans, air coolers, and residential pumps, primarily due to a shorter summer season and erratic monsoons, which negatively impacted overall ECD performance, leading to an 8% decline in this segment. Despite this, Crompton gained market share compared to the industry, which faced an 11% decline.

Looking ahead, management expressed confidence in long-term demand across categories and noted positive indications of improvement as they move into Q2. They confirmed retaining their guidance of double-digit growth for the Butterfly segment and highlighted ongoing efforts to innovate and enhance their product offerings. The greenfield facility with a projected capex of Rs.350 crore is also anticipated to commence operations in the upcoming years, aimed at strengthening their market position.

Major Questions and Answers from the Q&A Section

1. Question: "Can you provide some color about how has been the growth or decline in the categories like fans, pumps and SDA in the quarter? What percentage of our ECD revenue will be impacted by these seasonal categories?"

Answer: Our ECD business has declined by about 8%, while the industry faced an 11% decline. The decline is largely due to seasonal categories like table and pedestal fans, air coolers, and residential pumps. However, we have doubled our solar pumps business YoY and achieved 15-18% growth in small domestic appliances (SDA), showing our market share expansion across all categories.

2. Question: "Given the unseasonal impact, are we seeing any green shoots of improvement as we move into Q2 for these segments?"

Answer: Yes, we see long-term demand intact across categories. Our recent launches in BLDC fans have driven demand significantly, suggesting recovery in these segments. We are committed to becoming a leading player in the BLDC category, and preliminary market signals indicate that we may see positive momentum in Q2.

3. Question: "Can you share details on the business model and margin for solar pumps? Also, any updates on rooftop solar?"

Answer: We manage solar pumps entirely, with installation done by partners. Margin levels are comparable to other Crompton products. As for rooftop solar, we're building our capability and supply chain and will update you as we secure orders and finalize our launch strategy.

4. Question: "On the ECD segment, barring fans, how do we assess the de-growth and margins, especially compared to peers?"

Answer: While our appliances showed solid performance, the overall margin impact from fans was not as pronounced as perceived. Seasonal products significantly influence our sales mix, and while we've lost some revenue in fans, we've seen market share gains, indicating we are outperforming peers in the same categories.

5. Question: "Will Butterfly achieve double-digit growth this year given a weaker Q1?"

Answer: Yes, we still anticipate double-digit growth for Butterfly. The quarter ended with single-digit growth, but we observe positive trends moving out of Q1 that align with our projections.

6. Question: "What is the capex for the upcoming years, particularly for the greenfield expansion?"

Answer: We plan a Rs. 350 Cr capex for a greenfield unit aimed at both domestic and international markets, with the expenditure spread over the next 2-3 years. Upcoming announcements will clarify the timeline.

7. Question: "On the Lighting segment, can you discuss the sustainability of recent margin recoveries?"

Answer: The margin recovery in our Lighting segment is driven by enhanced product mix, focusing on high-value segments like panels and floodlights. As these segments grow within our portfolio, the sustainability of improved margins looks promising.

These summaries encapsulate the essence of questions posed during the earnings call while extensively covering the management's responses.