Crompton Greaves Consumer Electricals Limited — Q1 FY26 earnings call

Call held 7 Aug 2025

Management summary

Crompton demonstrated resilience in Q1 FY26, outperforming the industry in a quarter marred by seasonal disruptions and erratic monsoons. While the core ECD segment saw a decline, high-growth categories like solar pumps and small domestic appliances (SDA) showed strong momentum. The company achieved zero-debt status and significantly improved profitability in its Lighting and Butterfly segments through better product mix and operational efficiencies.

Highlights

  • Standalone revenue stood at ₹1,819 crores for the quarter

  • EBIT reported at ₹155 crores with an EBIT margin of 8.5%

  • PAT for the quarter was ₹125 crores with a PAT margin of 6.9%

  • Solar pumps business doubled YoY, securing a record ₹101 crore single order

  • Lighting segment EBIT rose 41% YoY to ₹29 crores; margins expanded 370 bps to 12.6%

  • Butterfly revenue grew 3% YoY to ₹187 crores with EBITDA growth of 39% YoY

  • Company became zero-debt after fully repaying a ₹300 crore NCD

  • ECD segment declined 8% YoY, performing better than the industry benchmark of 11% decline

Concerns

  • Seasonal and Weather Volatility

Key financials

  1. Revenue (Standalone) ₹1,819 Cr
  2. EBIT ₹155 Cr
  3. EBIT Margin 8.5%
  4. PAT ₹125 Cr
  5. PAT Margin 6.9%

What they filed

Q1 FY27: revenue up 11.9%, net profit up 15.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,896 1,769 2,061 1,998 1,916 +1%1,898 +7%2,283 +11%2,235 +12%
EBITDA204 188 267 192 158 −23%195 +4%271 +1%224 +17%
Net profit128 112 172 124 75 −41%101 −10%-531 −409%143 +15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • ECD (Electric Consumer Durables)
    -8% Revenue Growth-11% Industry Benchmark Growth
  • Lighting
    ₹232 Cr Revenue₹29 Cr EBIT12.6% EBIT Margin41% EBIT Growth
  • Butterfly
    ₹187 Cr Revenue3% Revenue Growth39% EBITDA Growth
  • Solar Pumps
    100% Revenue Growth
  • Small Domestic Appliances (SDA)
    15% Revenue Growth

Guidance & targets

Margin

  • Butterfly EBITDA Margin Improvement Margin · FY26 · High confidence 100 bps
    Yes, that holds.

    — Promeet Ghosh, MD & CEO

Capex

  • Greenfield Unit Investment Capex · next 2-3 years · High confidence ₹350 crores
    Our indicative capex for that unit is about Rs. 350 Cr. That should be spent in about 2-3 years.

    — Promeet Ghosh, MD & CEO

Other

  • Greenhouse Gas Emission Reduction (Scope 1 & 2) Other · by 2035 · High confidence 50%
    By 2035, we are committing to reducing our Scope 1 and 2 greenhouse gas emissions by 50%.

    — Promeet Ghosh, MD & CEO

  • Emission Intensity Reduction per Unit of Sales Other · by 2035 · High confidence 60%
    Additionally, we are also committing to reduce by 60% the emission intensity per unit of sales of our product by 2035.

    — Promeet Ghosh, MD & CEO

Market context

  • Butterfly Revenue Growth Revenue · FY26 · Medium confidence double-digit
    Yes, that's what we're looking at Umang. The trajectory is good, while the quarter ended at a single-digit growth, but the exit of the quarter already gave us positive indication towards double-digit growth.

    — Kaleeswaran A., CFO

Risks & concerns

  • Seasonal and Weather Volatility

    high

    Shorter summer season and erratic monsoon patterns significantly impacted sales of fans, air coolers, and agri pumps.

    Management acknowledged

  • Lighting Industry Price Erosion

    medium

    Industry-wide price erosion in lighting persists, though Crompton is mitigating this through product mix shifts.

    Management acknowledged

  • Channel Inventory Buildup

    medium

    Unsold seasonal inventory (air coolers/fans) in the channel constrains the ability of partners to invest in other categories.

    Both acknowledged

Areas of evasion (2)

  • Specific revenue contribution percentages for new BLDC fan categories.
  • Detailed breakdown of seasonal vs. non-seasonal revenue mix.

Q&A highlights

3 direct
ECD Segment Performance and Market Share Direct
Our ECD business has declined by about 8%. But when we did an industry benchmark, we saw the industry decline at about 11%.

Confirms that despite a revenue decline, Crompton is gaining market share in its core segment relative to competitors.

Asked by Siddhartha Bera, Nomura

Fan Margins and Seasonal Impact Direct
The overall movement in margins in fan is very similar to the movement in margin products in our ECD business. In fact, it is not at all particularly impacted.

Management clarifies that the margin pressure is due to seasonal mix (TPW fans) rather than a structural decline in core ceiling fan profitability.

Asked by Natasha Jain

Butterfly Growth and Margin Guidance Direct
Yes, that holds [the 100 bps EBITDA margin improvement guidance].

Reaffirms management's confidence in the turnaround of the Butterfly brand despite a slow start to the fiscal year.

Asked by Keshav Lahoti, HDFC Securities

1 min read 5 chapters

Detailed narrative

Resilience Amidst Seasonal Headwinds

Crompton's Q1 FY26 performance was heavily influenced by external weather factors, with a shorter summer and erratic monsoons impacting seasonal categories. The ECD segment saw an 8% decline, which management highlighted was superior to the industry's 11% contraction, indicating market share gains. Despite these headwinds, material margins remained healthy due to sound financial management and adaptability.

Solar Pumps: A High-Growth Engine

The solar pumps business emerged as a standout performer, doubling its revenue YoY. The company secured its largest-ever single order of ₹101 crores from the Maharashtra Energy Development Agency. Management expressed high aspirations for this segment, noting that the addressable market is expanding as the agri market transitions to solar, even without government subsidies.

Lighting Profitability Pivot

Despite industry-wide price erosion, Crompton's lighting revenue remained stable at ₹232 crores. More importantly, EBIT for the segment surged 41% YoY to ₹29 crores, with margins expanding by 370 bps to 12.6%. This was driven by a strategic shift toward B2B, outdoor, and decorative lighting, moving away from low-margin B2C bulb and battery products.

Butterfly Brand Transformation

The Butterfly brand is undergoing a significant refresh, including a new brand positioning and the launch of over 40 new SKUs under the 'Idea First' series. Revenue grew 3% to ₹187 crores, and EBITDA grew 39% YoY. Management reaffirmed its guidance for double-digit growth and a 100 bps EBITDA margin improvement for the full year.

Strategic Capex and Sustainability

Crompton announced a ₹350 crore capex plan for a new greenfield manufacturing unit to be spent over the next 2-3 years. Additionally, the company set ambitious sustainability targets for 2035, aiming to halve Scope 1 and 2 emissions and reduce product emission intensity by 60%. These moves signal a long-term commitment to both capacity expansion and responsible growth.

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