Crompton Greaves Consumer Electricals Limited — Q2 FY26 earnings call

Call held 6 Nov 2025

Management summary

Crompton delivered a quarter of strategic pivots, highlighted by a massive scale-up in the Solar business and record margins in Lighting. While the core ECD segment faced margin pressure from adverse weather and commodity costs, the company is aggressively pursuing premiumization and GTM revamps. Management is confident in restoring ECD margins to mid-teens through price hikes and cost-saving initiatives (Unnati).

Highlights

  • Secured landmark solar rooftop orders worth ₹500 crores in approximately one month, including a single ₹445 crore order.

  • Lighting segment EBIT grew 50% YoY with margins expanding by 480 bps to reach 15.5%.

  • Butterfly (Kitchen) business reported 13.6% revenue growth and 21% EBITDA growth.

  • Underlying volume growth for the quarter stood at 3% YoY despite unfavorable weather conditions.

  • Solar pump business maintains a strong unexecuted order pipeline of ₹255 crores, growing at 100%+ YoY.

  • Management announced a 1.4% price hike in the fans portfolio effective October 24, 2025, to offset commodity inflation.

  • Incurred a ₹20 crore exceptional cost for restructuring operations in Goa and Baroda.

  • Certified by Euromonitor International as the World’s #1 Ceiling Fan Company.

Concerns

  • Commodity Price Inflation

Key financials

  1. Volume Growth 3% +3%YoY
  2. Lighting EBIT Margin 15.5%
  3. Exceptional Item ₹20 Cr
  4. Solar Rooftop Order Book ₹500 Cr

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

  • Lighting
    3.1% Revenue Growth50% EBIT Growth15.5% EBIT Margin
  • Butterfly (Kitchen)
    13.6% Revenue Growth21% EBITDA Growth
  • Solar Pumps
    ₹255 Cr Order Pipeline7% Market Share

Guidance & targets

Revenue

  • Solar Business Revenue Revenue · next 18-24 months · High confidence ₹2,000 crores
    we see this scaling up to about Rs. 2,000 Cr. in the next 18 months - 24 months.

    — Kaleeswaran A., CFO

Other

  • Solar Rooftop Order Execution Other · next 6-12 months · High confidence ₹500 crores
    the expectation is that over the next 6 months to 12 months, the order will be executed.

    — Promeet Ghosh, MD & CEO

  • GTM Plan Progress Other · next 18-20 months · Medium confidence Meaningful progress
    We expect to see meaningful progress in our GTM plan also over the next 18 months to 20 months.

    — Promeet Ghosh, MD & CEO

  • Fan Price Hike Other · Q3 FY26 · High confidence 1.4%
    We have taken a price increase of about 1.4% in our fans business. That is what we have started with.

    — Promeet Ghosh, MD & CEO

Risks & concerns

  • Commodity Price Inflation

    high

    Rising costs of raw materials like copper and steel are impacting gross margins across ECD categories.

    Management acknowledged

  • Seasonal Demand Volatility

    medium

    Unfavorable weather impacted sales of air coolers (LDA) and fans (TPW), leading to channel stocking issues.

    Both acknowledged

  • BEE 2.0 Regulatory Transition

    medium

    The transition on January 1st poses inventory management risks if destocking of old-rated products is not handled correctly.

    Analyst acknowledged

Areas of evasion (3)

  • Specific names of solar panel sourcing partners
  • Specific timeline for entry into new categories like wires
  • Granular channel-wise margin data

Q&A highlights

2 direct
ECD Margin Erosion Partial
The margin drop is a consequence of, one, the commodity price increases... Secondly, it is attributable to the TPW and the LDA businesses... significantly impacted by seasonality.

Investors were concerned about the sharp drop in core segment margins; management attributed it to mix and external factors rather than structural loss of competitiveness.

Asked by Aditya Bhartia

Solar Business Profitability and ROCE Direct
The solar business has a very similar margin profile to the rest of the company in terms of the EBIT margins... It is, at that same time, a very high ROCE business.

Clarifies that the rapid growth in Solar will not be margin-dilutive and is capital efficient due to advance payments (85-90% in retail).

Asked by Siddhartha Bera

BEE 2.0 Transition and Inventory Strategy Direct
We have learned our lessons from the last time... Utkarsh 1 is how the stocking and destocking of current B-rated fans is going to work. And Utkarsh 2 is how we are going to start manufacturing new B-rated fans.

Addresses a major past failure where Crompton lost share during the last rating transition; management claims high preparedness this time.

Asked by Renu Baid

2 min read 5 chapters

Detailed narrative

Solar Pivot Gains Massive Momentum

Crompton has successfully transitioned its solar strategy from pumps to a broader rooftop offering, securing ₹500 crores in orders within a month. The business is expected to scale to ₹2,000 crores in revenue over the next 18-24 months, potentially becoming the company's second-largest segment. Management highlighted the high ROCE nature of this business, supported by 85-90% advance payments in the retail channel and back-to-back warranty agreements with suppliers.

Lighting Segment Achieves Record Profitability

The lighting business emerged as a star performer with EBIT margins expanding 480 bps YoY to 15.5%. This was driven by a strategic shift in the product mix, reducing the salience of low-margin lamps and battens from 65% to 40% while increasing contribution from panels and floodlights. Additionally, the restructuring of the Baddi and Baroda plants has optimized manufacturing costs, with the ₹20 crore investment expected to have a sub-two-year payback.

ECD Margins Under Pressure

The Electric Consumer Durables (ECD) segment faced significant margin headwinds due to a combination of commodity price hikes and adverse weather impacting seasonal products like air coolers and TPW fans. Management is responding with a 1.4% price hike in fans and accelerated cost-saving initiatives under the 'Unnati' program. They aim to restore margins to the mid-teens, emphasizing that they continue to lead the industry in margin profile despite the current pressure.

Kitchen Business (Butterfly) Turnaround

The Butterfly Gandhimathi Appliances integration is showing results with 13.6% revenue growth and 21% EBITDA growth in Q2. Management noted that the kitchen business at Crompton is growing even faster than Butterfly, making the combined entity the second-largest kitchen appliance player in India. Efforts to improve e-commerce profitability and modern trade mix have been central to this performance.

Strategic Readiness for BEE 2.0

Learning from past market share losses during rating transitions, Crompton has launched 'Project Utkarsh' to manage the upcoming BEE 2.0 change on January 1st. The project focuses on the synchronized stocking of current B-rated fans and the early introduction of new-rated products. Management believes the industry-wide channel stocking will be more moderate this time, and Crompton is better prepared with indigenous BLDC technology (Nucleus platform).

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