Crompton Greaves Consumer Electricals Limited — Q4 FY25 earnings call

Call held 15 May 2025

Management summary

Crompton delivered a resilient Q4 performance despite subdued demand and unseasonal rains, led by a sharp turnaround in the Butterfly segment and robust margins in Lighting. The company is pivoting towards a 'Platform-First' technology approach in fans and expanding its TAM through a major foray into Solar Rooftops. Management's focus on 'Crompton 2.0' is evident in the record standalone EBITDA and the announcement of a significant ₹350 crore greenfield capex.

Highlights

  • Standalone FY25 revenue grew 10% YoY to ₹7,028 crores, marking the second consecutive year of double-digit growth.

  • Achieved highest-ever standalone EBITDA of ₹819 crores in FY25 with margins improving to 10.5%.

  • Q4 FY25 revenue grew 5% YoY to ₹1,879 crores, with EBIT growing 8% to ₹223 crores.

  • Butterfly segment returned to growth with Q4 revenue of ₹187 crores (+12% YoY) and 8.6% EBITDA margin.

  • Lighting segment EBIT margins expanded sharply to 15.9% in Q4 FY25, supported by a rich product mix.

  • Announced a ₹350 crore greenfield manufacturing facility for fans to bolster supply chain and in-house capabilities.

  • Announced entry into the ₹20,000 crore Solar Rooftop business, leveraging existing brand trust and distribution.

  • Consolidated profit growth for FY25 stood at approximately 28%.

Key financials

2 periods

Q4

  • Revenue
    ₹1,879 Cr
    YoY +5%
  • EBITDA Margin
    11.9%

FY25

  • Standalone Revenue
    ₹7,028 Cr
    YoY +10%
  • Standalone EBITDA
    ₹819 Cr
  • Consolidated Profit Growth
    28%
    YoY +28%

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)
    11% FY25 Revenue Growth6% Q4 Revenue Growth
  • Lighting
    2% FY25 Revenue Growth15.9% Q4 EBIT Margin11.8% FY25 EBIT Margin
  • Butterfly Gandhimathi
    ₹187 Cr Q4 Revenue12% Q4 Revenue Growth8.6% Q4 EBITDA Margin
  • Large Kitchen Appliances
    ₹60 Cr Revenue-1 negative EBITDA

Guidance & targets

Capex

  • Greenfield Manufacturing Facility Investment Capex · Phase 1 · High confidence ₹350 crores
    This will involve a proposed investment of about Rs. 350 Cr. ... The first phase will primarily focus on fans with plans to upscale going forward.

    — Promeet Ghosh, MD & CEO

Margin

  • Butterfly EBITDA Margin Margin · FY26 · Medium confidence 8-8.5%

    Previously 7-7.5% → 8-8.5%

    We are at about 7-7.5% EBITDA margin. The idea is to take to about 8-8.5%, but that's also on the back of significant investments will go behind the brand.

    — Kaleeswaran Arunachalam, CFO

Market Share

  • Solar Rooftop TAM Market Share · Long Term · Medium confidence ₹20,000-25,000 crores
    See fundamentally, as we talked about earlier, it's a market size, which is a target addressable market of about Rs. 20,000-25,000 Cr.

    — Kaleeswaran Arunachalam, CFO

Capacity

  • Fan Volume Addition Capacity · Annual · High confidence 1-1.5 million fans
    One, in a year where you have modest growth at the scale at which we operate, we add about 1 million to 1.5 million fans to the volume.

    — Kaleeswaran Arunachalam, CFO

Market context

  • Butterfly Long-term EBITDA Margin Profitability · next 3-5 years · Medium confidence Double-digit
    In the medium to long run, in the next three to five years, we expect Butterfly to grow at about mid-teens and reach close to double-digit EBITDA margin.

    — Kaleeswaran Arunachalam, CFO

Risks & concerns

  • Unseasonal rains and cooler weather

    medium

    Delayed summer and rains across the country, particularly in the South, have impacted Q1 growth momentum for fans and coolers.

    Both acknowledged

  • High trade inventory levels

    medium

    Trade is holding higher stocks than anticipated due to unseasonal rains shifting the season's timing.

    Analyst acknowledged

  • Pricing pressures in Lighting

    low

    Continued pricing pressures in the lighting segment are being offset by cost reduction programs (Unnati) and mix improvement.

    Management acknowledged

Areas of evasion (1)

  • Specific sourcing details for solar rooftop panels (competitiveness vs Havells/Goldi Solar).

Q&A highlights

2 direct
Competitive edge in Solar Rooftop business Direct
Brand counts for a lot in this business. And that has been demonstrated to us in the pumps business, combined with the execution capability and the sourcing capability that we brought.

Investors were concerned about Crompton being a late entrant; management highlighted brand trust and execution as key differentiators.

Asked by Aditya Bhartia (Investec)

Capex breakdown and rationale for ₹350 Cr facility Partial
The first phase includes the cost of the entire land. ... Remember that we are a large fans company. So, our requirements are large, and we are getting ever larger.

Clarifies that the high initial capex includes land for future expansion and aims for a fully integrated, material-sized plant.

Asked by Pulkit Patni (Goldman Sachs)

Butterfly turnaround and margin trajectory Direct
Phase 1 has been well done, and we are on the right track... Phase 2 is concerned, which is effective FY26 onwards, we did talk about... brand repositioning and a bunch of NPDs.

Confirms the successful completion of the stabilization phase and sets clear margin targets for the next fiscal year.

Asked by Bhoomika Nair (DAM Capital)

2 min read 5 chapters

Detailed narrative

Crompton 2.0 Strategy and Standalone Performance

Crompton achieved its highest-ever standalone EBITDA of ₹819 crores in FY25, with revenue growing 10% to ₹7,028 crores. This performance was driven by the ECD segment, which saw 11% growth in FY25 and 6% in Q4. Management highlighted that fan margins have returned to pre-BEE 1.0 levels, supported by pricing actions and new launches like the 'Fluido' fan. The company is adopting a 'Platform-First' approach with Nucleus (BLDC) and X-Tech (Induction) technologies to enhance product reliability and performance.

Butterfly Segment Turnaround

The Butterfly segment showed a significant turnaround, with Q4 FY25 revenue growing 12% YoY to ₹187 crores. EBITDA margins reached 8.6% in Q4, a sharp improvement from previous quarters. Management has completed 'Phase 1' of the turnaround, focusing on channel mix and pricing. 'Phase 2' in FY26 will target 8-8.5% EBITDA margins through brand repositioning and new product developments (NPDs), with a long-term goal of double-digit margins.

Strategic Greenfield Expansion

Management announced a major strategic initiative involving a ₹350 crore investment in a greenfield manufacturing facility. Phase 1 will focus on fans and is expected to be operational in approximately 2.5 years. This facility aims to balance in-house capabilities with vendor relationships, improving supply chain resilience, quality, and responsiveness. The investment is expected to be ROCE accretive and will eventually upscale to include other product lines.

Expansion into Solar Rooftop Business

Crompton is expanding its Total Addressable Market (TAM) by entering the solar rooftop business, estimated at ₹20,000-25,000 crores. This move follows the success of their solar pump business, which recorded ~₹200 crores in sales in FY25. Management believes the 'Crompton' brand trust and their strong B2B/B2G distribution network will be key differentiators. Initially, the business will follow an outsourced model and is expected to be margin accretive.

Lighting Segment Margin Expansion

The Lighting segment saw a sharp rise in Q4 EBIT margins to 15.9%, up from the FY25 average of 11.8%. This was achieved despite flat revenue growth in Q4, primarily through a significant shift in product mix toward panels and ceiling lights. The company's cost reduction program, 'Unnati', has also played a crucial role in maintaining profitability amidst pricing pressures in the LED bulb category.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Consumer Durables earnings calls