Q1 2027 Crompton Greaves Consumer Electricals Ltd Earnings Call

August 6, 2026

Operator: Should we start the call? Yes, Aniruddha, we can start the call.

Speaker #2: Should we start the call? Yes, Anirudh, we can start the call.

Speaker #3: Can I say your name just for the record?

Promeet Ghosh: Can I say your name, just for the record?

Speaker #2: Yeah, so thanks, Vishal. On behalf of ICICI Securities, we welcome you all to the Q1 FY27 results conference call of Crompton Greaves Consumer Electricals Limited.

Operator: Yeah. Thanks, Vishal. On behalf of ICICI Securities, we welcome you all to Q1 FY27 results conference call of Crompton Greaves Consumer Electricals Limited. We have with us today senior management, represented by Mr. Promeet Ghosh, Managing Director and Chief Executive Officer, Mr. Kaleeswaran Arunachalam, Chief Financial Officer, Mr. Sachin Phartiyal, Business Head, Home Electricals, Mr. Shaleen Nayak, Business Head, Lighting, Solar Rooftop and Wires, Ms. Shweta Sagar, Chief Business Officer, Butterfly Gandhimathi Appliances, Mr. Ruchir Jain, Head Investor Relations, Corporate Strategy, FP&A, Mr. Rishabh Jain, Deputy General Manager, Investor Relations, and Mr. Anand Kumar, Head of Pumps and Kitchen Appliances. I hand over the call to Promeet, sir, for his initial comments on the quarterly performance, and then we will open the floor for question and answer session. Thanks, over to you, Promeet, sir.

Speaker #2: We have with us today senior management represented by Mr. Promeet Ghosh, Managing Director and Chief Executive Officer; Mr. Kaliswaran Arunachalam, Chief Financial Officer; Mr. Sachin Fatial, Business Head, Home Electricals; Mr. Shalin Nayak, Business Head, Lighting, Solar Rooftops, and Wires; Ms. Shweta Sagar, Chief Business Officer, Butterfly Gandhimathi Appliances; Mr. Ruchir Jain, Head, Investor Relations, Corporate Strategy, FP&A; Mr. Rishabh Jain, Deputy General Manager, Investor Relations; and Mr. Anand Kumar, Head of Pumps and Kitchen Appliances.

Speaker #2: Now I hand over the call to Promeet sir for his initial comments on the quarterly performance, and then we will open the floor for the question and answer session.

Speaker #2: Thanks, and over to you, Promeet sir.

Speaker #3: Yeah, thank you everyone. Can you hear me properly? Okay, I'm going to take that as a yes.

Promeet Ghosh: Yeah. Thank you, everyone. Can you hear me properly? Okay, I'm going to take that as a yes.

Speaker #2: Yes, sir. Yes, sir.

Operator: Yes, sir.

Speaker #3: Good evening, everyone. Welcome to our Q1 FY27 earnings call. Thank you to the team at ICICI Securities for hosting this call. This has been an eventful quarter for us.

Promeet Ghosh: Good evening, everyone. Welcome to our Q1 FY27 earnings call. Thank you to the team of ICICI Securities for hosting this call. This has been an eventful quarter for us, from additions in our senior leadership, to progress on our brand-related efforts, to innovation-led growth, and recognition of industry-first innovation. Joining me, as was announced earlier today after a while, is Sachin Phartiyal. He joins us back as the Head of Home Electricals after a brief stint outside the organization. As many of you will remember, in his earlier tenure, he played a key role in building our fans and appliances portfolio. Along with Sachin, we also added Anuj Lall as the Head of our Integrated Supply Chain. Anuj, prior to this, served as Executive Director and Vice President, Integrated Supply Chain at Whirlpool of India.

Speaker #3: From additions in our senior leadership to progress on our brand-related efforts, to innovation-led growth and recognition of industry-first innovation. Joining me, as was announced earlier, today after a while is Sachin Fatial. He joins us back as the Head of Home Electrical after a brief stint outside the organization.

Speaker #3: As many of you will remember, in his earlier tenure, he played a key role in building our fans and appliances portfolio. Along with Sachin, we also added Anuj Lal as the head of our Integrated Supply Chain. Anuj, prior to this, served as Executive Director and Vice President, Integrated Supply Chain at Whirlpool India.

Speaker #3: Both of them bring valuable experience as well as a fresh perspective, further strengthening our senior management team. As you also know, many of the faces around the table are familiar, but some of their roles have changed.

Promeet Ghosh: The both of them bring valuable experience as well as a fresh perspective, further strengthening our senior management team. As you also know, many of the faces around the table are familiar, but some of their roles have changed. Rajat now looks after sales. Shaleen, of course, looks after our lighting, wires, as well as solar rooftops. Shweta, earlier the Chief Business Officer for Butterfly alone, now looks after both Butterfly large kitchen appliances, as well as our Reot brand. Anand has taken over the role of Head of our Kitchen Appliances business. Of course, Kalees is doing exactly the same thing that he's always been doing, right? Yeah. Let me now get on with the quarterly performance. Crompton delivered a double-digit growth across all its business segments. Driven by strong execution, successful product launches, and steady seasonal demand.

Speaker #3: Rajat now looks after sales; Shalin, of course, looks after lighting, wires, as well as solar rooftops. Shweta, previously the Chief Business Officer for Butterfly alone, now looks after both Butterfly Large Kitchen Appliances as well as our Rheon brand.

Speaker #3: Anand has taken over the role of head of our kitchen appliances business, which was Kalish. He is doing exactly the same thing that he's always been doing, right?

Speaker #3: So yeah, let me now get on with the quarterly performance. Crompton delivered double-digit growth across all its business segments, driven by strong execution, successful product launches, and steady seasonal demand. This quarter began, as you know, on an uncertain note.

Promeet Ghosh: This quarter began, as you know, with an uncertain note because of global events, with commodities facing cost and availability pressure. Through this volatility, we held on to our very disciplined approach. As a leader, making timely pricing interventions and linked working capital management, combined with operating leverage and focused cost initiatives. This has ensured that profits grew ahead of revenue. However, sustained leadership and consistent performance, as you are well aware, requires a disciplined approach across tough market conditions, and I believe that is exactly what we demonstrated under very volatile conditions. This is the discipline that has enabled us to continue to deliver strong growth with margin protection and high ROCE despite adverse market conditions, indeed, adverse and volatile market conditions. At a consolidated level, revenue grew 11.8% Y on Y to INR 2,235 crores.

Speaker #3: Because of global events, with commodities facing cost and availability pressures, through this volatility we held on to our very disciplined approach as a leader, making timely pricing interventions and ensuring lean working capital management.

Speaker #3: Combined with operating leverage and focused cost initiatives, this has ensured that profits grew ahead of revenue. However, sustained leadership and consistent performance, as you are well aware, require a disciplined approach across tough market conditions.

Speaker #3: And I believe that is exactly what we demonstrated under very volatile conditions, and this is the discipline that has enabled us to continue to deliver strong growth with margin protection and high ROCE.

Speaker #3: Despite adverse market conditions indeed adverse and volatile market conditions, at a consolidated level, revenue grow revenue grew 11.8% Y on Y. To rupees 2,235 crores.

Speaker #3: And EBITDA was ₹224 crores, growing 14.2% year-on-year, with margins expanding by 20 basis points to reach 10%. Profit after tax grew 15.2% to ₹143 crores.

Promeet Ghosh: EBITDA was INR 224 crores, and it grew 14.2% YOY, with margins expanding by 20 basis points, reaching 10%. Profit after tax to 15.2% to INR 143 crores, with net profit margin at 6.4%. Now, moving on to segmental performance. ECD business delivered 10.6% YOY revenue growth. Over the last several quarters, as many of you are aware, BLDC has been a key focus area that is beginning to show results in the market. Our BLDC portfolio grew approximately 45% this quarter, resulting from the focused portfolio interventions that we have made in the last four quarters. During this quarter, we launched five new BLDC fans, further strengthening our portfolio. We continued to remain market leaders in ceiling fans with market share gains during the quarter. Pumps delivered strong performance across various subcategories with market share gains.

Speaker #3: Net profit margin stood at 6.4%. Now, moving on to segmental performance: the ECD business delivered 10.6% year-over-year revenue growth. Over the last several quarters, as many of you are aware, BNDC has been a key focus area.

Speaker #3: That is beginning to show results in the market. Our BNDC portfolio grew approximately 45% this quarter, resulting from the focused portfolio interventions that we have made in the last four quarters.

Speaker #3: During this quarter, we launched five new BNDC fans, further strengthening our portfolio. We continued to remain market leaders in ceiling fans with market share gains during the quarter.

Speaker #3: Pumps delivered strong performance across various subcategories with market share gains. Domestic appliances grew double digits, led by water heaters, which performed very well in both trade as well as the e-com channel.

Promeet Ghosh: Domestic appliances grew double digits led by water heaters, which performed very well in both trade as well as the e-com channel. As you are aware, over the last several quarters, we have been steadily gaining leadership positions in our water heater business in general trade. Water heaters, I am glad to announce, now commands a clear leadership in volume terms in general trade. As I said earlier, this was indeed a very choppy quarter and choppy, volatile, and unpredictable quarter, marked by pricing as well as availability disruptions. But through this period, we made pricing intervention, behaving like the leaders that we are, and combined with these interventions and operating leverage, ensured that our EBIT margins grew ahead of revenue at 12.1%, with a 20 basis points gain in margins at 13.5% margin.

Speaker #3: As you are aware, over the last several quarters, we have been steadily gaining leadership positions in our water heater business in general trade. Water heaters, I'm glad to announce, now command a clear leadership in volume terms in general trade.

Speaker #3: As I've said earlier, this was indeed a very choppy quarter. And a choppy, volatile, and unpredictable quarter, marked by pricing as well as availability disruptions.

Speaker #3: But through this period, we made pricing interventions, behaving like the leaders that we are. Combined with these interventions and operating leverage, we ensured that our EBIT margins grew ahead of revenue, at 12.1%, with a 20 basis points gain in margins.

Speaker #3: At a 13.5% margin, most of the supply constraints, which arose out of this volatility, were largely addressed by the end of the quarter. This has now led to a strong start in Q2.

Promeet Ghosh: Most of the supply constraints which arose out of this volatility were largely addressed by the end of the quarter, which now has led to a strong start in Q2. Lighting continued the strong momentum that it has gathered over the last several quarters. This is something that I have been calling out for some time. There is a material change in trajectory in our lighting business, and this business continues to demonstrate this. The lighting business continues to demonstrate that it has a strong momentum. Revenue grew by 15.4% YOY to INR 269 crores, driven by growth in both the B2B as well as the B2C segments. Margins in B2C segment continued to expand, but B2B witnessed a contraction in margins because of pre-contracted prices. We reported an EBIT margin in lighting of 12% for the segment.

Speaker #3: Lighting continued the strong momentum that it has gathered over the last several quarters. This is something that I've been calling out for some time.

Speaker #3: There is a material change in trajectory in our lighting business, and this business continues to demonstrate this. The lighting business continues to demonstrate that it has strong momentum.

Speaker #3: Revenue grew by 15.4% year-over-year to ₹269 crore, driven by growth in both the B2B as well as the B2C segments. Margins in the B2C segment continue to expand.

Speaker #3: But B2B witnessed a contraction in margins because of pre-contracted prices. We reported an EBIT margin in lighting of 12.4%, or 12%, for the segment.

Speaker #3: Butterfly delivered strong results, with revenue up 14% to ₹214 crore, driven by strong momentum across all channels and market share gains in mixer grinders, pressure cookers, and glass tops.

Promeet Ghosh: Butterfly delivered strong results with revenue up 14% to INR 214 crore, driven by strong momentum across all channels and market share gains in mixer grinders, pressure cookers, and glass tops. Excluding the internal sales that Butterfly has made to Crompton of mixer grinders, which we have talked about in the past, Butterfly delivered an 18% growth. EBIT at Butterfly grew by 19.5% YOY, with margins at 4.2%. Across segments, as I have already said, we have taken pricing interventions. These range from high single digits to low double digits. These have covered approximately 80% of the inflationary pressures that we faced. I would also like to highlight the significant progress that our brand transformation journey has made.

Speaker #3: Excluding the internal sales that Butterfly has made to Crompton of mixer grinders, which we've talked about in the past, Butterfly delivered an 18% growth.

Speaker #3: EBIT at Butterfly grew by 19.5% year over year, with margins at 4.2%. Across segments, as I’ve already said, we have taken pricing interventions. These range from high single digits to low double digits.

Speaker #3: These have covered approximately 80% of the inflationary pressures that we faced. I would also like to highlight the significant progress that our brand transformation journey has made.

Speaker #3: As shared previously, we undertook an extensive usage and attitude consumer study, the insights from which have shaped a comprehensive look at our brand architecture.

Promeet Ghosh: As shared previously, we undertook an extensive usage and attitude consumer study, the insights from which have shaped a comprehensive new look at our brand architecture and has helped shape a broader refresh of the Crompton brand across our product lines. I am happy to share that by the end of this month, you will see the first visible outcomes of this work stream. We believe these efforts will set the tone for Crompton's next phase of brand journey. Over the next three to four months, you may expect to see a series of brand launch events showcasing the evolution and the future trajectory of the Crompton brand. Many of you may be already aware that there is a brand launch event that is planned on 17th of this month, 18th of this month, for which invites to the relevant parties has already gone out.

Speaker #3: And has helped shape a broader refresh of the Crompton brand across our product lines. I'm happy to share that, by the end of this month, you will see the first visible outcomes of this workstream.

Speaker #3: We believe these efforts will set the tone for Crompton's next phase of brand journey. Over the next three to four months, you may expect to see a series of brand launch events showcasing the evolution and the future trajectory of the Crompton brand.

Speaker #3: Now, many of you may be already aware that there is a event brand launch event that is planned on 17th of this month, 18th of this month, for which for which invites to the relevant parties is already gone out.

Speaker #3: There is actually a further capital market investor event which is on the 20th of this month. I expect during that capital market event to be able to give investors insight into the dramatic change that is being under that Crompton has been undergoing for the last three three odd years.

Promeet Ghosh: There is actually a further capital market investor event, which is on the 20th of this month. I expect during that capital market event to be able to give investors insight into the dramatic change that Crompton has been undergoing for the last three odd years. You will be able to get a real peek of what that is in fact delivering in Crompton. We will come to that when we see some of you on the 20th here. I just want to reiterate that we have kept to our brief, disciplined pricing approach, premiumization, while leveraging our operating scale and strong execution across categories. Moving ahead, as I said earlier, Q2 has started very well, and we are continuing to witness now that many of the volatility conditions have settled down, if not subsided. We are now beginning to see the benefits of the actions that we have taken.

Speaker #3: So you should you'll be able to get a real peak of what that is in fact delivering in in Crompton. So we we we'll we'll come to that when we see some of you on the 20th here.

Speaker #3: I just want to reiterate that we have kept to our brief, disciplined pricing approach—premiumization—while leveraging our operating scale and strong execution across categories.

Speaker #3: Moving ahead, as we see, as I said earlier, Q2 has started very well and we are continuing to witness now that many of the volatility conditions have settled down, if not subsided. We are now beginning to see the benefits of the actions that we have taken. I think it's fair to say that the pricing actions that we took, the market has well accepted; they have now flown into the market quite well.

Promeet Ghosh: I think it is fair to say that the pricing actions that we took, the market has well accepted. They have now flown into the market quite well. We are quite optimistic about how things are evolving currently. With that, I will pause, and we will take questions. Depending on what the question is, I may answer that, Kanishk may answer that, or any of the gentlemen here or ladies here can answer it. Thanks. Yeah.

Speaker #3: So, we are quite optimistic about the great things that are evolving currently. With that, I will pause, and we'll take questions. Depending on what the question is, you know, I may answer that, Kalish may answer that, or any of the gentlemen here or ladies here can answer it.

Speaker #3: Thanks. Yeah.

Speaker #1: Yeah, we can start the question queue. Those participants who have any questions, please raise your hand. The first question is from Mr. Aditya Bhartiya. Please unmute your line and go ahead with your question.

Operator: Yeah. We can start the question queue. Those participants who have any questions, please raise your hand. First question is from Mr. Aditya Bhartia. Please unmute your line and go ahead with the question.

Speaker #2: Hi. Good evening. Promeet Kalish and is on on volume growth. Given that you spoke about high single digit to low double digit kind of price increase is it fair to assume that volume growth in ECD category would have been quite modest if any and if that is the case then what could have contributed to it given that we had a favorable base like I said earlier Aditya that this quarter we were impacted now we done a very lean shift as you know right now sometimes if the prices go up and there are supply disruption that can have a adverse effect but of course over a period of time what we found that if you keep a lean if you run a lean shop over a period of time your ROCs are much better and your cash flows are much better so we've kept to that principle I would say that because of supply disruptions we did lose some sales order of magnitude maybe 200 crores maybe a little bit more you know depends but a fact of the matter is that yes look at the when you have supply disruptions you might you have to ensure that given the current availability of supply you have to maximize your revenue so you know we've kind of taken that tack and the outcome is what it is as you can see.

Aditya Bhartia Pvt Ltd): Hi, good evening, Promeet, Kanishk, and team. My first question is on volume growth. Given that you spoke about high single digit to low double digit kind of price increase-

Aditya Bhartia: Hi, good evening, Promeet, Kanishk, and team. My first question is on volume growth. Given that you spoke about high single digit to low double digit kind of price increase-

Promeet Ghosh: Yeah

Aditya Bhartia Pvt Ltd): is it fair to assume that volume growth in ECD category would have been quite modest, if any? If that is the case, what could have contributed to it, given that we had a favorable base?

Aditya Bhartia: is it fair to assume that volume growth in ECD category would have been quite modest, if any? If that is the case, what could have contributed to it, given that we had a favorable base?

Promeet Ghosh: Like I said earlier, Aditya, that this quarter we were impacted. Now we run a very lean ship, as you know, right? Now, sometimes if the prices go up and there are supply disruptions, that can have an adverse effect. Of course, over a period of time, what we found, that if you run a lean shop, over a period of time, your ROCs are much better and your cash flows are much better. We've kept to that principle. I would say that because of supply disruptions, we did lose some sales. Order of magnitude, maybe INR 200 crores.

Aditya Bhartia Pvt Ltd): INR 200 crores.

Aditya Bhartia: INR 200 crores.

Promeet Ghosh: Maybe a little bit more. It depends. Fact of the matter is that, yes. Look, when you have supply disruptions, you have to ensure that given the current availability of supply, you have to maximize your revenue. We've kind of taken that tack, and the outcome is what it is, as you can see.

Speaker #2: Understood. Understood. And the supply disruptions would have been largely on the fans portfolio, or something else?

Aditya Bhartia Pvt Ltd): Understood. These supply disruptions would have been largely on the fans portfolio or something else?

Aditya Bhartia: Understood. These supply disruptions would have been largely on the fans portfolio or something else?

Speaker #3: Actually we had some supply disruptions in other areas as well because you know if if it is only pricing disruptions then that was a different story in this case there was a lack of clear lack of visibility on you know supply of commodities and of various input materials as well.

Promeet Ghosh: Actually, we had some supply disruptions in other areas as well. If it is only pricing disruptions, then that was a different story. In this case, there was a clear lack of visibility on supply of commodities and of various input materials as well. We did have supply disruptions earlier. For instance, I spoke about lighting, right? In lighting, we had a little bit, but when you're doing a B2B business, obviously there's a forward-looking contract that you're working into, and that sometimes can, if the pricing disruptions are very large, not all of it can be recouped by pricing intervention. Yeah, I'd say there was a disruption in more than one area, and not only fans. The good news is that we worked very hard.

Speaker #3: So we did have supply disruptions earlier. So for instance we I spoke about lighting right in lighting we had a little bit but when you're doing a B2B business there can be this you are in you are obviously there's a a forward looking contract that you've gotten into and that sometimes can if the pricing disruptions are very large not all of it can be recouped by pricing intervention.

Speaker #3: So yeah it's I'd say there was there was a disruption in more than one area and not only fans. But the good news is that we worked very hard so while keeping to our principles we worked we worked very hard over the quarter and certainly towards the end of the quarter many of these issues pretty much settled down and that has enabled us to start the next quarter very well.

Promeet Ghosh: While keeping to our principles, we worked very hard over the quarter and certainly towards the end of the quarter, many of these issues pretty much settled down, and that has enabled us to start the next quarter very well.

Speaker #2: Sure, Promeet. And Promeet, you mentioned about roughly 80% of cost increases having now been passed on. But despite that, we have actually seen a bit of margin expansion.

Aditya Bhartia Pvt Ltd): Sure, Promeet. Promeet, you mentioned about roughly 80% of cost increases having now been passed on.

Aditya Bhartia: Sure, Promeet. Promeet, you mentioned about roughly 80% of cost increases having now been passed on.

Aditya Bhartia Pvt Ltd): Despite that, we have actually seen a bit of margin expansion. Does that mean that we had some low-cost inventory, which kind of cushioned the impact in this particular quarter, and in Q2, costs are sequentially going to go up, and we may require some more price hikes to kind of maintain these margins?

Aditya Bhartia: Despite that, we have actually seen a bit of margin expansion. Does that mean that we had some low-cost inventory, which kind of cushioned the impact in this particular quarter, and in Q2, costs are sequentially going to go up, and we may require some more price hikes to kind of maintain these margins?

Speaker #2: Does that mean that we had some low-cost inventory which kind of cushioned the impact in this particular quarter, and in Q2 costs are sequentially going to go up, and we may require some more price hikes to kind of maintain these margins?

Speaker #3: Actually quite you know as I said earlier we maintain we are we maintain a lean shift across the year. So you the impact of low cost inventory in unlike and I've seen some of the others probably have had a lot more of that which is one off right.

Promeet Ghosh: Actually, as I said earlier, we maintain a lean ship across the years. The impact of low-cost inventory, and I've seen some of the others probably have had a lot more of that, which is one-off, right? I wouldn't say the contribution of low-cost inventory for us was very material. As you are aware, what we do do in all our situations is that we have a very active cost management program as well. We do do that so that you can't only work on the product pricing. Even the pricing that we passed on, at least it was not our sense, perhaps because some of our peers were working from a low-cost inventory that they may have built up. We didn't see the same kind of pricing actions that others did. Yeah, we did pass on.

Speaker #3: So, I wouldn't say the contribution of low-cost inventory for us was very material. As you are aware, what we do in all our situations is that we have a very active cost management program as well.

Speaker #3: You know so we do we do do that so that you you can't only work on the product pricing. Even the pricing that we passed on at least it was not our sense perhaps because some of our peers were working from a low cost inventory that they may have built up you know so we didn't see the same kind of pricing actions that others did but yeah we did pass on.

Speaker #3: So, yeah, I don't know if that answers all your questions, but that should give you a sense of where we were at.

Promeet Ghosh: I don't know if that answers all your question, but that should give you a sense of where we were.

Speaker #2: Sure. That's helpful, Promeet. Thank you so much.

Aditya Bhartia Pvt Ltd): Sure, that's helpful, Promeet. Thank you so much.

Aditya Bhartia: Sure, that's helpful, Promeet. Thank you so much.

Speaker #1: Yeah. Next, we have a question from Mr. Dhruv Jain. Please unmute your line and go ahead with your question. Also, requesting participants to restrict their questions to a limit of two per person.

Operator: Yeah. Next we have question from Mr. Dhruv Jain. Please unmute your line and go ahead with the question. Also, requesting participants to restrict the questions to two per limit.

Speaker #1: Thanks.

Aditya Bhartia Pvt Ltd): Yeah.

Dhruv Jain: Yeah.

Operator: Thanks.

Speaker #4: Oh hi, team. Thanks for the opportunity. First question is on the expenses side. We've seen some cuts in ANP, and we've also seen a subsequent rise in other expenses to the tune of about 15%.

Dhruv Jain: Hi, team. Thanks for the opportunity. First question is on the expenses side. We've seen some bit of cut in A&P, and we've also seen subsequent rise in other expenses to the tune of about 15%. Just wanted to understand, at least on the A&P part, what's the sustainable number going forward, and if this is transitory? That's my first question.

Speaker #4: So just wanted to understand at least on the ANP part you know what's the sustainable number going forward and is this is transitory that's my first question.

Speaker #3: Yeah. So, you know, Dhruv and I said earlier this is a very active year for brand Crompton, right? So it's not really something that we've cut back in one quarter, and we've—you know, that's not something that we—as we've said before, A&P is something that we want to consistently make. So, you will see a lot of activity on brand Crompton going forward, which we believe will go a long way in refreshing the way that we are positioned, the TG that we are able to cater to, etc.

Promeet Ghosh: Yeah. Dhruv, as I said earlier, this is a very exceptional for Brand Crompton, right? It's not really something that we've cut back in one quarter, and that's not something that we, as we've said before, A&P something that we want to consistently make. You will see a lot of activity on Brand Crompton going forward, which we believe will go a long way in refreshing the way that we are positioned, the TG that we are able to cater to, et cetera. On a generic basis, I'd say the kind of percentage to sales over the year should be similar to the one that we'd had last year.

Speaker #3: So, you know, on a generic basis, I'd say the kind of percentage to sales over the year should be similar to the one that we had last year.

Speaker #4: Sure. And my second question is on the solar rooftop portfolio. So if I'm not wrong I think last quarter you had a 500 crore close to 500 crore kind of order book I just want to get a sense that what's the number here how has been the execution in this vertical so far and I mean how should we really think about this number really going forward in the next say one or two years.

Dhruv Jain: Sure. My second question is on the solar rooftop portfolio. If I'm not wrong, I think last quarter you had close to INR 500 crore kind of order book. I just want to get a sense that, what's the number here? How has been the execution in this vertical so far? How should we really think about this number really going forward in the next, say, one or two years? Thanks.

Speaker #4: Thanks.

Speaker #3: Yeah. So, the solar rooftop business in particular has been in a ramp-up mode last quarter. So, you know, basically getting all our ducks in place as far as the execution is concerned, is what I'd say.

Promeet Ghosh: Yeah. The solar rooftop business, in particular, has been in a ramp-up mode last quarter. Basically getting all our ducks in place insofar as the execution is concerned, is what I'd say. Frankly, as you are aware, out of that INR 500 crore, INR 450 crore is an order book that we expect to execute over the six, eight months.

Speaker #3: And frankly as you are you know as you are aware out of that 500 crores 450 crores is like is an order book that we expect to execute over the six eight months right.

Dhruv Jain: Sure.

Speaker #3: So I'd say that this has been a year in which we really ramped up our execution capability. I mean, you know, this is like going from zero to 500 in a very short period of time.

Promeet Ghosh: I'd say that this has been a year in which we really ramped up our execution capability. This is like going from zero to 500 in a very short period of time. The order book pretty much remains in place. The good news is that in solar rooftops, we also have started garnering orders on the B2C side. This is, of course, the entire idea of the B2G business was that it gives us the scale both in solar rooftops and solar farms, helps us sharply ramp up execution, and that we will also use to step up our B2C presence. This was the quarter where the revenues from B2C have also started rolling in. That, of course, is a consumer business, a very high ROC business, negative working capital business. Yeah, I'd say those are the two things that happened.

Speaker #3: So, the order book pretty much remains in place. The good news is that in solar rooftops, we have also started garnering orders on the B2C side.

Speaker #3: Right. So this was this is of course the entire idea of the B2G business was that it gives us the scale both in solar rooftops and solar pumps you know helps us sharply ramp up ramp up execution and that we will also use to step up our B2C presence.

Speaker #3: And this was the quarter where the revenues from B2C have also started rolling in. That, of course, is a business where, you know, it's a consumer business and a very high-ROC business, negative working capital business, right?

Speaker #3: So, yeah, I'd say those are the two things that happened. This quarter and the next quarter are where I would expect a, I mean, huge bulk of that order book to get executed.

Promeet Ghosh: This quarter and the next quarter is where I would expect a huge bulk of that order book to get executed. Yep.

Speaker #1: Yeah. Yes, completely agree. Got it. Thank you so much.

Dhruv Jain: Yes. Agree to that. Got it. Thank you so much.

Speaker #3: And the government, very clear.

Promeet Ghosh: The government pretty clear it's not getting tapped by the

Dhruv Jain: Very clear.

Speaker #1: Thank ank you.

Speaker #3: If they are able, anyway. So, yeah.

Promeet Ghosh: If we are able. Anyway, yeah.

Speaker #1: Yeah. Next, we have a question from Mr. Aachar Lohade. Please unmute your line and go ahead with your question.

Operator: Yeah. Next we have a question from Mr. Achal Lohade. Please unmute your line and go ahead with the question.

Speaker #2: Yeah. Good evening, team. Thank you for the opportunity. The first question I have, you know, if you look at—we had a low base last year given the summer season we had, and given the recovery we kind of saw in the month of June, how do you see this? How do you tally this? Is it really that consumption is that weak, or is it only specific to the category? And are you seeing any green shoots now?

Achal Lohade: Yeah. Good evening, team. Thank you for the opportunity. The first question I have, if you look at, we had a low base of last year, given the summer season we had. Given the recovery we kind of saw in the month of June, how do you see this? How do you tally this? Is really the consumption that weak, or it's only specific to the category now? Are you seeing any green shoots now?

Speaker #3: Actually our I I think it's a like I said I I think the consumption is is pretty decent. We are seeing both of the you know what happens in our business is that initially when you take price increases there's a sticker shock.

Promeet Ghosh: Actually, I think, like I said, I think the consumption is pretty decent. What happens in our business is that initially, when you take price increases, there's a sticker shock. A guy comes into the store, he looks at the product and he says, "Guys, I just came two weeks ago, and the price is now 10% higher or 15% higher." He says, "Guys, I don't want to buy it just now. Maybe it'll come down." Having said that, the nature of our business is that most of these are only partially discretionary. You really don't have an option. I think the pricing has a delaying impact, but not a demand suppression impact. Certainly, what we are seeing is that demand remains robust. Yes, we started the quarter a little bit impacted by the supply disruptions that we were facing.

Speaker #3: Right. So, a guy comes to the store, he looks at the product, and he says, "Guys, I just came two weeks ago and the price is now 10% higher or 15% higher."

Speaker #3: Right. And he says, guys, I don't want to buy it just now. Maybe it'll come down. Right. So, having said that, the nature of our business is that most of these are only partially discretionary.

Speaker #3: Right. So you really don't have an option. So I think the pricing, you know, has a delaying impact, but not a demand suppression impact.

Speaker #3: Certainly, what we are seeing is that demand remains robust, and yes, we started the quarter a little bit impacted by the supply disruptions that we were facing.

Speaker #3: You know but as our demand as our supply disruptions have subsided and you know market has become much more predictable we are seeing robust growth is what I'd say.

Promeet Ghosh: As our supply disruptions are subsiding and market has become much more predictable, we are seeing robust growth is what I'd say.

Speaker #1: Yeah. In fact, just to add to it, if you look at it category after category, actually the segments—Butterfly starts with—we reported a standalone Butterfly business reporting 18% growth. Including Crompton Lighting, probably one of our best ever quarters, with about 15% growth. ECD, on the back of ₹200 crores of supply shortage that we talked about, has still delivered ₹12 crores, where acceleration of revenue on solar rooftop is yet to kick in.

Kaleeswaran Arunachalam: In fact, just to add to it, if you look at it category after category, some of the segments, Butterfly starts with we reported a standalone Butterfly business reporting 18% growth, excluding Counter. Lighting, probably one of our best ever quarters with about 15% growth. ECD, on the back of INR 200 crores of supply shortage that we talked about, has still delivered INR 12 crores, where acceleration of revenue on solar rooftop is yet to kick in. Overall, we see that on the back of our pricing action that we have taken across categories, coupled with the supply challenges, business is moving in the right direction and consumption is also positive.

Speaker #1: So overall, we see that on the back of our pricing action that we have taken across categories, coupled with the supply challenges, business is moving in the right direction and consumption is also positive.

Speaker #3: Guys you know pricing when you when you have supply disruption you do have to you do have to be pro I mean you know you want to be proactive in pricing even in Crompton SDA business you are aware that we have an SDA business.

Promeet Ghosh: Guys, pricing, when you have supply disruption You do have to be proactive in pricing. Even in Crompton's SDA business, you're aware that we have an SDA business, right? Which over the last 6 quarters has been one of the fastest-growing businesses. We took material pricing action there, and as a consequence, the margins of that business, despite cost increases, have actually done extremely well. It has gone up multifold. Now, I'm not at liberty to disclose the number to you, but the margins in that business, profit margins in that business, has gone up multifold. To short point, it's not a demand issue.

Speaker #3: Right. Which, over the last six quarters, has been, you know, one of the fastest growing businesses. We took material pricing action there, and as a consequence, the margins of that business, despite cost increases, have actually done extremely well.

Speaker #3: It has gone up multifold. Now, I'm not at liberty to disclose the number to you, but the profit margins in that business have gone up multifold.

Speaker #3: So you kind of got to look look at that holistic picture to short point it's not a it it wasn't it's not a it's not a demand issue.

Speaker #2: Got it. Secondly if you could talk about the Capex how do you see it for the current year and next year particularly given the foreign to new categories would there be any capital allocated for that as well.

Achal Lohade: Got it. Secondly, if you could talk about the CapEx, how do you see it for the current year and next year, particularly given the foray into new categories? Would there be any capital allocated for that as well? Thank you.

Speaker #2: Thank you.

Speaker #3: Right. Right. I have said before we have I we have a pretty pretty disciplined approach to capital allocation. Right. So I've said before you know let's just let's just understand we we have so far always had a good mix of in-house manufacturing as well as outsourced ced manufacturing.

Promeet Ghosh: Guys, I have said before, we have a pretty disciplined approach to capital allocation, right? I've said before, let's just understand. We have, so far, always had a good mix of in-house manufacturing as well as outsourced manufacturing. Within in-house manufacturing, we have consistently increased our capacity with very low investments, right? If you remember, 2 years ago, we announced that we had expanded the manufacturing capacity at our Vashi plant with an investment. The capacity had gone up by 50%, and we had made an investment of all of INR 50 lakhs. Right? We have similarly expanded and optimized capacity at other locations. When we've gotten into wires, this is a question that I keep getting asked. Before we got into wires, we worked quite hard on figuring out what the supply chain for wires would be.

Speaker #3: Within in-house manufacturing, we have consistently increased our capacity with very low investments. Right. So if you will remember, two years ago we announced that we had expanded the manufacturing capacity at a Buggy Flying plant with an investment.

Speaker #3: It had one-fifth the capacity, had gone up by 50%, and we had made an investment of all of 50, right? We have, you know, similarly expanded and optimized capacity at other locations.

Speaker #3: lakhs. we got into wires we worked So and when we've gotten into quite hard on figuring out what the supply chain for wires would be.

Speaker #3: As of now, we are not putting up—it's not really a capital allocation issue. Having said this, we do have a plan to take our manufacturing capability to another level.

Promeet Ghosh: To date, as of now, we are not putting up a plan for manufacturing wires. It's not really a capital allocation issue. Having said this, we do have a plan to take our manufacturing capability to another level. Right? Now, you are aware that we have announced in the past that we are planning over the next 2, 3 years to implement a greenfield manufacturing location with the next generation manufacturing capability, right? As I have told you in the past, that manufacturing plant, which will also include a large warehousing unit, will spend about INR 350 crores. Otherwise, you shouldn't expect to see whatever. Our regular manufacture, our CapEx trends should hold.

Speaker #3: Right. Now you are aware that we have announced in the past that we are planning over the next two three years to implement a greenfield manufacturing location with the next generation manufacturing capability.

Speaker #3: Right. And as I have told plant for manufacturing wires. So you in the past that manufacturing plant which will also include a large warehousing unit will spend about 350 crores.

Speaker #3: Otherwise you know you shouldn't expect to see whatever. Our regular manufacture Capex trends will should hold.

Speaker #2: Got it. I'll I'll fall back in the queue. Thank you so much.

Achal Lohade: Got it. I'll fall back in the queue. Thank you so much.

Speaker #1: Yeah. Next we have a question from Mr. Parag Khare. Please unmute your line and go ahead with the question.

Operator: Yeah. Next, we have a question from Mr. Parag Khare. Please unmute your line and go ahead with the question.

Speaker #2: Yes. Good evening sir. Thank you for the opportunity. Sir if we look at the copper prices which is a major input side for us has been continuously going up I mean it's even after you know correction it has gone up and then it's at you know all time high.

Parag Khare: Yes. Good evening, sir. Thank you for the opportunity. Sir, if we look at the copper prices, which is a major input side for us, it's been continuously going up. Even after correction it has gone up, and then it's at an all-time high. Do you think we may need pricing actions in the future as well to support our margins?

[Analyst 1]: Yes. Good evening, sir. Thank you for the opportunity. Sir, if we look at the copper prices, which is a major input side for us, it's been continuously going up. Even after correction it has gone up, and then it's at an all-time high. Do you think we may need pricing actions in the future as well to support our margins?

Speaker #2: Do you think we may need future pricing pricing actions in the future as well to support our margins?

Speaker #3: You know I I I'd say like I said earlier we have been quite disciplined in passing on pricing increase. Right. Having said that the way that and at least I we have not seen most of our competitors or large bulk of our competitors frankly follow through in the same manner.

Promeet Ghosh: Like I said earlier, we have been quite disciplined in passing on pricing increases. Right? Having said that, we have not seen most of our competitors, our large well-profiled competitors, frankly, follow through in the same manner. Perhaps they were benefiting from a significant low-cost inventory, but that will wear off, right? The approach that we have is both working inside as well as working outside, right? Every price increase that we have in commodity, we work on both sides. As of now, do we see a significant state of pricing increases being necessary? The answer is no. Partly because we've been first to the market, and the price increases that we did take have now, we believe, largely settled into the market.

Speaker #3: Perhaps they were benefiting from a significant low cost inventory but that will wear off. Right. The price the approach that we have is both working inside as well as working outside.

Speaker #3: Right. So every price increase that we have in commodity we work on both sides. As of now you know do we see a significant in the state of pricing increases being necessary?

Speaker #3: The answer is no. Partly because we've been you know first to the market and the price increases that we did take have now we believe large largely settled into the market.

Speaker #3: At least today I have not seen sharp set of price increases that are still necessary for us because of the combination of the two or actually three.

Promeet Ghosh: At least to date, I have not seen a sharp set of price increases that are still necessary for us, because of the combination of the two, or actually three: price increases, cost measures, as well as our operating leverage. I think all of those should help.

Speaker #3: Price increases costs measures as well as our operating leverage. I think all of those should help sir.

Parag Khare: Sure. The second question is, you talked about INR 200 crores of shortfall because of the supply disruptions. Could you elaborate which category where we face these challenges? Is it fan, air coolers?

[Analyst 1]: Sure. The second question is, you talked about INR 200 crores of shortfall because of the supply disruptions. Could you elaborate which category where we face these challenges? Is it fan, air coolers?

Speaker #2: And the second question is you know you talked about 200 crores of you know shortfall because of the supply disruptions. Could you elaborate which ex which category where we faced these challenges?

Speaker #2: Is it fan air coolers?

Speaker #3: I think we answered this earlier. It's largely fans. And largely in the ECD category is where we had the shortage perhaps. Actually outside the ECD also outside even sorry sorry.

Kaleeswaran Arunachalam: No, I think we answered this earlier. It is largely fans, and largely in the ECD categories where we had the shortage product.

Promeet Ghosh: Actually, also the ECD also.

Kaleeswaran Arunachalam: Yeah.

Promeet Ghosh: Outside even lighting. That is right. Frankly, lighting was our fastest growing segment, it would have grown even faster, I assume.

Speaker #3: I mean frankly we would have frankly lighting was our fastest growing segment but it would have been it would have grown even faster I assume.

Speaker #2: Sir supply side is it because of the commodity inflation or there are some other reasons also to it?

Parag Khare: Supply side, is it because of the commodity inflation or there are some other reasons also to it?

[Analyst 1]: Supply side, is it because of the commodity inflation or there are some other reasons also to it?

Kaleeswaran Arunachalam: Fundamentally, as you would know, Crompton, as an organization, has always been working on a sharp networking capital management, and we have been an organization that works on negative working capital. As we entered Q4, we never carry a base inventory into it. As the war opened up, our initial challenge assumptions were around availability shouldn't be a concern, it is only pricing. As we discovered, the commodities also took time, and we did not have the base inventory to cover it. That took us time, and by around June end, it got stabilized. July, we are back to normal. In spite of those challenges is what we have delivered, is what we were trying to explain across categories, the challenges we had on availability.

Speaker #3: Fundamentally as you would know Crompton as an organization has always been working on a sharp networking capital management and we have been an organization that works on negative working capital.

Speaker #3: So, as we ended Q4, we never carry a base inventory into it, and as the war opened up, our initial challenge assumptions were around availability—availability shouldn't be a concern.

Speaker #3: It's only pricing. But as we discovered the commodities also took time and we did See. not have the base inventory to cover it. And that took us time and by around June end it got stabilized and July we are back to normal.

Speaker #3: So in spite of those challenges is what we have delivered is what we were trying to explain across categories the challenges we had on availability.

Speaker #2: Sure. Thank you for the opportunity and good luck for Q2.

Parag Khare: Sure. Thank you for the opportunity, and good luck for Q2.

[Analyst 1]: Sure. Thank you for the opportunity, and good luck for Q2.

Speaker #3: Thank you.

Kaleeswaran Arunachalam: Thank you.

Speaker #1: Yeah. Next we have a question from Siddharth Bera. Please unmute your line and go ahead with the question.

Operator: Yeah. Next we have question from Siddhartha Bera. Please unmute your line and go ahead with the question.

Speaker #4: Yeah. Hi sir. Thanks for the opportunity. Sir first a quick follow up on the previous question of sales which we lost. Given how will be the channel inventory in that scenario and would we have scope to cover up this shortfall in the coming quarters?

Siddhartha Bera: Yeah. Hi, sir. Thanks for the opportunity. Sir, first, a quick follow-up on the previous question of sales which we lost. How will be the channel inventory in that scenario, and would we have scope to cover up this shortfall in the coming quarters? That will be the first question. Second is, if you can share the segment-wise growth like fans, pumps, and small appliances, how the growth has been in the quarter?

Speaker #4: So that will be the first question. And second is if you can share these segment wise growth like fans pumps and small appliances how the growth has been in the quarter?

Speaker #3: Oh Siddharth as you are aware we don't provide the segment wise results. Which or rather the subsegment results. Segment wise results have been provided between ECD lighting and butterfly.

Kaleeswaran Arunachalam: Siddharth, as you're aware, we don't provide the segment-wise results, or rather the sub-segment results. Segment-wise results have been provided between ECD, Lighting, and Butterfly. Insofar as the channel inventory is concerned, that goes with the demand pattern. We never had too much of a channel stock earlier also. We don't think that's a concern right now, though.

Speaker #3: In so far as the channel inventory is concerned that goes with the demand pattern we never had too much of a channel stock earlier also we don't think that's a concern right now too.

Siddhartha Bera: Got it.

Promeet Ghosh: It's not a particular area of concern for this quarter.

Speaker #3: It's not a concern for the it's not a particular area of concern for this quarter.

Speaker #1: Yeah.

Kaleeswaran Arunachalam: Yeah.

Speaker #3: Particularly because we addressing this towards the last part of the last quarter. So you know this is kind of weird. Yeah. Now we are looking at some of these in the rear view mirror.

Promeet Ghosh: Particularly because we started addressing this towards the last part of the last quarter. Here, this is kind of

Siddhartha Bera: Lined up.

Promeet Ghosh: Yeah. Now we are looking at some of these in the rear view mirror.

Speaker #4: Got it sir. Thanks a lot.

Siddhartha Bera: Got it, sir. Thanks a lot.

Speaker #1: Next, we have a question from Mr. Umang Mehta. Please unmute your line and go ahead with your question.

Operator: Next, we have a question from Mr. Umang Mehta. Please unmute your line and go ahead with the question.

Speaker #2: Hi. Thanks for the opportunity. First question again on fans. Given the disruption is now behind and given that the categories seen double digit kind of price hikes and the base of last year is okay.

Umang Mehta: Hi. Thanks for the opportunity. First question, again on fans. Given the disruption is now behind, given that the category's seen double-digit kind of price hikes, the base of last year is okay, would 15% be a fair expectation for rest of the year in terms of how fans should grow?

Speaker #2: Would we would 15% be a fair expectation for rest of the year in terms of how fans should grow?

Speaker #3: Sure. As you would know we don't provide power guidance in terms of how do we go about it. But yes from a portfolio perspective we have already seen the kind of growth that we have seen in BLDC.

Kaleeswaran Arunachalam: Umang, as you would know, we don't provide forward guidance in terms of how do we go about it. Yes, from a portfolio perspective, we have already seen the kind of growth that we have seen in BLDC, which we talked about in the range of about 45%. A lot of work that had to be done within the BLDC category on product and placement has just started. The journey of BLDC for us, I would say, in many sense, is probably beginning, there is a long, long leg room available for us to grow from that perspective. Similarly, premium fans, which is on the induction side, is also moving positively as we get into Q2, Q3 onwards. That should provide impetus for the growth.

Speaker #3: Which we talked about in the range of about 45%. A lot of work that had to be done within the BLDC category on product and placement has just started.

Speaker #3: So the journey of BLDC for us I would say in many sense is probably beginning and there is a long long leg room available for us to grow from that perspective.

Speaker #3: Similarly premium fans which is on the induction side is also moving positively as we get into Q2 Q3 onwards. That should provide impetus for the growth.

Speaker #3: As we have always been talking about regulatory challenge or the changes that is happening through BWD we see Crompton is positively poised to consolidate the industry at the entry segment and gain market share.

Kaleeswaran Arunachalam: As we have always been talking about regulatory challenge or the changes that is happening through BEE, we see Crompton is positively poised to consolidate the industry at the entry segment and gain market share. Considering that it may not be competitively possible for people to absorb the incremental cost and pass back. Overall, fans as a category, we do believe we are well-poised. Already some of the symptoms are visible for us in strong BLDC growth and strong double-digit growth in some of our other sub-segments within fans, the momentum should continue in both mid and long run.

Speaker #3: Considering that it may not be competitively possible for people to absorb the incremental cost and pass back. So overall fans as a category we do believe we are well poised.

Speaker #3: Already some of the symptoms are visible for us in strong BLDC growth and strong double digit growth in some of our other subsegments within fans.

Speaker #3: And the momentum should continue in both mid and long run.

Speaker #2: Sir Kalesh thanks. And the second question was on solar rooftop. It seems that this quarter didn't see much execution. Was it something to do with government or any challenges in the quarter and are they be yeah.

Umang Mehta: Sure, Kash. Thanks. The second question was on solar rooftop. It seems that this quarter didn't see much execution. Was it something to do with government, or any challenges in the quarter?

Kaleeswaran Arunachalam: Yeah. The revenue recognition for solar rooftop, we follow a methodology on installation basis. Dispatches from our end are ongoing. It's been moving in the right trend, but revenue is recognized when the installation gets completed, which we're expecting to happen in Q2.

Speaker #3: Yeah. The revenue recognition for solar rooftop, we follow a methodology on installation basis. So, dispatches from our end are ongoing. It's been moving in the right trend.

Speaker #3: But revenues recognized when the installation gets completed which we are expecting to happen in Q2.

Speaker #2: Fair enough. Thank you so much and all the best.

Umang Mehta: Fair enough. Thank you so much, and all the best.

Speaker #3: Sir as a government we've been paying us on time. In fact we've been paying us and pushing us to continue to accelerate.

Promeet Ghosh: Sir, the government's been paying us on time. In fact, they've been paying us and pushing us to continue to accelerate.

Speaker #1: Yeah. Next we have a question from Mr. Vishal Goyal. Please unmute your line and go ahead with the question. Mr. Vishal Goyal please unmute your line and go ahead with the question.

Operator: Yeah. Next we have question from Mr. Vishal Goyal. Please unmute your line and go ahead with the question.

Operator: Mr. Vishal Goyal, please unmute your line and go ahead with the question.

Speaker #5: Hello.

Vishal Goyal: Hello. Yeah, thanks for the opportunity. Good evening, team. My question is on the wires segment. Can you share the current status as to how many cities we have reached and any initial numbers, if you can share at all?

Speaker #2: Yeah. Thanks for the opportunity. Good evening team. So my question is on the wire segment. Can you share the current status as to how many cities we have reached and any initial numbers if you can share at all?

Speaker #3: You know again we'll hold off on talking about initial numbers. But as you are aware the we launched wires in Tamil Nadu and Karnataka.

Promeet Ghosh: Again, we'll hold off on talking about initial numbers. As you are aware, we launched wires in Tamil Nadu and Karnataka.

Speaker #1: In Karnataka.

Vishal Goyal: Karnataka.

Shaleen Nayak: Karnataka.

Speaker #3: Karnataka. I don't know if there's a count of cities.

Promeet Ghosh: Karnataka. I don't know the count of cities.

Speaker #1: Yeah. We've been about 14 different towns and cities.

Vishal Goyal: Yeah, we've been about 14 different towns and cities.

Shaleen Nayak: Yeah, we've been about 14 different towns and cities.

Speaker #3: 14. So I'm reminded by Shalini that we have been we are present in 14. See guys I think this is a business which is lots of potential.

Promeet Ghosh: 14. I am reminded by Shaleen that we have presented 14. Guys, I think this is a business which has lots of potential. We are just getting started, as and when we build out the business in these cities, we will also expand into other areas. Yeah, by Crompton size, it is still very small. I am not actually going to talk about it because obviously INR 9,000 crores, it is still a small business. The idea is that this is a very large business that we have the right to win, we are finding that we are able to leverage that right to win. Of course, early days yet.

Speaker #3: Which is getting started and as in when you know we kind of I think built out the business in these cities we will also expand into other areas.

Speaker #3: So yeah I mean early by Crompton size it is still very small so I'm not going to actually going to talk about it because you know obviously 9,000 crores you you it's it's still a small business.

Speaker #3: But the idea is that this is a very large business that we have the right to win and we are finding that that we are able to the you know we are able to leverage that you know right to win.

Speaker #3: Of course, it's still early days yet.

Vishal Goyal: Yes.

Shaleen Nayak: Yes.

Speaker #2: Sure. Thanks. And just to follow up question on butterfly side. So how is the competition on this segment? You mean like there are a lot more white label and other brands which have come up plus Chinese plus now Ninja has come in.

Vishal Goyal: Sure. Thanks. Just a follow-up question on the Butterfly side. How is the competition on this segment? There are a lot more white label and other brands which have come up, plus Chinese, plus now Ninja has come in. How are you looking at the competition in this space?

Speaker #2: So how are you looking the competition in this space?

Speaker #3: I think you want to answer that.

Promeet Ghosh: Pritha, you want to answer that and Shaneel?

Speaker #4: So I think kitchen appliances for quite some time has been extremely competitive space at least for the last five six years it's been a very competitive space where we have been having white labels and international brands have started playing in this market for quite some time.

Swetha Sagar: I think kitchen appliances for quite some time has been extremely competitive space. At least for the last five, six years, it's been a very competitive space where we have been having white labels and international brands have started playing in this market for quite some time. How we were looking at it, I think it's quite visible in the levers that we started activating from last year, starting from the brand refresh to our brand architecture rework. In line with it, keeping the consumers as a center, I think that's when we had launched our IdeaFirst series coming into place, which has actually started working well for us and contributing significantly to the brute sell of Butterfly.

Speaker #4: I think how we were looking at it I think it's quite visible in the levers that we activated started activating from last year starting from the brand refresh to our brand architecture rework and in line with it you know keeping the consumers as the center I think that's when we had launched our idea for series coming into place and which has actually started working well for us and contributing significantly to the growth delta you know for butterflies.

Speaker #4: But from a space point of view, it is always good to have, you know, multiple brands playing in a space because it opens up a lot of opportunity for us as a very serious player in kitchen appliances.

Swetha Sagar: From a space point of view, it is always good to have multiple brands playing in a space because it opens up a lot of opportunity for us as a very serious player in kitchen appliances. We are looking at it very positively.

Speaker #4: We are looking at it very positive.

Speaker #3: I should tell you that Butterfly is an interesting, you know, case in point about how Crompton has been evolving. The Crompton group has been evolving.

Promeet Ghosh: I should tell you that Butterfly is an interesting case in point about how the Crompton group has been evolving. Even as I say, if you exclude the OEM work that Butterfly was doing for Crompton, the growth in Butterfly was about 18%. Even that 18% comes on very strong growth, 20-plus% growth in retail, in large format retail, in e-commerce. All the quality of distribution in Butterfly, and I'm telling you this because now you know the numbers in Butterfly. We can't necessarily talk about the same numbers in Crompton because we don't fully disclose them. Each one of these, the key focus channels for Butterfly, the growth has been very robust. Right? It's an indication of how we've been evolving as a business.

Speaker #3: Even as I say, you know, if you exclude the sales—that is, the OEM work that Butterfly was doing for Crompton—the growth in Butterfly was about 18%.

Speaker #3: But even that 18% comes on very strong growth you know 20 plus percent growth in retail in large format retail in e-commerce so you know all the the quality of distribution in butterfly and I'm telling you this because now you know the numbers in butterfly I we can't necessarily talk about the same numbers in Crompton.

Speaker #3: Because we don't fully disclose them. But each one of these the key focus channels for for butterfly the growth has been very robust. Right.

Speaker #3: And so you know it's a it's an indication of how we've been evolving as a business.

Speaker #2: Understood. Thanks. I'll fall back in the queue.

Vishal Goyal: Understood. Thanks. I'll fall back in the queue.

Speaker #1: Yeah. Next we have a question from Mr. Sameer Gupta. Please unmute your line and go ahead with the question.

Operator: Next we have a question from Mr. Samir Gupta. Please unmute your line and go ahead with the question.

Speaker #2: Hi. I hope I'm audible. Good evening everyone and thanks for taking my question. Sir firstly on the I know this this this has been discussed by many participants.

Samir Gupta: Hi, I hope I'm audible. Good evening, everyone, and thanks for taking my question. Sir, firstly, I know this has been discussed by many participants, but still a few lingering questions here. INR 200 crore lost sales, just trying to understand. At least the channel would still be carrying inventory, and while running a tight ship is great. Firstly, the channel inventory should have sufficed for the supply chain disruptions. While running a tight ship is great, does this episode change our approach towards inventory management, particularly going into the largest season of the year?

Speaker #2: But still a few few lingering questions here. So 200 crore loss sales just trying to understand at least the channel would still be carrying inventory and while running a tight ship is great.

Speaker #2: So firstly I mean the channel inventory should have sufficed for the supply chain disruptions. And while running a tight ship is great but does this episode change our approach towards inventory management particularly particularly going into the largest season of the year?

Speaker #3: Sameer first and foremost channel inventory is an outcome of a tertiary sales what we are discussing here is about a primary sales loss for the company.

Promeet Ghosh: Samir, first and foremost, channel inventory is an outcome of a tertiary sales. What we are discussing here is about a primary sales loss for the company.

Kaleeswaran Arunachalam: Samir, first and foremost, channel inventory is an outcome of a tertiary sales. What we are discussing here is about a primary sales loss for the company.

Speaker #3: So a tertiary sales whatever channel carries would have been adequate and that is what we see in category after category on our tertiary flow.

Kaleeswaran Arunachalam: Our tertiary sales, whatever channel carries would have been adequate, and that is what we see in category after category on our tertiary growth. I don't think these are apple-to-apple numbers that are comparable. Second, in terms of how do we look at the inventory management strategy, these are typically one-off black swan events for which we cannot change the business model of the company. I think for many years, our business model on being asset-light has been very productive, and that has been giving results quarter after quarter. We don't want to revisit that just because of a one-off. Obviously, wherever required, if we have to take a higher portion and make some course corrections, we will be open to reviewing that as we move forward.

Speaker #3: So I don't think these are apple to apple numbers that are comparable. Second in terms of how do we look at the inventory management strategy these are typically one of Black Swan events for which we cannot change the business model of the company.

Speaker #3: I think for many years our business model on being asset light has been very very productive. And that has been giving results quarter after quarter.

Speaker #3: And we don't want to revisit this just because of a one-off. Obviously, wherever required, if we have to take a higher portion and make some course corrections, we will be open to reviewing that as we move forward.

Speaker #2: Got it. So basically the consumer level net end consumer level sales would not have been lost is what you're saying.

Samir Gupta: Got it. Basically the end consumer level sales would not have been lost, is what you're saying.

Speaker #3: Yeah. Yeah. Not as much. Not as much obviously. Obviously. So this is primary sales baba. We're talking about primary sales. And yeah guys this in so far as our approach to running a business let me show you running a tight ship like we do at Crompton is is not easy to do.

Kaleeswaran Arunachalam: Yeah.

Samir Gupta: Not as much.

Kaleeswaran Arunachalam: Obviously. This is primary sales, Baba. We are talking about primary sales. Yeah, guys, insofar as our approach to running a business, let me assure you, running a tight ship like we do at Crompton is not easy to do. It's something that we worked on for many years, and that is also the reason why we have the kind of ROC that we do. Especially if you take out the Butterfly investments, you can see the kind of ROC that we generate and the cash flow that we generate. Yeah, there'll be some quarters where having a huge inventory will help you get into the quarter because you will have low-cost inventory. There'll be another quarter when the prices go down and you will have another impact. There is a lot of value we found over the years to have a lean inventory.

Promeet Ghosh: Obviously. This is primary sales, Baba. We are talking about primary sales. Yeah, guys, insofar as our approach to running a business, let me assure you, running a tight ship like we do at Crompton is not easy to do. It's something that we worked on for many years, and that is also the reason why we have the kind of ROC that we do. Especially if you take out the Butterfly investments, you can see the kind of ROC that we generate and the cash flow that we generate. Yeah, there'll be some quarters where having a huge inventory will help you get into the quarter because you will have low-cost inventory. There'll be another quarter when the prices go down and you will have another impact. There is a lot of value we found over the years to have a lean inventory.

Speaker #3: It's something that we worked on for many years. And that is also the reason why we have the kind of ROC that we do especially if you take out the butterfly investments you can see the kind of ROC that we generate and the cash flow that we generate.

Speaker #3: So yeah there'll be there'll be some quarters where you know having a huge inventory will help you get into the quarter because you will have low cost inventory there'll be another quarter when the prices go down and you will have a you will have a another impact.

Speaker #3: So you know there is it is a lot of value we found over the years to have a lean inventory.

Speaker #2: I understand sir. My apologies because I interpreted it as the end consumer sales lost. That's why the the the question. Second is on the the on butterfly.

Samir Gupta: I understand, sir. My apologies, because I interpreted it as the end consumer sales lost-

Kaleeswaran Arunachalam: Oh.

Promeet Ghosh: Oh.

Samir Gupta: That's why the question.

Kaleeswaran Arunachalam: No, nothing to

Promeet Ghosh: No, nothing to

Samir Gupta: Second is on Butterfly. 18% growth looks great, this quarter did have some tailwinds in terms of higher demand for induction cooktops. If I look at your competitor, TTK, they have done a 34% growth this quarter. One, was this segment also impacted by supply disruptions? You did mention market share gains, but the market leader has reported a faster growth. Is it again primary, secondary or a geography disparity that we are looking at?

Speaker #2: So 18% growth looks great but this quarter did had some tailwinds in terms of higher demand for induction cooktops. And if I look at your competitor TTK they have done a 34% growth this quarter.

Speaker #2: So one was this segment also impacted by supply disruptions. You did mention market share gains. But the market leader is has reported a faster growth or is it again primary secondary or or a geography you know disparity that we are looking at?

Speaker #3: You want to answer here?

Kaleeswaran Arunachalam: You want to answer, Shweta?

Promeet Ghosh: You want to answer, Shweta?

Speaker #4: Sure. So, see, I think our core category business, which I think contributes to about 85% of Butterfly’s turnover, has grown significantly, in line with what the competition has grown.

Swetha Sagar: Sure. I think our core category business, which almost contributes to about 85% of Butterfly's turnover, I think we've grown significantly in line with what competition has grown. That's the first thing. Second thing is with respect to induction cooktop, our growth is not backed by induction cooktop at this point in time. Like we have seen in the past quarters also, our auxiliary categories were something that strategically we decided to accelerate them only from Q2 onwards of this year. Our growth is steady state coming in from key categories in which we are serious about, and our market shares also have been sustainably doing better for last few quarters for us.

Speaker #4: So that's the first thing. So second thing is with respect to induction cooktop our growth is not backed by induction cooktop at this point in time.

Speaker #4: Because, like we have seen in the past quarters also, our auxiliary categories were something that we, strategically, decided to accelerate only from quarter two onwards of this year.

Speaker #4: So our growth is steady state coming in from key categories in which we are serious about and our market shares are also have been sustainably doing better for last few quarters for us.

Speaker #4: Now if we break it down into few categories where if we would want to benchmark it against maybe our pressure cookers and glass top casters have done you know much better than what we see from our peers at this point in time.

Swetha Sagar: If we break it down into few categories there, which we would want to benchmark it against, maybe our pressure cookers and glass top gas stoves have done much better than what we see from our peers at this point in time. Specifically, since you mentioned about Prestige, I think they are market leaders in induction cooktop, I think they have made the maximum out of it. We don't play significantly in that particular category at this point.

Speaker #4: Specifically, since you mentioned Prestige, I think they are market leaders in induction cooktops, and I think they have made the maximum out of it.

Speaker #4: And we don't play you know significantly in that particular category at this point.

Speaker #3: We take an add-on to that. See, fundamentally, if you look at it, there's also another impact on the Butterfly business. Core channels of the Butterfly business have grown ahead of 20%.

Kaleeswaran Arunachalam: Let me take an add on, Shweta. Fundamentally, if you look at it, there is also another impact on Butterfly business. Core channels of Butterfly business have grown ahead of 20%. If you look at it, this was a quarter that was impacted by gas cylinder issues and oil marketing companies did not take off on gas stoves. If you include that impact, Butterfly has already grown at 20% ahead. That is what it would have grown at.

Speaker #3: If you look at it this was a quarter that was impacted by gas cylinder issues and oil marketing companies did not take off on gas stubs.

Speaker #3: So if you include that impact butterfly has already grown at 20% ahead. What it would have grown at but the point being that this is not something new I I assume you guys are aware our approach to butterfly has been back to basics.

Samir Gupta: Yeah

Kaleeswaran Arunachalam: The point being that this is not something new. I assume you guys are aware our approach to Butterfly has been back to basics. Let us grow what our core product portfolio is. Let us grow what our core channel is. Let us de-emphasize other things which can add revenue episodically, but are not consistent. That is kind of the approach. In Butterfly's case, the induction cooktops is a relatively small portion, and therefore does not benefit as much as our. Having said that, the core businesses have done very well.

Promeet Ghosh: The point being that this is not something new. I assume you guys are aware our approach to Butterfly has been back to basics. Let us grow what our core product portfolio is. Let us grow what our core channel is. Let us de-emphasize other things which can add revenue episodically, but are not consistent. That is kind of the approach. In Butterfly's case, the induction cooktops is a relatively small portion, and therefore does not benefit as much as our. Having said that, the core businesses have done very well.

Speaker #3: Let's grow what our core product portfolio is. Let's grow what our core channel is. Let's deemphasize other things which can add revenue episodically but are not consistent.

Speaker #3: So you know that's kind of the approach. But in butterflies case the induction cooktops are relatively small portion and therefore doesn't benefit as much as our but having said that the core businesses have done very well.

Samir Gupta: Got it, sir. That is all from me. Thanks for answering so patiently. I will come back in the queue for follow-ups. Thanks a lot.

Speaker #2: Got it sir. That's all from me. Thanks for answering so patiently. I'll come back in the Q4 follow ups. Thanks a lot.

Speaker #1: Next we have a question from Mr. Keyur Pandya. Please unmute your line and go with the question.

Operator: Next we have question from Mr. Keyur Pandya. Please unmute your line and go ahead with the question.

Speaker #5: Hello. Thanks for the opportunity. Sir two questions one on the renewable side or solar portfolio. If you can just refresh what you have earlier guided in terms of where does it stand in terms of both profitability and working capital profitability versus either absolute number or versus say the segment in which it is housed.

Keyur Pandya [Investment Analyst: Hello. Thanks for the opportunity. Sir, two questions. One on the renewable side or the solar portfolio.

Keyur Pandya: Hello. Thanks for the opportunity. Sir, two questions. One on the renewable side or the solar portfolio.

Kaleeswaran Arunachalam: Yeah.

Keyur Pandya [Investment Analyst: If you can just refresh what you have earlier guided in terms of where does it stand in terms of both profitability and working capital. Profitability versus either absolute number or versus, say, the segment in which it is housed. Whichever you want to highlight. Ancillary question is, as you mentioned, it is more of a timing issue in the reporting. Does rains monsoon seasonality impact in any way, or it is ad hoc business, which would always be lumpy?

Keyur Pandya: If you can just refresh what you have earlier guided in terms of where does it stand in terms of both profitability and working capital. Profitability versus either absolute number or versus, say, the segment in which it is housed. Whichever you want to highlight. Ancillary question is, as you mentioned, it is more of a timing issue in the reporting. Does rains monsoon seasonality impact in any way, or it is ad hoc business, which would always be lumpy?

Speaker #5: Whichever you want to highlight. And ancillary question is so this is as you mentioned it is more of a timing issue in the reporting.

Speaker #5: Now does it impact I mean does range monsoon seasonality impact in any way or it is ad hoc business I mean which which would always be lumpy?

Promeet Ghosh: In the renewable business, we are in two segments. We are in solar pumps and we are in solar rooftops.

Speaker #3: So in the renewable business we are in two segments. We are in solar pumps and we are in solar rooftops. Right? And so let's just take them slightly differently.

Promeet Ghosh: In the renewable business, we are in two segments. We are in solar pumps and we are in solar rooftops.

Keyur Pandya [Investment Analyst: Sure.

Keyur Pandya: Sure.

Promeet Ghosh: Right?

Promeet Ghosh: Let's just take them slightly differently. The solar rooftop business, which we started about 8, 9 months ago, that's a business where we've gotten an order book of about INR 500 crores, as you are well aware.

Speaker #3: The solar rooftop business, which we started about eight to nine months ago, is a business we have gotten into. We've gotten an order book of about ₹500 crore. As you are aware, this order book is from Andhra Pradesh.

Promeet Ghosh: Of course, this is the order book from Andhra Pradesh.

Keyur Pandya [Investment Analyst: Right.

Keyur Pandya: Right.

Speaker #3: The major of this of this contract is we have to implement about 38,000 rooftops in various SCST homes in Andhra Pradesh over the next six months or eight months at the outset.

Promeet Ghosh: The nature of this contract is we have to implement about 38,000 rooftops in various SC/ST homes in Andhra Pradesh over the next six months or eight months at the outset. The payment characteristics of this are that when we demonstrate to the government that we have the product, the government upfront pays us 40%. We go out and install the product. At that point in time, MNRE pays us, the central government pays us.

Speaker #3: The payment characteristics of this are that when we demonstrate to the government that we have the product, the government pays us 40% upfront. Right?

Speaker #3: Then we go out and install the product then at that point in time MNRE pays us the central government pays us. Right? So this is the characteristic of our rooftop business.

Promeet Ghosh: This is the characteristic of our rooftop business. As I told you, we are getting started. The way that it goes is that you've got to go out and install, and then beyond a point, the revenue recognition happens.

Speaker #3: As I told you, we are getting started in our—the exec, you know, the way that it goes is that you've got to go out and install, and then beyond a point, the revenue recognition happens.

Speaker #3: So I'd say the the revenue so far has been relatively modest but the execution has started in many installations have also happened which of course should reflect itself in the following quarters.

Keyur Pandya [Investment Analyst: Right.

Keyur Pandya: Right.

Promeet Ghosh: I'd say the revenue so far has been relatively modest, but the execution has started in the right earnest, and in fact, many installations have also happened.

Keyur Pandya [Investment Analyst: Correct.

Keyur Pandya: Correct.

Promeet Ghosh: Which, of course, should reflect itself in the following quarters. Insofar as the government payment approach is concerned, we are already receiving money from the government. As we are demonstrating to the government that we have the product available to install, the government is paying us on time. I said earlier, in fact, the government is pushing us-

Speaker #3: Now in so far as the government payment you know approach is concerned we are already receiving money from the government. As we are demonstrating to the government that we have the product available to install the government is paying us on time and I said earlier in fact the government is pushing us to accelerate the installation.

Keyur Pandya [Investment Analyst: To accelerate

Keyur Pandya: To accelerate

Promeet Ghosh: to accelerate the installations, right?

Speaker #3: Right? Right?

Speaker #2: Absolutely.

Keyur Pandya [Investment Analyst: Absolutely.

Keyur Pandya: Absolutely.

Promeet Ghosh: You guys can add in the end, let me just take a shot at it first. That's the way that this business works. Insofar as solar pumps are concerned, this is also a B2B business where the government conducts auctions. You participate in that auction. They give you a bunch of solar pumps to install. Those, as you install, you demonstrate that you install, and you start getting payments from the government. Right?

Speaker #3: So you know you guys can add in the end but let me just take a shot at it first. So you know that's the that's the way that this business works.

Speaker #3: Insofar as solar pumps are concerned, this is also a B2C business where the government conducts auctions, right? And you participate in that auction; they give you a bunch of, you know, solar pumps to install.

Speaker #3: Those as you install you you know you demonstrate that you installed and you start getting payments from the government. Right? Auction I said auction tender not auction tender.

Keyur Pandya [Investment Analyst: Exactly.

Keyur Pandya: Exactly.

Promeet Ghosh: Auction, I said. Not auction, tender. That's the way that business works. This is not with only one state. These are with various states. And that reminds me, we started initially with Haryana, then we've done a bunch of work with Maharashtra, and also now with Rajasthan in recent times, et cetera. Right?

Speaker #3: Right? Yeah. So that's the way that that business works. This is not with only one state. These are with various states as well as reminds me we started initially with Haryana then we've done a bunch of work with Maharashtra and also now with Rajasthan in recent times etc.

Speaker #3: Right? So, NMP. NMP. We've done a bunch of work with MP. There, the process is that you have to install, then you have to demonstrate that you installed, and then the government pays you.

Keyur Pandya [Investment Analyst: MP also.

Keyur Pandya: MP also.

Promeet Ghosh: MP. We've done a bunch of work with MP. There, the process is that you have to install, then you have to demonstrate that you installed, and then the government pays you. Right? Our approach to both these businesses is that we do not install so far. We have an installation partner. That installation partner, as and when we get money from the government, a share of that money goes to the installation partner, because of which the gross margin in this business is pretty much the EBIT margin in this business, because gross margin onwards, the costs that are incurred are incurred by the partner. The gross receivable from the government, whenever the government pays us, we pay a share of that to our installation partner.

Speaker #3: Right? Our our approach to both these businesses is that we do not install so far we haven't installation partners. Right? So that installation partner as and when we get money from the from the government a share of that money goes to the installation partner because of which the gross margin in this business is pretty much the EBIT margin in this business because gross margin onwards the costs that are incurred are incurred by the partner.

Speaker #3: And the gross receivable from the government whenever the government pays us we pay a share of that to our installation partner. Therefore the gross gross receivables from the government by the way is not identical to net renewables because our share of not renewables net receivables.

Promeet Ghosh: The gross receivable from the government, by the way, is not identical to net receivables, because our share of net receivables, okay? Maybe this is a little complicated, but trust me, it's a good business for us to be in. Insofar as the solar pumps business is concerned, we did find that there was some delay in the payment of the government a couple of quarters ago. I have to say that over the last couple of quarters, that pace has certainly stepped up and continues to step up even in July. It's become clearer what are the things that you have to demonstrate to the government. The government's been clear that as you pay, these guys will go and install more, and so on and so forth.

Speaker #3: Okay? Maybe this is a little complicated but trust me. It's a good business for us to be in. In so far as the solar pumps business is concerned we we we did find that there was some delays in the payment of the government a couple of quarters ago I have to say that over the last couple of quarters that pace has certainly stepped up and continues to step up even in July.

Speaker #3: So you know we've kind of it's become clearer you know what you have to what are the things that you have to demonstrate to the government the government being clear that guys if you you know as you pay these guys will go and install more in the and so on and so forth.

Speaker #3: So I I'd say that these businesses unlike our other businesses don't necessarily run on a negative working capital because they are different businesses but the ROC in these businesses is good.

Promeet Ghosh: I'd say these businesses, unlike our other businesses, don't necessarily run on a negative working capital because they are different businesses. The ROC in these businesses is good, right? Obviously we don't want to get into any business in which our ROC is not good. The ROC is good as you've seen so far. Now, your last question. Your last point you made, does the monsoon impact? The monsoon impacts insofar as execution is concerned. Insofar as solar pumps is concerned, if it's raining very heavily in an area, obviously you can't go and install a solar pump because the place would be wet. That does tend to impact, but otherwise not really so much.

Speaker #3: Right? So obviously we don't want to get into any business in which our ROC is not good. So the ROC is good as as we've seen so far.

Speaker #3: Now sorry last question. Sorry one last point you made does the monsoon impact? The monsoon impacts in so far as execution is concerned. So so far as solar pumps is concerned if you if it's raining very heavily in an area obviously you can't go and install a solar pump because the place will be wet and you know so that that does tend to impact but otherwise not really so much.

Speaker #3: Maybe even a solar rooftop. If it's raining very heavily, obviously you can't go and put up a unit at the top of the house because the cement won't dry.

Promeet Ghosh: Maybe even a solar rooftop, if it's raining very heavily, obviously you can't go and put up a unit at the top of the house because the cement won't dry. Other than that, from a demand point of view, it doesn't really impact.

Speaker #3: But other than that, from a demand point of view, it’s not really understood.

Keyur Pandya [Investment Analyst: Understood. Sir, just once on the profitability versus the respective margin segment margin. Second question is that you mentioned that you have taken necessary price hikes, specifically in ECD where hikes were required were much higher. From Q1 levels, any incremental hikes? Basically cumulative impact of incremental hikes, any drop in RM prices. Net, what should we expect in terms of profitability?

Keyur Pandya: Understood. Sir, just once on the profitability versus the respective margin segment margin. Second question is that you mentioned that you have taken necessary price hikes, specifically in ECD where hikes were required were much higher. From Q1 levels, any incremental hikes? Basically cumulative impact of incremental hikes, any drop in RM prices. Net, what should we expect in terms of profitability?

Speaker #2: Sir, just one—so, on the profitability versus the respective margin, segment margin. And second question is that you mentioned that you have taken necessary price hikes, specifically in ECD, where hikes required were much higher.

Speaker #2: So, considering from Q1 levels, any incremental hikes—so, basically, the cumulative impact of incremental hikes—any drop in RM prices, net-net, what should we expect in terms of profitability?

Speaker #3: No so fundamentally when it comes to price increases we would be disciplined. We have always said unit economics is important and if if the commodity cost increase and net of savings if there is a pass on that needs to be done we'll be disciplined to make that end.

Kaleeswaran Arunachalam: No, Teju, fundamentally, when it comes to price increases, we would be disciplined. We have always said unit economics is important and if the commodity costs increase and net of Unnati savings, if there is a pass-on that needs to be done, we'll be disciplined to make that add-on. That's not going to be left to subsidize. Coupled with that, when the revenue goes up, operating leverage also kicks in, that should help us to move the margins in the right direction as we have been seeing. This quarter also, you've already seen 35 expansion in EBITDA margin. As we move forward, we would be disciplined on that in the coming quarters also.

Speaker #3: So that's not going to be left to subsidize. Coupled with that when the revenue grows up operating leverage also kicks in and that should help us to move the margins in the right direction as you have been seeing.

Speaker #3: So, this quarter also, you've already seen a 35 basis point expansion in EBITDA margin. As we move forward, we would be disciplined on that in the coming quarters also.

Speaker #3: I don't know if you meant in solar business in the solar business actually that is as you are aware it doesn't work to the same impact a large cost of this is panels the pricing trajectory of panels coming down also bolstered by the fact that now we have two businesses both of which have large volume so our ability to negotiate with these solar panel suppliers is better.

Promeet Ghosh: I don't know if you meant in solar business. In the solar business actually, that is, as you are aware, it doesn't work to the same impact. A large cost of this is panels. The pricing trajectory of panels is actually coming down.

Kaleeswaran Arunachalam: Yes.

Promeet Ghosh: Bolstered by the fact that now we have two businesses, both of which have large volume. Our ability to negotiate with the solar panel suppliers is better. The same thing that we talked about price, cost increases don't necessarily apply to our renewable business.

Speaker #3: So the same thing that we talked about price cost increases don't necessarily apply to our renewables.

Speaker #2: Okay thank you and all the best.

Keyur Pandya [Investment Analyst: Okay. Thank you, and all the best.

Keyur Pandya: Okay. Thank you, and all the best.

Kaleeswaran Arunachalam: Ashish, you can go ahead with the next question. Ashish, can you unmute and go ahead with the next question?

Swetha Sagar: Ashish, you can go ahead with the next question. Ashish, can you unmute and go ahead with the next question?

Speaker #1: Harshish you can go ahead with the next question. Harshish can you unmute and go ahead with the next question?

Speaker #4: Hi can you hear me now? Yeah. So my question was on the 200 crore discussion so as you pointed out that this was largely because of you know just the impact on primary sales and tertiary sales has not been impacted which would then imply that maybe the channel inventory would have depleted and in that case is it fair to assume that a large part of it will you know kind of come back in 2Q 3Q or this is not going to come back?

[Analyst] (ICICI Securities): Hi, can you hear me now?

Swetha Sagar: Hi, can you hear me now?

Kaleeswaran Arunachalam: Yeah.

[Analyst] (ICICI Securities): My question was on the INR 200 crore discussion. As you pointed out that this was largely because of just the impact on primary sales and tertiary sales has not been impacted, which would then imply that maybe the channel inventory would have depleted. In that case, is it fair to assume that a large part of it will kind of come back in Q2, Q3, or this is not going to come back?

[Analyst 2]: My question was on the INR 200 crore discussion. As you pointed out that this was largely because of just the impact on primary sales and tertiary sales has not been impacted, which would then imply that maybe the channel inventory would have depleted. In that case, is it fair to assume that a large part of it will kind of come back in Q2, Q3, or this is not going to come back?

Speaker #3: See no not necessarily. There is there is a mix of these two. The channel inventory as it depletes if you are you made some primary sales if you're not able to make adequate primary sales the channel will replenish from other sources.

Promeet Ghosh: See, no, not necessarily. There is a mix of these two. The channel inventory as it depletes, if you made some primary sales, if you are not able to make adequate primary sales, the channel will replenish from other sources. Right? Let's understand that. For a bit, there will be a momentary replenishment of stock. The market share impact I don't think is abiding because when Crompton comes back into the market, Crompton being Crompton, obviously it's a strong brand. As our ability to sell improves, we are obviously able to claw back that position.

Speaker #3: Right? So let's understand that. So for for for a week there will be a momentary whatever replenishment of of but the market share impact I don't think is abiding because that you know when Crompton comes back into the market Crompton being Crompton obviously it's a strong share.

Speaker #3: So as our as our ability to sell improves here obviously able back that position.

Speaker #4: So so just to be clear I mean I market share of course remains or you know grows but this is like a loss sales.

[Analyst] (ICICI Securities): Just to be clear, market share, of course, remains or grows, but this is like a loss sale. This most likely does not come back. Is that a fair-

[Analyst 2]: Just to be clear, market share, of course, remains or grows, but this is like a loss sale. This most likely does not come back. Is that a fair-

Speaker #4: This most likely does not come back. Is is that a yes.

Speaker #3: Yeah. Harshish we are in a seasonal business and Q1 is a season for pants and you would have seen that some of these are seasonal impact that will not be something that you'll recover on a quarter on quarter basis.

Kaleeswaran Arunachalam: Ashish-

[Analyst] (ICICI Securities): Yeah.

[Analyst 2]: Yeah.

Kaleeswaran Arunachalam: Yeah. Ashish, we are in a seasonal business. Q1 is a season for fans, and you would have seen that some of these are seasonal impacts that will not be something that you'll recover on a quarter-on-quarter basis. As we go into Q2, there are momentum that we are seeing in certain categories like BLDC that we said, which will continue to grow as we accelerate supplies. I don't think you need to connect both as whether it is a demand that is delayed or supply that is delayed. It's an ongoing business call.

Speaker #3: But as we go into Q2 there are momentum that we are seeing in certain categories like BLDC that we said which will continue to grow as we accelerate supplies.

Speaker #3: So, I don't think you need to connect both, as whether it is a demand that is delayed or supply that is delayed, it's an ongoing business call.

Speaker #4: Got it. And just on the last bit on the margins part, on the renewable business—what are the margins, I mean broadly, just compared to the category? Is it—because I understand it's a high RoCE business, but purely from a margins point of view—because, you know, at least solar rooftop will start showing in a big way over the next two quarters.

[Analyst] (ICICI Securities): Got it. Just last bit on the margins part on the renewable business. What are the margins, broadly just compared to the category? I understand it's a high ROC business, but purely from a margins point of view, because at least solar rooftop will start showing in a big way over the next 2 quarters. Is it materially different than the category margin?

[Analyst 2]: Got it. Just last bit on the margins part on the renewable business. What are the margins, broadly just compared to the category? I understand it's a high ROC business, but purely from a margins point of view, because at least solar rooftop will start showing in a big way over the next 2 quarters. Is it materially different than the category margin?

Speaker #4: So just is it you know materially different in the category margin?

Speaker #3: It is similar to the company EBITDA margins. Otherwise we don't disclose the segment subsegment wise results Harshish. The gross margin is lower but obviously but the on the EBITDA line it is similar.

Kaleeswaran Arunachalam: It is similar to the company EBITDA margin. Otherwise, we don't disclose the sub-segment-wise results, Ashish.

Promeet Ghosh: The gross margin is lower.

Kaleeswaran Arunachalam: EBITDA line

Promeet Ghosh: On the EBITDA line, it is similar.

[Analyst] (ICICI Securities): Sure. That's helpful. Thank you so much.

[Analyst 2]: Sure. That's helpful. Thank you so much.

Speaker #4: Sure, that's helpful. Thank you so much.

Speaker #1: Sir, before we end the call we would like to request you for some closing comments.

Swetha Sagar: Sir, before we end the call, we would like to request you for some closing comments.

Promeet Ghosh: Thank you everyone for joining. As you know, you are already aware, it's been a very interesting quarter for us. This is going to be an even more interesting quarter, I think, because of what you will see happening on brand, et cetera. Further, if you have any queries, please feel free to reach out to Kalis, Ruchir, or Rishabh. They're always available. Thank you, and have a good evening.

Speaker #3: Thank you everyone for joining. As you know you are already aware it's been a very interesting quarter for us. This is going to be an even more interesting quarter I think because of I think what you will see happening on brand etc.

Speaker #3: And further you if you have any queries please feel free to reach out to Kali's, Ruchir or Rishabh they're always available and thank you and have a good evening.

Speaker #2: Thank you.

Kaleeswaran Arunachalam: Thank you.

Speaker #3: Very excellent. I I said I said that we have we have a limited investor meeting where we are planning as I said earlier to give investors a peek into how Crompton's changed over the last three years also give them a sense of a deeper sense of what we're doing in each category as well as hear from the management team of Crompton from the horses not so to say.

Promeet Ghosh: Sorry, I said?

Kaleeswaran Arunachalam: Anything before we-

Promeet Ghosh: I said that we have a limited investor meeting where we are planning, as I said earlier, to give investors a peek into how Crompton changed over the last three years. Also give them a deeper sense of what we're doing in each category, as well as hear from the management team of Crompton, from the horse's mouth, so to say. Yeah. Hopefully, you guys will enjoy that, and at least some of you will be there. The invitations for that, I guess, have already gone out. Yeah. This is not something that we've done ever before, as I understand. Yeah. We've been planning this for a while. As some of you will be aware, this was planned about eight, nine months ago. Didn't happen at that time. Maybe a year ago, actually.

Speaker #3: So yeah hopefully you guys will enjoy that and at least some of you will be there. The invitation for that I guess I've already gone out.

Speaker #3: Yeah. This is not something that we've done ever before as I understand. So yeah we've been planning this for a while as some of you will be aware we had this was planned about eight nine months ago it didn't happen at that time because of some other maybe a year ago.

Speaker #3: Actually it didn't happen at that time but been a long time coming. Thank you. Thank you. Thank you.

Promeet Ghosh: It didn't happen at that time. Been a long time coming.

Kaleeswaran Arunachalam: Thank you.

[Analyst] (ICICI Securities): Thank you.

[Analyst 2]: Thank you.

Swetha Sagar: Thank you very much.

Speaker #2: Thank you. Thank you.

Kaleeswaran Arunachalam: Thank you.

Swetha Sagar: Goodbye

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Q1 2027 Crompton Greaves Consumer Electricals Ltd Earnings Call

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Crompton Greaves

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