Crompton Greaves Consumer Electric Co., Ltd. is expected to benefit from more premium products and new releases in the near future. The company’s management discussed new launches and innovations at a recent analyst meeting as it prepares for new launches and innovations for the coming summer.
Crompton pioneered the launch of Nucleus, an in-house premium BLDC platform in India. Under this platform, the company launched two products that save up to 60% of energy in addition to other features such as high-efficiency motors and smart connections. The company also launched the advanced induction motor platform XTECH. Both platforms will be made in-house, which should help Crumpton have better control over the supply chain.
“In fiscal year 24, ₹$75 billion (about 10%) is valued from new products. The R&D team is now at 200 (FY141) with AGR at CAGR.
The new platform will also support Crompton’s efforts to expand its premium products. Please note that senior fans have a growth rate of 2.5 times and a 2.5 times price. Crompton has earned about 25% of its fan revenue from premium products and aims to increase this share to 40% in the coming years.
To be sure, the company’s ECD segment remains a highlight, with revenue and EBIT rising 14% and 27% year-on-year in the nine months ending December (9MFY25). ECD contributes nearly 76% and 86% of the company’s total revenue and EBIT. The ECD segment is fan, pump, appliance and built-in kitchen applications. Among pumps, the prospects for solar pumps are promising.
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Butterfly business
The other two parts of Crampton are lighting and butterflies. Lightning revenue increased by 4% year-on-year in the first nine months of fiscal 25 (9MFY25), but its EBIT fell by 6%. With the realization under pressure, the lightning segment is suffering.
The Butterfly Enterprise, acquired by Crompton several years ago, has undergone a restructuring, which includes narrowing its institutional and corporate operations and increasing retail sales. The business shows encouraging signs of recovery. Butterfly’s revenue fell 14% at 9MFY25, and the revenue was slower in the December quarter (Q3FY25). The business is expected to report growth in the next few quarters.
On the other hand, the delay in butterfly synergies and/or overall demand weaknesses are key risks for Crumpton stock. The company’s stock has fallen nearly 20% so far in 2025, even as investors hold 10% returns over the past year.
“We love Crompton’s drive to innovation/premium and focus on new segments (solar pumps),” Kotak Institution Stock Report dated February 28. After a recent stock correction, Crompton is now trading at about 30 times a year forward price.
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