Crompton Greaves - Butterfly Gandhimathi To Be A Near-Term Drag: HDFC Securities

Crompton Greaves – Butterfly Gandhimathi To Be A Near-Term Drag: HDFC Securities

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We met the management of Crompton Greaves Consumer Electricals Ltd. which reiterated its commitment to an absolute profit-led growth mindset. The summer season has started on a positive note and Crompton has taken a 4-5% price hike in fans (cumulatively over the last few months) which has helped recoup all but 150 bps cost increase (BEE rating change led).

In the medium term, fans are poised for double-digit growth, led by-

  1. an increasing premium mix (25% versus industry average of 40%);

  2. a shift from unorganised to organized (BEE rating change every two years); and

  3. focus on scaling up the non-ceiling portfolio.

Other ECD products (pumps, SDA and LKA) are showing promising trajectories. In lighting, price erosion intensity has reduced and it is expected to be MSD-to HSD in FY25.

Butterfly Gandhimathi Appliances Ltd. channel correction is a WIP (away from ecom/corporate/OMC in favour of retail) and will continue to impact earnings for two more quarters.



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