Crompton’s consumer durables business on track, but Butterfly recovery is taking longer

livemint.com:

Subscribe to enjoy similar stories. Crompton Greaves Consumer Electricals Ltd’s shares have gained 9% since its September quarter results (Q2FY25) were released around mid-November. Consolidated gross margin expanded year-on-year, pushing Ebitda growth to 16.5%, ahead of 6% revenue growth.

This could be exciting for investors, coupled with the fact that Crompton’s electric consumer durables (ECD) business saw double-digit revenue growth for the fifth straight quarter. ECD revenue rose by 12.5% in Q2 to ₹1,393 crore or 73% of consolidated revenue. This was led by 26% and 20% growth in appliances and pumps, respectively.

Also read: Indian stock markets get a band-aid, but chronic pain remains The fans segment, ECD’s largest revenue contributor, saw growth moderate to 5% after clocking far higher 16% growth in the June quarter. The non-ceiling fans portfolio did well in Q2. Also, launches in the premium segment such as Swirl, Aura and Santos led to a better premium mix.

Crompton’s management pointed out that it has been hiking prices of fans regularly, but has observed that sometimes, particularly in Q2, that there has been a lag in several competitors undertaking price hikes. Crompton’s remaining revenue comes from the lighting and Butterfly businesses, each of which contributed 13% of Q2 revenue. Strong delivery in the business-to-customer (B2C) segment helped on-year revenue growth in lighting improve to 6% from 2% in the June quarter.

Kitchenware maker Butterfly is yet to see a marked recovery, with its business in the midst of a refresh. Butterfly revenue has fallen about 18% in each of the past two quarters. Similar to Q2, Crompton’s consolidated profit growth was stronger than revenue growth in the first half of