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Ambitious growth targets, execution remains key

We attended the analyst meet of CROMPTON, where the management outlined its “Crompton 2.0” strategy focused on protecting and growing core categories, scaling emerging businesses, and entering new attractive whitespaces. The management has guided for revenue CAGR of 14-15% till FY29 and 2x revenue by FY31, and exit EBITDA margin of 11-12% and 12%+, supported by premiumization, new product development (NPD)-led growth, broader distribution and operational excellence. The company has partnered with a Korea-based company to enter the water purifier segment, further expanding its TAM following its entry into wires and solar products, which are relatively low-margin segments. The company continues to expand its TAM to INR1600bn through new categories such as wires, solar products and water purifiers, while targeting market-share gains through premiumization, NPD-led growth and distribution expansion. Despite the company’s focus on premiumization and NPD across all categories, execution remains key to delivering its ambitious growth targets, given the scale-up required across new businesses. We estimate revenue/EBITDA/PAT CAGR of 14.8%/20.0%/20.7% over FY26-28E. We maintain our estimates and ‘BUY’ rating with TP of INR330, based on 28x Mar’28E earnings.

Key takeaways

NPD emerging as a key growth driver with execution risk: NPD is expected to emerge as a key growth driver for CROMPTON, with the management targeting higher NPD contribution across key categories to drive premiumization and market-share gains. However, NPD could pose a key execution risk to CROMPTON’s growth ambitions, given the significant increase in NPD contribution targeted across all major categories. FY31 NPD contribution targets are as follows:

* Fans: 20% of sales, +900bps vs. FY26

* Large Domestic Appliances: 29% of sales, +500bps vs. FY26

* Pumps: 18% of sales, +500bps vs. FY26

* B2B Lighting: 20% of sales, +500bps vs. FY26

Premiumization driving value growth:

Premiumization is expected to be a key growth lever, supported by rising consumer aspirations, product innovation and increasing penetration of premium categories. The management is targeting a higher premiumization mix across key categories, which will support revenue growth and improve product mix. In Fans, Pumps and Large Domestic Appliances, premiumization is expected to drive higher value realization and strengthen market positioning. FY31 premiumization contribution targets over FY26 levels are as follows:

* Fans: 30% of sales, +500bps

* Large Domestic Appliances: 38% of sales, +300bps

* Pumps: 35% of sales, +700bps

* B2C Lighting: 52% of sales, +500bps

Focus on increasing market share: Market-share gains are expected to be a key growth lever, supported by premiumization, NPD, distribution expansion and entry into new sub-segments. is targeting market share gains across key categories, which should support revenue growth and strengthen its competitive positioning. By FY31, the company targets a 100 bps+ market-share improvement in Fans, 250 bps in Non Solar Pumps, 120bps in Water Heaters, 200bps in Air Coolers, and 250 bps in B2B Lighting over FY26 levels.

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