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Near term optimism will be led by solar products

Quick Pointers:

* ECD down 1.5% YoY due by weak performance in fans & LDA due to monsoon

* Solar portfolio is expected to become Crompton’s second-largest segment

CROMPTON’s ECD segment declined by 1.5% due to prolonged monsoons and fans saw single digit de growth; while margin contracted 430bps due to commodity prices and operating leverage. SDA posted double-digit growth, LDA saw de-growth, and large kitchen appliances delivered a strong 34% QoQ growth. Lighting grew 3.1% YoY, driven by high-teen volume growth, with both B2B and B2C delivering strong performance. Company has implemented price hike of ~1.4% in Fans segment in Nov’25. CROMPTON is gaining strong traction in its solar portfolio with strong orders, securing nearly Rs5bn of rooftop orders within a month and rapidly scaling both Solar pumps and Solar rooftop segments. Butterfly grew 13.3%, with core categories delivering double-digit growth supported by sustained volumes and new product launches. Inventory levels remain reasonable, with initiatives under Utkarsh 1 & 2. We estimate revenue/EBITDA/PAT CAGR of 12.3%/13.0%/15.8% over FY25-28E. We downward revise FY27/FY28 earnings by 4.8%/3.8%. We maintain ‘BUY’ rating with revised TP of Rs375 (Rs391 earlier), based on 30x Sep’27 earnings.

Revenue up 1.0% YoY, PAT down 43.0% YoY: Revenue grew by 1.0% to Rs19.1bn (PLe: Rs19.8bn). Gross margin stood at 31.6% (PLe: 32.4%), down by 110bps YoY. EBITDA declined by 22.1% to Rs1.6bn (PLe: Rs1.9bn) with EBITDA margin contracting 250bps YoY to 8.3% (PLe: 9.4%). PAT declined by 43.0% to Rs711mn (PLe: Rs1.2bn)..

ECD sales down 1.5%, lighting sales up 3.1% YoY: ECD segment declined 1.5% YoY to Rs13.7bn (PLe: Rs14.6bn). Fans saw single-digit degrowth because of prolonged monsoons while BLDC continued to see strong traction. Pumps delivered mid-teen growth, supported by strong momentum in solar pumps, which recorded 2x revenue growth. SDA grew in double digits, supported by new launches and festive campaigns. LDA recorded a de-growth due to erratic weather, competitive discounting, and inventory challenges. Lighting revenue grew by 3.1%YoY to Rs2.6bn. (PLe: Rs2.6bn), while B2C lighting growth driven by ceiling and street/flood lights. ECD EBIT margin contracted by 430bps to 10.6%. EBIT margin in lighting expanded by 480bps YoY to 15.5%.

Concall Takeaways: 1) Ceiling fans declined in single digits due to monsoons, and margins were pressured by TPW fans. 2) Solar pumps recorded 2x revenue growth, with market share of ~6-8%. 3) Solar rooftop segment secured its first order of Rs520mn, followed by additional orders of Rs4.45 bn, taking the aggregate order value to ~Rs5bn. 4) Company has implemented price hike of ~1.4% in Fans segment in Nov’25. 5) Company transitioned its Baddi facility from the lights segment to fans, resulting in a 50% increase in plant capacity. 6) The company has implemented two internal projects, Utkarsh 1 focuses on stocking/destocking efficiency, while Utkarsh 2 for manufacturing of new BEE-rated fans. 7) Lamps and battens now account for ~40% of the B2C lighting, down from ~65% earlier. 8) Inventory levels remain reasonable, supported by initiatives under Utkarsh 1 & 2. 9) Large Kitchen Appliances grew 34% QoQ, led by strong traction in the chimney portfolio.

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