Pricing Power Real, but ₹200Cr Supply Miss Tempers Bullishness

ECD 10.6%, Lighting 15.4%, Butterfly 14% YoY growth—all positive but ECD slowest

EBITDA ₹224 Cr, 10.0% margin (up 20 bps)—matches claim exactly

Margins expanded only 20 bps despite 11.8% revenue growth; pricing real but leaves 20% cost uncovered

Supply shortage confirmed; tertiary growth positive across categories, suggesting demand wasn't destroyed—claim plausible but represents 8.9% of revenue miss

No exact subsegment breakdown in P&L, but management stated 45% growth as fact—unverified but not contradicted

Stated as major milestone; no market share data provided to verify, but claim consistent with domestic appliances strong growth

Reported revenue ₹214 Cr, 14% growth; 18% excl. internal sales—math consistent with claim

Prior guidance 9-12 months for ₹500 Cr; now ₹450 Cr in 6-8 months. Execution ramp-up faster, but revenue recognition still deferred to Q2 (installation basis).

Portfolio grew 45% Q1; management frames as 'journey just beginning.' This wasn't highlighted as a multi-quarter target previously; now emerging as major growth driver.

8-12% price hikes accepted by market (per Q2 guidance commentary). Covered ~80% of cost inflation; remainder via operating leverage & cost initiatives.

₹200 Cr sales loss confirms negative working capital model can backfire in commodity shocks. Management committed to 'asset-light' approach despite this quarter's hit.

Supply disruptions cost us ~₹200 Cr in sales order-of-magnitude. We lost some sales but maximized revenue given constraint. Lean model historically gives better ROCE & cash flow, which we've kept to.

₹500 Cr order book remains. ₹450 Cr to execute over 6-8 months (vs prior 9-12). Q1 & Q2 bulk execution expected. B2C side also started garnering orders.

Consumption is decent. Pricing has delaying impact, not demand suppression. Tertiary growth shows categories up: Butterfly 18%, Lighting 15%, ECD 12% despite ₹200 Cr supply loss.

No significant spate of pricing increases necessary. We've been first to market, pricing settled well. Cost measures & operating leverage should help.

Core categories (85% of Butterfly) in line with competition. TTK leads in induction cooktops (not our focus yet). Our pressure cookers & glass tops outperforming peers.

EBITDA margin similar to company average. Gross margin lower (outsourced installation model). ROCE good. Not negative working capital like core business.

Channel inventory (tertiary) doesn't equal primary sales loss we discuss. It's one-off black swan event; our asset-light model works quarter-after-quarter. Won't revisit for single shock.

Launched in Tamil Nadu & Karnataka. Presence in 14 cities now. Still very small relative to ₹9,000 Cr base. Large TAM opportunity; we have right to win.

Mix of two: channel inventory depletion temporary (some replenishment); market share loss permanent (Crompton strong enough to claw back). Seasonal Q1 impact won't recover.

Government anchored (Andhra Pradesh SC/ST homes). 38k units. Payment: 40% upfront, rest on installation completion. Execution ramp-up confirmed Q1.

Pricing now settled into market. No further major hikes needed as of now (per Promeet). Operating leverage from revenue growth to drive incremental margin.

Announced in prior calls; capex discipline maintained. Current capacity expansion via optimization at existing facilities.

Copper at all-time highs; management passed 80% of cost via 8-12% price hikes. Margin expansion only 20 bps suggests pricing power has limits. ₹200 Cr supply miss partly driven by price sticker shock.

Lean working capital model (negative WC) designed for ROCE optimization. Q1 supply disruptions (commodity availability + volatility) cost ₹200 Cr in primary sales. Recurrence risk if geopolitical shocks intensify.

Butterfly grew 14% (18% excl. OEM) vs TTK 34% this quarter. Management deflects by citing focus on core categories (pressure cookers, glass tops) vs TTK's induction cooktop dominance. But gap shows market leader pulling away in some sub-categories.

₹500 Cr order book installation-based revenue recognition. Q1 minimal revenue (execution just started). Q2-Q3 bulk expected. Government anchored (Andhra Pradesh); payment 40% upfront, rest on completion. Prior solar pump delays cited; current pace improved.

Comprehensive brand architecture rehaul undertaken; first visible outcomes end-August 2026 (brand launch event). Capital market event Aug 20 to showcase 3-year transformation. Brand refresh framed as strategic catalyst, but execution & market reception unproven.