Strong YoY growth masks Q-o-Q PAT decline; margin expansion and new ventures ahead

Delivered result shows ₹2263.3 Cr, YoY +18.2%

EBITDA ₹205 Cr reported, 24.1% YoY growth, margin expansion evident

Delivered PAT ₹124.4 Cr with 64.9% YoY growth; NPM 5.5%

Call states half already executed over last quarter and this quarter; pace faster than prior 6-8 month timeline

Management confirms 15-16% range, 80% cost pass-through in Q2; commodity increases absorbed into margin

Q2 delivered +18.2% revenue, but QoQ PAT declined 12.8%, suggesting Q1 was stronger

Launched new monogram Cephyr, rebranding as part of Crompton 2.0 innovation agenda. Expected to drive consumer differentiation and margin.

Wires extended to Punjab, Delhi NCR, Gujarat; solar rooftop B2C/C&I commenced in 6 states (vs pilot in prior quarter). >50% order book with AP government.

LKA & Rhion being restructured under Butterfly ecosystem leadership. Expected to reduce cost structure and improve profitability. Mid-teens growth maintained at 15.9% YoY.

15-16% cumulative price hikes over 9 months (Feb-Oct); 80% cost pass-through in Q2. Tone shifted from supply-driven inflation pressure to deliberate pricing strategy with market acceptance.

Price hikes 15-16% across segments over 6 months (Feb-Jun); ~80% passed through in Q2 FY27. Vigilant on cost pass-through; pricing actions continuing but commodity unpredictability remains.

Half executed over last quarter and this quarter; pace faster than 6-8 month original plan. Will largely complete in coming quarter with some spillover. B2C and C&I commenced in 6 states.

Fans took ~15%, others (lighting, non-lighting) took 15-16%. Lighting margins preserved vs rest of business. Price increases a continuing process but will be disciplined.

₹26,000 crore business for solar rooftops. B2C/C&I both high-ROCE, strong cash flows; adjacency to Butterfly. Potential much larger; installed base scales adjacency benefit. FY29 target not given but growth expected to sustain.

Rs. 1.8 lakh per 3KW household; government subsidy + consumer cost. Installation done via agency partnership (not direct Crompton); high ROCE, cash-positive model, service component builds loyalty.

Inventory normalized by Q2 FY27 end (same as year-ago levels). Supply disruptions fully resolved. Days of inventory similar to prior year.

Exports mostly in Africa, Middle East, South Asia (Fans, LDA, SDA). Margin profile similar to domestic, slightly lower (no credit given in export). Confidence in >2-year sustained growth trajectory. Largest ceiling fan company globally.

A&P spend includes brand refresh (one-time) and repositioning of e-commerce (tactical, not A&P). Historically ₹250-260 Cr run rate; H1 was ₹100 Cr due to brand investments. Will stabilize closer to historical levels.

Crompton 2.0 strategy doubles revenue (6% baseline to 2.5x = 15%+ mid-teens growth). Margin expansion on scale + operating leverage + cost initiatives. Phase 1 of Crompton 2.0 was 6% growth; raising by 2.5x focus on innovation, brand, people.

Butterfly core grew at 16% due to price-led growth. Idea First series drives growth; infrared cooktop emerging opportunity (one-time spike seen, now normalized). Distribution expansion (south to north/west) early stage. Mix of price, volume, new category.

Fans volume growth robust across general trade and rural due to leadership position. Price hikes 17-18% in Fans taken, accepted due to brand strength and BLDC positioning. Insofar lighting price hikes (12.9% lower) due to B2B headwinds and pre-contracted orders.

Crompton 2.0 strategy targets 2.5x growth acceleration from 6% baseline to mid-teens. No specific FY27 target numeric articulated; framed as structural outcome of strategy execution.

Long-term target; contingent on Crompton 2.0 execution, operating leverage on revenue base ~15% CAGR, and margin initiatives (Unnati cost program, operating leverage). Q2 EBITDA margin 9% (40 bps expansion).

Fans, appliances, wires manufacturing scale-up planned. No capex amount or timeline articulated. Leverage existing Butterfly and outsourcing model for cost efficiency.

Management cited challenging macro on commodity costs and geopolitical developments. While 80% cost pass-through achieved, further commodity spikes or inflation could pressure margins if pricing elasticity breached.

Wires and Solar Rooftop nascent with ~10% of Q2 revenue; B2C/C&I in 6-state early-stage rollout. Scaling to 14-15% of revenue long-term while maintaining consolidated margin requires flawless execution and market adoption.

15-16% cumulative price hikes over 9 months absorbed in Q2, but QoQ PAT decline (-12.8%) raises flag that Q1 was abnormally strong (possibly peak of price-taking window). Further price increases or macro slowdown could trigger volume deflation.

Solar pumps slowed due to Kusum 1.1 completion; Kusum 2.0 ramp uncertain and dependent on government rollout pace. Order visibility limited; execution timelines subject to government cadence.

Q2 PAT down 12.8% QoQ despite 18.2% YoY growth. Management did not address this reversal in opening remarks or Q&A, raising flag that H2 may face demand softening or cost headwind intensification.