Crompton Gr. Con Q2 FY27 Earnings Call — Analysis (NSE: CROMPTON)
Crompton delivered 18.2% revenue growth to ₹2,263 Cr and 24.1% EBITDA growth in Q2FY27, successfully passing on ~80% of raw material cost inflation while expanding in new vectors like solar rooftops and wires.
Result quality: strong — Margin expansion. Management sentiment: optimistic.
The take
Q2FY27 Consolidated Revenue ₹2,263 Cr ( +18.2% YoY ) . New guidance — Q3FY27-Q4FY27 ap solar rooftop order completi… ~₹450 Cr . New story: Lean working capital model resilience .
Results
Revenue grew 18.2% YoY to ₹2,263 Cr; EBITDA rose 24.1% YoY to ₹205 Cr with margins expanding 40 bps YoY to 9.0%.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated Revenue | ₹2,263 Cr | +18.2% | yoy · Q2FY27 · vs Q2FY26 |
| Consolidated EBITDA | ₹205 Cr | +24.1% | yoy · Q2FY27 · vs Q2FY26 |
| EBITDA Margin | 9.0% | +40bps | yoy · Q2FY27 · vs Q2FY26 |
| PBT (ex-exceptional) | na | +36.2% | yoy · Q2FY27 · vs Q2FY26 |
| PAT | na | +65.0% | yoy · Q2FY27 · aided by base ₹20 Cr Baroda plant exceptional |
| ECD Segment Revenue | na | +19.4% | yoy · Q2FY27 · vs Q2FY26 |
| ECD EBIT Margin | 11.6% | +na | yoy · Q2FY27 · EBIT up 30.7% YoY |
| Lighting Revenue | ₹298 Cr | +14.3% | yoy · Q2FY27 · vs Q2FY26 |
| Lighting EBIT Margin | 12.9% | −na | yoy · Q2FY27 · impacted by pre-contracted B2B orders |
Guidance
Management reiterated Crompton 2.0 targets of doubling revenue at ~15% CAGR with an ambition to achieve 11-12% EBITDA margins by FY29.
What management committed to
- [Crompton's] AP government solar rooftop order is expected to be fully executed in the coming quarter [Q3FY27] with some spillover into the quarter thereafter [Q4FY27]. — ~₹450 Cr, Q3FY27-Q4FY27
- [Crompton] expects export momentum, which delivered over 70% YoY growth and the highest-ever quarterly revenue in Q2FY27, to continue to build over the next couple of years, representing a significant opportunity. — FY28-FY29
- [Crompton's] solar pump business is expected to ramp up in the coming quarters as order inflows from Kusum 2.0 pick up in the next quarter [Q3FY27]. — Q3FY27-Q4FY27
- [Crompton] will try to keep absolute A&P spend for FY27 similar to the FY26 level of around ₹250-260 Crores. — around ₹250-260 Crores, FY27
- [Crompton] will continue to pass on future commodity cost increases net of Unnati cost savings through price increases, maintaining a disciplined pricing approach. — H2FY27 onwards
Key themes
Pricing discipline, new category expansion, operating leverage
How the narrative shifted
- Lean working capital model resilience: Previously defensive on inventory-light model causing sales loss; now confidently states supply chain issues are resolved and inventory normalized, validating the model's resilience.
- Commodity inflation and pricing pass-through: Quantified pass-through at 80% and cumulative price hikes at 15-16%, moving from qualitative discipline to concrete execution metrics.
- Brand transformation and premiumisation: Brand refresh launched in August, shifting from a future promise to a completed investment whose returns are validated by volume growth amidst price hikes.
- BLDC fans growth inflection: Growth continues at 40% YoY with added detail on portfolio interventions and reach driving momentum.
- Solar rooftop B2G execution and B2C entry: B2G execution surpassed 50% completion; B2C/C&I rollout now live in seven states, evolving the narrative from an order backlog to a credible dual-segment operational business.
- Butterfly core category revival: Added specific growth vectors (Idea First series, pressure cooker GST benefit, infrared cooktop opportunity, national expansion via Maharashtra), showing a multi-lever strategy for sustained mid-teens growth.
- Capital allocation discipline and greenfield capex: Greenfield evaluation advanced to include wires; LKA restructuring explicitly framed as a capital allocation lesson, reinforcing the leverage-first principle.
- Regulatory tailwind in fans (BEE norms): BEE star-rating norms expected to consolidate the entry fan segment, driving volume growth for organized incumbents.
- International business scaling: Elevated from a minor mention to a fully articulated growth vector with a dedicated team, market-specific traction, and a multi-year opportunity framing.
- Platform leverage for new business entry: Explicitly codified as a strategic principle; contrast with prior LKA standalone approach used to illustrate the efficiency of leveraging existing go-to-market and backend infrastructure for new categories.
Operational commentary
- Integrated Large Kitchen Appliances (LKA) and Rhion operations under Butterfly leadership to cut overhead and curb ₹16–25 Cr EBITDA loss run-rate.
- Extended the wires business from South India into Punjab, Delhi-NCR, and Gujarat following strong initial traction.
- Executed over 50% of the Andhra Pradesh government solar rooftop order (38,000 units total, >20,000 completed); rolled out B2C and C&I solar rooftop models across 6–7 states.
- Exports surged over 70% YoY to record highest-ever quarterly revenues, driven by fan exports to Middle East, Africa, and South Asia.
- Evaluations for a greenfield manufacturing plant for fans, appliances, and wires are in advanced stages.
Analyst Q&A
Q. Quantum of revenue recognized from the AP solar rooftop contract in Q1 vs Q2, and margin dynamics of execution.
Management clarified that over half the 38,000 units are executed across Q1 and Q2 (larger share in Q2), with remaining completing next quarter with minor spillover; installation is handled via partner agency, flowing from gross margin straight to EBITDA.
Q. How pricing actions and inflation pass-through are impacting volume growth across ECD categories.
Management confirmed ~80% of commodity cost increases have been passed on via 11-16% cumulative price increases across businesses (17-18% in fans), while underlying volumes remain positive across General Trade and rural channels.
Q. Driver of volume growth for fans given high existing household penetration.
Reiterated growth levers including BLDC transition, regulatory shifts driving consolidation in economy/standard segments, and strong traction in Table/Pedestal/Wall fans, targeting 1.5x-1.7x category growth.
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