Crompton Q1 growth supported by BLDC fans and Solar Rooftop order book

Investment View and Valuation

PL Research maintained its BUY rating on Crompton Greaves Consumer Electricals following the August 7, 2026 Q1 FY27 result update and raised its target price to Rs 330 from Rs 319. The revised target is based on 28 times March 2028 earnings.

The broker described the outlook as constructive despite moderation in Electric Consumer Durables (ECD) growth. It forecasts revenue, EBITDA and PAT compound annual growth of 14.8 per cent, 20.0 per cent and 20.7 per cent, respectively, over FY26-FY28E.

Q1 FY27 Financial Performance

Crompton Greaves Consumer Electricals reported strong Q1 FY27 operating performance, with revenue, EBITDA and reported PAT ahead of PL Research's estimates. EBITDA margin expanded year-on-year, although gross margin declined.

Segment Performance and Growth Drivers

Electric Consumer Durables: ECD revenue grew 10.6 per cent year-on-year to Rs 17,541 million, while EBIT margin expanded 20 basis points to 13.5 per cent. BLDC fans were the key growth driver, recording about 44 per cent growth following the launch of five new models. Management expects premium fans to remain an important growth lever. Ceiling Fans and Pumps continued to gain market share, while Domestic Appliances delivered double-digit growth led by Water Heaters.

Lighting: Revenue rose 15.4 per cent year-on-year to Rs 2,688 million, supported by double-digit growth in both B2C and B2B. However, Lighting EBIT margin contracted 70 basis points to 12.0 per cent as B2B executed legacy orders booked at lower prices.

Butterfly Products: Revenue increased 18.4 per cent to Rs 2,121 million, supported by broad-based channel growth and market-share gains in mixer grinders, pressure cookers and glass cooktops. EBIT margin was flat year-on-year at 4.2 per cent.

Management Outlook and Investments

• High single-digit to low double-digit price increases have been implemented across categories, offsetting about 80 per cent of raw-material inflation.
• The Solar Rooftop business remains in ramp-up mode, with an order book of about Rs 5 billion. About Rs 4.5 billion of this order book is expected to be executed within six to eight months.
• Management plans to invest about Rs 3.5 billion over the next two to three years in a greenfield manufacturing facility and a large warehouse.

Key Near-Term Concerns

• About Rs 2 billion of ECD primary sales were lost in Q1 FY27 because of supply disruption arising from commodity-availability constraints.
• Commodity inflation has not been fully offset by pricing.
• Lighting B2B profitability may remain under pressure because of lower-priced legacy orders.

Earnings Estimates

PL Research reduced its FY27E and FY28E sales estimates by 3.1 per cent and 3.6 per cent, respectively. Improved margin assumptions partly offset the sales reduction, resulting in FY27E and FY28E EPS cuts of 2.0 per cent and 1.7 per cent.