Crompton Greaves targets twofold FY31 revenue as new categories expand addressable market

Investment View and Valuation

Following Crompton Greaves Consumer Electricals Ltd.’s annual investor meet on August 20, 2026, ICICI Securities retains its BUY rating and sets a target price of Rs 300, valuing the stock at 26x FY28E EPS. The broker’s view is supported by the company’s Crompton 2.0 strategy, medium-term growth targets, margin-expansion potential and disciplined capital allocation.

Crompton 2.0 Strategy and Growth Ambition

Management is targeting a twofold increase in revenue by FY31, implying an approximately 15 per cent revenue CAGR over FY26-FY31E. It is also targeting an exit EBITDA margin above 12 per cent, compared with around 10 per cent currently.

New businesses are expected to contribute around 20 per cent of FY31 revenue, while Smart & Connected products are targeted to account for around 20 per cent of the sales mix. Core-category market-share gains, premiumisation and the scale-up of newer businesses are expected to support the growth ambition.

Distribution Network and Addressable Market

Crompton operates in electrical consumer durables and has a distribution network comprising more than 2,800 distributors, 2,70,000 retail touchpoints and over 1,300 service centres. ICICI Securities views this network, the Crompton brand and management’s execution capabilities as important advantages as the company broadens its offering.

New categories such as wires, solar rooftops, solar pumps and water purifiers are expected to more than double the company’s addressable market from around Rs 80,000 crore to over Rs 1,60,000 crore. These categories are also expected to diversify revenues and reduce weather-related seasonality.

Margin Expansion and Operating Performance

Crompton has delivered double-digit growth and a double-digit EBITDA margin for two consecutive quarters after broadly single-digit growth since FY24, despite West Asia-led volatility. ICICI Securities highlights the company’s industry-leading EBITDA margin of around 10 per cent, compared with mid-to-high single-digit margins for most peers.

Margin expansion is expected to be supported by margin-accretive new segments, premiumisation, distribution-network optimisation and operating leverage. Management has guided for an EBITDA margin of 11-12 per cent by FY29E and above 12 per cent by FY31E.

New Business Developments

Fans and Manufacturing

The company is investing Rs 350 crore in a greenfield fan facility, which is expected to begin commercial production in Q1 FY29. The facility should increase in-house manufacturing from the current level of around 50 per cent. Tighter BEE norms are also expected to consolidate smaller and unorganised fan competitors.

Solar Rooftops and Pumps

In solar rooftops, Crompton has built a Rs 500 crore B2G order book, providing six to nine months of execution visibility. The company plans to expand its B2C operations alongside B2G across 17 cities.

In solar pumps, Crompton has installed around 22,500 pumps and is targeting approximately 40,000 installations by FY27.

Water Purifiers

Crompton has launched the premium Crompton Rhion water purifier using CDI technology through a partnership with South Korea’s Sion Tech.

Butterfly Gandhimathi Appliances

Management plans to double the Butterfly Gandhimathi Appliances business in three years by expanding beyond southern India, building brand preference, scaling the design-led Idea First range and investing in capacity, branding and supply chains.

By FY31, Butterfly aims to lead its core categories, rank among the top three premium kitchen-appliance brands and derive 30 per cent of sales from new products.

Financial Forecasts

ICICI Securities expects revenue to increase from Rs 8,095 crore in FY26 to Rs 9,278 crore in FY27E and Rs 10,451 crore in FY28E. EBITDA is forecast to rise from Rs 827 crore to Rs 988 crore and Rs 1,160 crore over the same period, while adjusted PAT is estimated at Rs 624 crore in FY27E and Rs 736 crore in FY28E, compared with Rs 502 crore in FY26.

Balance Sheet, Capital Allocation and Risks

The broker views Crompton’s net-cash balance sheet and disciplined capital allocation towards new segments favourably. Potential inorganic and international opportunities could provide additional avenues for growth.

Key risks include intensifying competition, an underwhelming recovery in demand and execution risk in the company’s new ventures.