Notes from AR 2021-22 iro Crompton Greaves -
- Offer products in both mass and premium segments. Covid has been a tail wind for smart electrical products as consumers have been staying at home. Company investing heavily in R&D to respond to new market trends and develop smart products that meet customer expectations.
Company’s manufacturing locations are located at - Goa, Vadodra, Ahmednagar and Baddi.
- Despite drop in Covid induced drop in demand in Q1,Q2 and RM inflation in Q4, company reported resilient financial performance for the full FY. Total sales at 4825 cr vs 4570 cr. PAT at 604 vs 494 cr !!! ( this in a covid disrupted year is commendable ). All this was driven by strong performance in Elect Consumer durable division which includes - fans, pumps and appliances. Most of the growth was driven by product premiumisation. In lighting, B2C did better than B2B. Ongoing cost saving measures helped us save 153 cr in operating costs !!!
- Company has a 5 dimensional plan to shape the future of the company-
(a) Brand excellence
(b) Portfolio excellence - by investing heavily in R&D and technology. Same is getting reflected in increased off take of premium products.
(c) Go to Market excellence - using tech, building alternate channels like modern retail, e commerce and strengthening rural distribution.
(d) Operational excellence - by continuing to invest in growth initiatives and digital enablement.
(e) Organisational excellence - continuous up skilling of employees.
- New innovations this year included bacteria killing LED bulbs, anti dust and silent fans. Both were instant hits in the marketplace. Company maintained its leadership in Fans category, led by premium fans and increased availability. In pumps category, launched mini residential pumps, solar pumps, new variants of submersible pumps. Launched water heaters, JMGs with 5 star ratings. Energy efficiency has been our key USP.
- Launched dealer portals through which dealers can directly engage with the company and can also monitor stocks and orders. This facility is being used by over 400 channel partners now. Soon, this will be available as a mobile app as well. New initiative- ’ Son of the soil’ launched to target population centres with 10k-100k populations. This initiative has taken off really well.
- Last 5 yr operating performance -
Sales - 4017, 4105,4497,4512,4750 cr
EBITDA - 502,562,634,656,780 cr
EBITDA margins - 12.5, 13.7,14.1,14.5,16.5
PAT - 283,324,403,495,605 cr
- Demand for fans is likely to be secular as India expands electrification in rural areas. Needless to say, rapid urbanisation should be here to stay. Company also intends to export to SAARC countries along with channel expansion and rural programs.
- Similarly, thrust on water and irrigation infrastructure will stimulate further growth in electric pumps segment. Pumps are also extensively used in water treatment plants which in turn has secular tail winds. Jal Jeevan mission is another tail wind for pumps market.
- Appliance industry should also see acceleration due urbanisation, nuclear families, surging rural consumption.
- Govt has announced an incentive of 4-6 pc for a period of 5 yrs to companies engaged in manufacturing of LED lights subject to min threshold investments. This will further boost domestic manufacturing , create economies of scale, enhance exports and create a robust component eco system.
- Future plans - Consumer Appliances should be an area of robust future growth. Intends to expand the core ( heater and coolers ) into smaller appliances. Home appliance business has doubled in last 3 yrs and company intends to develop full range of kitchen appliances.
Disc : invested, biased