Earnings Outlook
Crompton Q1 net profit seen down despite good sales growth
This story was originally published at 13:44 IST on 7 August 2025
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By Eshitva Prakash
MUMBAI – Crompton Greaves Consumer Electricals Ltd. is expected to post an on-year decline in its net profit for the June quarter despite significant top line growth, according to brokerages tracking the company. Residential and agricultural pump sales are expected to lead the top line growth amidst muted demand for fans owing to a weak summer.
The company is expected to post a net profit of INR 1.49 billion for the June quarter, down 5.6% on year and 12.7% on quarter, according to the average of estimates from 10 brokerages. The highest estimate for the company's net profit is INR 1.55 billion from Kotak Institutional Equities while the lowest estimate is INR 1.37 billion from Nirmal Bang Equities Pvt. Ltd.
Crompton is expected to post net sales of INR 21.43 billion, up 9.4% on year and up 14.1% sequentially. The company had posted net sales of INR 19.59 billion in the year-ago quarter. The highest estimate for net sales is INR 22.66 billion from JM Financial Institutional Securities Pvt. Ltd. while the lowest estimate of INR 20.35 billion is from Centrum Broking Ltd.
Crompton draws its revenue from sales of cooling fans and water pumps. The company has entered the rooftop solar appliance space recently. Along with this, the company has also announced a greenfield capital expenditure of INR 3.5 billion with the first phase focused on manufacturing fans.
Contribution from the electrical consumer durables segment to the company's revenue is expected to be lower in the June quarter compared to the year-ago period due to weak seasonal demand for fans this summer. However, this decline would be offset by an expected double-digit growth in the company's pump sales, aided by higher sales of solar pumps, according to brokerages. Consistent demand for pumps in the agricultural sector is expected to push up sales of the product in Apr-Jun. Analysts see mainstream sales potential for Crompton's solar pumps, with government subsidies expected to continue driving the agricultural demand.
Analysts attribute the positive outlook for Crompton's new solar rooftop product to the company leveraging its business-to-business and business-to-government sales. "Initially supported by attractive government subsidies with strong consumer payback, the business (solar rooftop) is designed to become self-sustaining in the long term," LKP Securities Ltd. said.
Economy fans were the best-selling category for the company in the trailing quarter, while its brushless direct current fans continued to see muted demand. Crompton's new launches haven't made a significant contribution to the company's top line. Overall demand for the company's products has remained moderate, in line with the previous summer, according to Prabhudas Lilladher Pvt. Ltd.
"Recently, Crompton has introduced new tech platforms and several new models. However, interactions revealed that the new models are yet to reach dealers, or they are unaware of the new launches, or demand remains similar for both old and new models," Prabhudas Lilladher said.
Kotak expects high single-digit growth from Butterfly Gandhimathi Appliances Ltd., a subsidiary of Crompton. Butterfly is expected to post 9% on-year revenue growth, according to Prabhudas Lilladher, and 14% sales growth as per Nuvama Wealth Management Ltd. The subsidiary's revenue growth is expected to be high owing to a weak base and continued growth in sales of its kitchen appliances. Butterfly contributed over 9% to Crompton's consolidated revenue in the trailing quarter.
Crompton's earnings before interest, tax, depreciation, and amortisation, or EBITDA, for the June quarter is expected at INR 2.28 billion, according to the average of nine brokerages' estimates. This would be 2.8% higher on year than the INR 2.22 billion EBITDA recorded in the year-ago quarter. JM Financial has the highest EBITDA estimate for the company at INR 2.42 billion while the lowest estimate is from Nirmal Bang at INR 2.08 billion.
The company will disclose its financials for the June quarter later in the day. Analysts are currently monitoring the demand for electrical consumer durable products and the growth in revenue from the solar space.
At 1317 IST, shares of Crompton Greaves traded at INR 318.20 on the National Stock Exchange, down marginally. These shares have fallen more than 9% since the company reported its March quarter earnings. All the 17 brokerage recommendations for the company available with Informist have a 'buy' rating on the stock with an average target price of INR 431 per share.
Following are the Apr-Jun earnings estimates for Crompton Greaves Consumer Electricals Ltd. based on reports from 10 brokerage firms, in descending order by the estimate of net profit:
Brokerage name | Net Sales (in INR mln) | Net Profit(in INR mln) | EBITDA(in INR mln) |
Kotak Institutional Equities | 21,454.00 | 1,552.00 | 2,318.00 |
Anand Rathi Share and Stock Brokers Ltd | 22,043.00 | 1,551.00 | |
JM Financial Institutional Securities Pvt Ltd | 22,661.00 | 1,545.00 | 2,418.00 |
Nuvama Wealth Management Ltd | 21,696.00 | 1,538.00 | 2,398.00 |
Elara Securities (India) Pvt Ltd | 22,023.00 | 1,527.00 | 2,231.00 |
Prabhudas Lilladher Pvt Ltd | 21,976.00 | 1,503.00 | 2,373.00 |
YES Securities (India) Ltd | 21,112.00 | 1,467.00 | 2,301.00 |
Dolat Capital Market Pvt Ltd | 20,645.00 | 1,443.00 | 2,244.00 |
Centrum Broking Ltd | 20,353.00 | 1,390.00 | 2,165.00 |
Nirmal Bang Equities Pvt Ltd | 20,368.00 | 1,368.00 | 2,084.00 |
Average | 21,433.10 | 1,488.40 | 2,281.33 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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