Yeah, good evening, ladies and gentlemen, and welcome to the Crompton Greaves Consumer Electricals Limited Q3 FY 2025 earnings call. Today we have with us, from the management of Crompton Greaves Consumer Electricals , Mr. Promeet Ghosh, Managing Director and Chief Executive Officer; Mr. Kaleeswaran Arunachalam, Chief Financial Officer; Ms. Swetha Sagar, Chief Business Officer, Butterfly Gandhimathi Appliances Limited; and Ms. Natasha Kedia, Head Investor Relations. Thank you for giving us this opportunity. And, sir, may I request you to give us some opening remarks post which we will open the floor for Q&A session, and for the Q&A session, may I please request participants who want to ask questions, use the hand raise feature, and when your name is announced, we will unmute and you can go ahead and ask your question. Thank you, sir. Over to you, sir.
Thanks. Thank you, everyone, and welcome virtually to the new Crompton office. Hopefully, we'll be able to welcome you here physically in the not-so-distant future. With that, you've already been introduced to Kalee, Swetha, and Natasha. As you already know them quite well, I will jump straight into my opening remarks on the performance this quarter. Before I get into the performance of this quarter, I also want to tell you that, you know, as you're aware, we embarked on Crompton 2.0 about 18 months ago.
While we have periodically communicated that there are various activities and actions that we are taking as a part of Crompton 2.0, what we are beginning to do from this quarter is to start to bring you in, give you a sneak peek, if you will, about what those activities are actually resulting in and what differences those are making to the business. You know, hopefully, those will be of interest to you as well. Some of this, actually, we are also going to do a public launch on, so you know, but I'll come to all of that in a short while. Firstly, you know, let's quickly talk about the performance and results. On the standalone performance, I'll remind you that you know, in the backdrop that we are currently operating in, consumer sentiment has been subdued.
And during this period, we have been very focused on sustainably and consistently enhancing both our revenue growth as well as our absolute profit trajectory. This is not. This should not be news to you. This is something that from time to time I have talked about, but this is clearly coming through this quarter as well. As demonstrated, we are taking a comprehensive approach to managing operations, remaining disciplined and mindful of strategic decisions as well as tactically exploiting market opportunities while being firmly committed to our long-term goals. This quarter, I'm happy to share that Crompton continues to deliver robust growth. Revenue growth remains steady, complemented by margin expansion and higher growth in profits. The company recorded a standalone revenue of INR 5,150 crore for the quarter, for the year ended December 2024, which is an increase of 12.5% year- on- year.
EBIT for the nine-month period surged 23%, and overall, for this period, there was a margin expansion of 9.9%. In Q3 alone, revenue grew by 6%, and EBIT grew by 15% YoY, with a margin of 9.7%, up 70 basis points. In this period, ECD margins improved by 160 basis points on the back of, you know, very, you know, quarter, like I said earlier, where there have been subdued demand, very disciplined pricing, keeping in view our long-term objectives, as well as very focused actions on pricing, on cost optimization. Insofar as lighting is concerned, there too, excluding EBIT, stepped up A&P spend, our margins expanded by 1.5%. And after factoring expanded the A&P spend, our margins remained flat. Now, let me get into each segment that we operate in. Fans, a business in which we are market leaders by some distance.
Despite the off-season, the business recorded a mid-single-digit growth led by TPW fans. Efforts to expand placements across 500-plus key retailers continued, and calibrated pricing actions were implemented in key premium models. To strengthen their position, new products focusing on aesthetics, style were introduced, such as Luxian Cai ro, and Festo. With the summer season approaching, the focus remains on accelerating premiumization and deepening channel partner engagement. In essence, our emphasis has been a lot on building the enablers for the business in what has been an off-season quarter. In pumps, we grew 19% YoY, which was driven again by successful execution and ramp-up in our solar pump business. We continue to innovate and also launch products such as SWJ Dura, Win Dura, with enhanced performance and durability to strengthen our portfolio. I might add that both, in both these launches, we have been met with good success.
In the appliances business, which, as you know, comprises two parts, the LDA and SDA, we have seen strong momentum both in small domestic appliances as well as in air coolers. While air coolers achieved, and this is an off-season for air coolers, we have achieved in air coolers the highest-ever pre-season growth, while demand for water heaters was impacted because some of the sales, because of regulatory reasons, as you are aware, were preponed in the previous quarter, which also, and to an extent also impacted by a delayed onset of winter. Mixer grinders soared 46% during this quarter YoY, fueled by robust demand and the successful introduction of higher-wattage mixers, grinders, and also Nutri blenders. Now, I have said this before.
I want to emphasize to you again that we find that combining Butterfly and Crompton by numbers, we are already, we believe, the largest mixer grinder company in the country. That is no mean feat. You know, it is credit to our kitchen appliances business, both in Butterfly as well as SDA, that we've managed to hit this mark, especially in our businesses where leadership makes a difference, right? Large kitchen appliances reported a revenue of about INR 14 crore. We—they have been in the journey of consistently reducing EBITDA losses, and that's been the trajectory here. That's a business that we continue to invest in. Overall, in ECD, we witnessed steady performance across key segments along with continued investments in premiumization, innovation, and GTM expansion.
Now, I will shortly talk and give you a little bit of a glimpse of what these are translating into, but more of that later. While external challenges affected some categories, strategic initiatives remain on track to drive long-term sustainable growth. Turning to our lighting business, we remain focused on revising its growth trajectory. I think you are consistently seeing improving trend, a very discernible improving trend, in our lighting business. This quarter, our growth accelerated to 3% YoY, up from about 1% YoY Q3 FY 2024. All right? Growth, this we believe, is industry-leading growth, especially in the context of the price erosion that this business continues to see.
You know, particularly, the growth numbers—we don't disclose exactly the growth numbers—if you carve out the fact that these numbers are on the back of CFL numbers, which are in the base, the growth would be materially higher. And that also gives us comfort that we are doing very well in this industry, not only on growth but also on profitability. B2C growth was primarily driven by battens, outdoor, and accessories. Additionally, the expansion of our product range contributed to a higher share of revenue from new launches. I've said before, because of our focus on panels, panels is now the single largest segment in our B2C portfolio, which is an important change given both the speed at which that business is growing and the margins that business has. In B2B, we saw strong growth in LED industrial and commercial categories.
We've historically been strong in street lighting. What you're now seeing is industrial and commercial revenue streams also ramp up and start to contribute to the B2B growth. Notably, we have secured a large number of orders despite a slowdown in tendering and partially that's been impacted, as you are aware, with the election cycles in various parts of the country. It's worth mentioning, as I've already said now, that despite materially stepped-up expenses, lighting profitability remains intact. Now, I told you earlier that I'd give you a sneak peek into the Crompton 2.0 outcomes. From time to time, we will do this, and, you know, give you a glimpse. In particular, I want to alert you. We could not talk about it before, but there is going to be a public launch very soon of strides that we've made in innovation in fans.
You will appreciate that I can't tell you much more just now, but you know, just wait about a week or a week and a half, and we'll give you the full details, but you know, we've been talking time and again about the investments that we've been making in innovation, and time has come for us to reveal that we have now developed both fully indigenously the next generation or a platform for BLDC, as well as the next- generation platform for induction fans. Now, it is our expectation that for the next several years, these platforms will drive you know, several product launches, not only over the next several years, but you will probably see a spate of product launches to bolster our position in the very near future as well, just ahead of the coming season, so you know, I'll leave it at that.
You know, some of the things that have also already happened, those I can tell you, and, and we should give you a sense of what's coming. We have already launched India's first high-speed five-star induction fan, which is the HS Duro, which uses some of the technologies that we've been developing for a while. And now you'll see the next, the next level of it. We've also launched, insofar as energy efficiency is concerned, the number one energy-efficient appliance, water heater appliance, previously, Arno Neo being awarded by the best in the winter. And also, keeping in view the increasing demand, consumer demand, for products which have both the facility of having a remote in hand, which is mobile, but also having a regulator because you can lose the remote. And it's, it's not as easy as it might seem, technically.
We have launched RegMote previously for our Energion Groove. Now that's something again that we will continue to build on. You know, just to give you, just to remind you, that, you know, this is, you've already seen the cost of this being incurred. So, you know, from 2021, when our R&D spend used to be about 0.5% of revenue, they've stepped up to 1.5% last year. You will continue to see a similar trajectory in FY 2025. Obviously, these we disclose only on an annual basis, but just to give you a sense of the amount of effort that's going into this. Right? We've also, by the way, increased since 2021 the size of our team by 3x. Right? Now, the other sneak peek I've shared from time to time that we have focused on embedding digitization in our operations.
Our digital portal for dealers is now running for some months. I'm delighted to say that that has substantively changed, significantly changed, the kind of efficiency with which we are able to settle schemes with our dealers. Also, of course, to keep them informed, also to, to, you know, digitally monitor our schemes, all of which now have been put into a digital one single digital platform. So, you know, there's, there's, we are already beginning to see quite a different, you know, quite an improvement in the channel partner experience. Needless to say, this is early days, and you'll further see improvements on this. But I'm quite happy to tell you about some of the changes that have already happened. Another area of embedding digitization is actually after-sales service.
We have about a few weeks ago, we've now started a process of real-time monitoring of consumer service, their satisfaction levels, addressing their concerns. You know, within a few weeks, the number of calls that we've addressed is already up to about 50,000-55,000 calls that we've addressed. We are rapidly increasing this. You will be reminded that this is, you know, Crompton has been in this business not only as a leader, but has been a leader for very many years. We've been in this business for 85 years. This is one of the connects that we have with our consumers, which is a massive benefit in terms of an established base, so you know, we expect that we will continue to ramp this up. I'll remind you that we address something like 35 lakh customer calls every year.
You know, as we go forward and digitize that experience, that also enables us. That's only one year, right? As we go forward, that will enable us to leverage that massive scale matter, right? Okay, very few quick words on the budget. You know, the, you know. So, all in all I was asked to make a few points about what we thought of the budget, not really for me to say, but very quick points. You know, clearly strong long-term approach that the government continues to demonstrate. There's CapEx orientation as well as pragmatism and flexibility, and you know, we do believe that many of the measures that the government, particularly the tax measures the government has taken, will help in lifting the consumer sentiment, which, as we've said earlier, we've seen that being a little bit subdued. So very timely.
We do hope and believe that this will add substantively to the disposable incomes of people and therefore boost spends, particularly in the durables goods segment, which tends to be a discretionary segment very often. Therefore, it is materially helped by increased disposable incomes. Lastly, I want to, you know, just flag a few things. As you know, and you will have seen earlier, when we are coming up with the next generation of energy-efficient fans, we are working very closely on driving responsible behavior on the part of the company on significantly stepping up our ESG efforts. We are now ranked. I'm delighted to say, we are now ranked number four globally amongst consumer electricals companies, number four globally by DJSI on ESG parameters. Our ESG score has improved materially. It's now at 62.
Come up from about?
34.
34 last year and, before that?
Nine. Yeah.
So in two years, our ESG score, guys, what happened? Okay. On ESG score in two years alone, on DJSI, our score has gone from nine to 62. We've also been recognized by S&P and their yearbook. ESG Yearbook has just come out, and we are ranked, I believe, third in our category by S&P Global. Right. Moving on to Butterfly performance and Swetha here with me. You know, as you know, Swetha has been hard at work. And we are seeing some green shoots there, in line with what we've been guiding the market at. There's, you know, again, the efforts that we've been making and getting at setting the, you know, resetting the terms of trade, the pricing, the channel norms, et cetera, et cetera. You know, the efforts are visible.
The green shoots are there. So, the revenue decline in the Butterfly has now been more or less arrested this quarter, and there has been a significant improvement in EBIT, EBITDA margin by about 600 points, and this is a result of many of the things that we've talked about. So, you know, EBITDA margin is down at about 7.2%, and there's also. This has been driven both by gross margin expansion and calibrated actions on pricing and product mix. With that, I will pause and, you know, we'll take questions.
Thank you so much, sir. Participants who wish to ask questions, please use the hand raise feature. And when your name is announced, you know, we will ask to unmute and you can unmute and go ahead and ask your questions. The first question is from Aniruddha Joshi. Aniruddha.
Yeah. Thanks for the opportunity.
Sorry.
Yeah.
Yeah. Thanks.
Thanks for the opportunity. Aniruddha Joshi from ICICI Securities here. Sir, on Butterfly, we have seen super recovery in the business. So what are the two, three things that are working, because we have seen other kitchen appliances companies reporting quite muted set of numbers in South India. So what has really worked for us? And should we expect that, going ahead, this should be, in a way, the recovery should continue in coming quarters also. That is question number one now. Secondly, you indicated TPW fans are doing well. So what will be the contribution as of now and how it has changed over, let's say, past two, three years and how we should see it changing over next two, three years also.
Last question from my side, we have seen the MFI channel had seen massive weakness and it is also highlighted by some of the players. So what is the current contribution of Crompton from that channel and how do we see any impact on that for the company? Yeah. Thanks.
Aniruddha, you know, guys, if you guys don't mind, I'll request people to keep their questions to one, maximum two, and you know, just so that we give everybody a chance. Very quickly, MFI. I'll start with the last one first because that's the easiest. The MFI channel indeed has been very, and you know, it is quite small currently because it's fallen quite a bit.
It's only recently, I'd say, that we are seeing some initial signs that MFI demand might be a recovery, but it's quite, it's quite small and has fallen quite a bit from the numbers earlier, and you are all aware of why that happened. It's also, you know, rural itself, the demand has not been very strong, but this in particular has been quite weak. Insofar as, I don't know if we disclose TPW shares.
We don't disclose.
Yeah. So Aniruddha, what I can tell you is, you know, TPW, as you have rightly noted, TPW demand has been robust. It has been robust for us over the last at least four quarters, and has been faster than ceiling fans, is, is my take. It is my expectation that this segment will continue to grow very well.
Now, remember one thing, and I keep getting thrown this number that ceiling fans, there is very high penetration. So ceiling fans, there is high penetration. But the demand for ceiling fans, I hope after some of this recent weakness goes away, is going to get driven by a few things. One, the replacement cycle for ceiling fans is getting shorter, right? Insofar as TPW is concerned, the penetration is very low, right? Very low. And as you know, we get warmer summers and warmer winters even, and sometimes delayed winters, this is a business that we expect, you know, strong growth in. So that's what I'd say. Insofar as Butterfly is concerned, absolutely, our expectation is that the trajectory in Butterfly will continue. You know, I can't say we are there yet.
And, you know, maybe Swetha, you want to quickly talk through a few of the things that have happened, which distinguish you from how the rest of the business is concerned. But you know, the, I didn't want to say this. Look, what we said before about butterfly is that we want to go back and reset and strengthen the fundamentals, right? And that's the trajectory that we've been on. Some of that, some of the benefits of this, you will see, last quarter. And, you know, I'm quite sure that these continue to come. But yeah.
Just the top three things, like what Promeet just said, just summarizing it. I think the first thing, I think it's, channel parity, looking at channel parity is one of the key things that helped us to stay where we are. The second thing is focusing on core.
When we say core, both from a category and a market point of view, I think we had strong focus in terms of getting our core right. And the third one is optimized resourcing. I think wherever it was required, we resourced the system and we resourced the system from a consumer point of view. So those are fundamentally the three things that we continue to work on. And I think the results are getting to show right now.
But still very much work in progress. I, you know, I want to say. Okay. All right. Next.
Thank you. We have next question from Manoj Gori. Manoj, please unmute and ask your question.
Yeah. Thanks. Good evening, everyone. Manoj Gori here from Equirus Securities. Sir, two questions.
One, if I look at recently, one of the peers has indicated that B2B lighting is likely or probably going through some price erosion. How do you see this and what's your understanding on this? And second, you highlighted about strong inventory buildup for air coolers for upcoming summer. How are we seeing channel inventory for fans in the initial months? And what's your industry outlook for CY 2025 growth for fans versus CY 2024 volumes? And this is for the industry.
Yeah. What's the last quarter?
B2B lighting.
B2B lighting. Yeah. B2B lighting, yes, the outlook has been, you know, tepid, and the order flow has been reflecting that. From our perspective, what we have been doing is that we have been expanding the areas that we've been playing in, in B2B to help us get past this. As you know, we have strong positions in certain segments, particularly street lighting.
This is the reason I told you earlier that we've expanded our position, also in commercial as well as industrial. So the, yeah. So it's been a competitive segment in the last few months. I have to say that we are optimistic that there is going to be improvement in this segment as we go forward. Some of the initial signs of that are there.
So my question was more on the price erosion side. Are we seeing any price erosion into B2B lighting?
I think, Manoj, B2B lighting is a tender-dependent business. So it is about, for participating in the tender, how do you get yourself equipped enough? And from our perspective, we have a unit economics that we have been stating in the past.
While the price is led by what is the base price that the competition wants to quote, whether they want to take a margin erosion or not is very different. It will be difficult for us to comment on what are the strategies that others have been following. From our perspective, we have a base margin with which we want to operate. And if that is going to give us scale and operating leverage, we can look at bringing that down. So that's how we are looking at B2B lighting in terms of pricing. Because as you know, that's a tender-driven business. Now, in terms of B2C, that's a price erosion that has been continuing. But as you could see, our performance continues to be very strong. Probably the industry leading growth for second consecutive quarter is what we are seeing in B2C lighting.
Right.
Yeah. Quickly, I'm just moving on. Guys, so we don't keep going back and forth. Just so we're clear, guys, B2B businesses, you should, there are no standard products. It's tough to talk about pricing. There's margins, but pricing is a relative concept. And we've told you how we're dealing with our margins. Insofar as air coolers are concerned, you know, I think there's, like we already said, clearly, people are beginning to see Crompton as being an important player in the air coolers segment. And that is, I think, the reason that it's translating into strong demand for us. So, you know, particularly in a product where, you know, up until quite recently, we didn't have any position at all.
It's quite, and you remember that last year, you know, when there was quite a warm summer, we disclosed that we were not able to, in fact, supply to, you know, to all the demand that got generated. That's one of the reasons that I think the channel is also open to buying from us earlier. We are also getting ready earlier in the cycle. Insofar as, you know, fans business is concerned, yes, you know, we are optimistic that with a bunch of, you know, with the budget, with, you know, even last year, as you remember, the first quarter was quite warm. So it depends a little bit on how warm the coming months are. But we do believe that, you know, there'll be reasonable strength in the fans market going forward.
Sure, sir. Thank you, sir. I wish you all the best.
Thanks.
Thank you.
Thank you, Manoj. The next question is from Aditya Bhartia. Aditya, please go ahead and unmute and ask your question.
Hi, good evening, sir. So my first question is on the pumps business, wherein we continue to see fairly strong growth. Just want to understand how much of that is driven by agri pumps and what proportion of pumps revenues would be coming from agri pumps now?
So, Aditya, we don't disclose a segment-wise business of our agri and other segments. But I just want to give you a broad print in terms of how our pumps plus solar is behaving. Our pumps portfolio, non-solar, is growing at the industry pace. And probably in residential, we believe we are marginally gaining share also. Solar, I think as we speak, we have already executed INR 200 crore of business, cumulative from last year to now.
We started late last year and up to now INR 200 crore has been executed. We see the prospects to be very positive on this as we look at the future also. As we cross each quarter, we'll keep updating as to how is that moving and how is the pipeline coming through. But that seems to be pretty exciting in terms of where it is.
Sure, sir. And in terms of pricing that we see in solar agri pumps, the pricing is not a concern. We get to have decent margins in that segment?
Yeah. Neither the pricing nor the margin is a concern in this business.
Sure. And this particular quarter, we saw other income reducing a little on versus let's say last quarter, so what would be the reason for that?
So you may have to see this along with finance cost.
As you look at last year, we had a debt in the books for the Butterfly acquisition that happened. As of now, the debt has been pared down. So we have only INR 300 crore of debt left. So cash has been used to pay off the debt. And that's where you see the reduction in finance cost and reduction in other income also.
Perfect. That's it, sir. Thank you so much.
Thank you, Aditya. We have the next question from Naushad. Naushad, please go ahead, unmute and ask your question.
Yeah. I hope I'm audible. First, on the lighting and Butterfly business, if I look at these two pieces of businesses, lighting, we have been working on the R&D, shifting the portfolio, exiting a few conventional products. And the same was the case in Butterfly. We were correcting fundamentals from the last two years.
For both the businesses, do you think the fundamental corrections or portfolio corrections, which were required, are over now and from here onwards, should we expect growth from these two businesses? And if yes, what kind of growth one should expect, from both the businesses?
Now, we don't give future outlook of growth. As you know, we don't make forward-looking statements. But having said that, if we start with lighting, I think the promise that we made on lighting is first we will address decline and we will grow. As we speak, we do believe we are probably growing at an industry- leading rate in B2C. So already whatever fundamental correction that we need to take in lighting business has been completed and business is moving in line with the category performance or ahead of the category performance. This is also keeping in mind the margin has been improving.
So it is not that you're leading or growing at the industry pace. You have kept the margin profile also intact, if not improving, apart from investing on the brand towards the marketing spends that we have talked about earlier. Now, as far as Butterfly is concerned, what we said is there would be decline in H1 and we would address the decline in Q3 and start growing from Q4. So it is still work in progress, but the trajectory is moving in line with what we said. We've already demonstrated this in lighting. We expect the same to come through in Butterfly also.
Actually, maybe I'll tell them something that we, you know, we hinted at publicly earlier. You know, some benefits that you are seeing come through and will continue to come through in the future are not only at the front end, but also in the back end.
Now, over the last two quarters, we have consolidated manufacturing operations both at Crompton as well as at Butterfly. So, four manufacturing plants have been consolidated into larger ones with not only improved cost metrics, but also enhanced production capacity. So, for instance, you may have gauged this, what's going on behind the scenes, when we announced that we had increased our production capacity at Baddi by about 50%, and also increased our backward integration there. And that's all of this, you know, we have manufacturing facilities for lighting, for fans, etc. Some of them are being consolidated. So, and in some, what used to be produced earlier is now a different product is being produced depending on what we can cost-effectively produce. So, I mean, needless to say, there is stuff that's happening in the front end as well as in the back end.
Interesting, sir.
So, for this initiative, do you think?
Allow us to pass this through the other questions because people are on queue. If you could come back.
Sure. I'll come back in the queue. Thanks.
Thank you, Naushad. We have the next question from Umang Mehta. Umang, please go ahead and ask your question.
Hi. Thanks for the opportunity. Just on fans, last quarter, you had highlighted that you know some competitors were holding back on pricing. Just wanted to know if there's any update on how the competitive situation is in fans.
Yeah. And maybe talk about [market shares], right? And then you can gauge. Look, we are in the business of being disciplined in the markets, right? And you can see that come through you know consistently. It's. We do believe that that is the trick to gaining market share and doing well on profitability, right?
Yes, it's true that some of our competitors haven't been as disciplined as we have been. And I think you can also see that that is showing in their margins, right? Now, particularly in, you know, in a non-seasonal quarter, I can understand that there has been some pressure somewhere to be able to shore up volumes. We are not in that game. We much rather be consistent, instead focusing on strengthening our business. We've actually, by the way, I mentioned this recent, you know, in my opening remarks, continue to invest heavily in enabling our front end, right? In terms of POS displays, you will see this come through, the investments that we've made in innovation. You will see what that's doing to the, you know, fairly material launches ahead of the next quarter, you know, working through the next generation of technology platforms.
So, yeah, I never want like to talk poorly of our competitors, but I can tell you this is what we are doing. Invest in the business, right? Be very focused on ensuring that you continue to drive cost optimization, do what you're doing better, right? And that is what is going to hold us instead, going forward, right?
Sure, sir. Sorry, I was not able to unmute. Thanks. That was reassuring. Just the second question, if you could share the current order book on solar pumps, if at all you are willing to share.
Umang, we don't disclose the order books. As the quarters pass by, we will let you know as to how are we progressing on solar. As we said, we see that as probably a potentially materially larger business, and we are moving for us. And the book building has also been progressing.
It's, you know, we expect to continue to expect robust growth in the business. I think as far as we can go.
Got it. Thank you so much, sir, and all the best.
Thank you.
Thank you, Umang. The next question is from Bhoomika. Bhoomika, please go ahead and ask your question.
Yeah, good evening, sir. Sir, just wanted to understand on Butterfly, you know, Swetha spoke about channel parity and we've arrested the decline now. Going ahead, how are you seeing the growth panning out in terms of demand, market share growth? And with the kind of optimization of resources, which you said there was consolidation in the manufacturing, do we see double-digit margins coming back into Butterfly into the next year, or it's going to take much longer than that? What's the outlook out there?
Again, Bhoomika, I think, we wouldn't be giving a forward-looking statement here, but I just want to give you a few indicators of how are we thinking, and Swetha can add it. See, fundamentally, at scale, kitchen has been a double-digit margin business for every player. And when I say scale, I'm not talking about something very large. From where we are, potentially, if we have to grow at a reasonably good rate ahead of the industry, double-digit margins do come in. But, our approach to Butterfly is a calibrated step-by-step one. We said this earlier. We said we'll first get the decline to be arrested, which has been completed in Q3, get the business back to growth, get into decent single-digit margins, arrest the negative profitability that we had last year. So all this work has been completed.
As we approach into next year, we think the business is poised to take a double-digit revenue growth. At scale, operating leverage will play out because it's a high operating leverage business. Anything that?
I just want to remind you of something that I told you earlier. We are now playing on not just the scale of Butterfly, but Crompton plus Butterfly. So, I've said before that, for instance, Crompton is now outsourcing some of its mixer, you know, purchases to Butterfly again. This is so there's a broader scale statement that's happening here. And the fact that we are now the largest mixer grinder company in the country, you know, making a difference.
Sure, sir.
So the other aspect is on, you know, demand for fans, you know, that we're getting into the summer season shortly, how you're seeing the stocking going on with dealers, you know, and how, and you also spoke about TPW where we're looking at a strong growth. If you can just talk about how large is the market, what is our market share out there, that would be really helpful. Thanks.
Specific market share numbers, but I can tell you the category is roughly about 25%, will be TPW. And maybe if you include, domestic and others, it would be slightly more than that. Fans, if you look at it, we would divide this into three parts. We see premium fans growing at double digit. We are also seeing BLDC growing at a very fast clip upwards of 20%. And we do see, TPW also growing in double digit.
The entry-level fans, I think the regulatory requirements coming in probably gives us an advantage considering the scale at which we operate to grow that profitably also and gain further market share from where we are depending upon how the regulatory changes pan out, one year down the line. So overall, from an industry perspective, we think fans category is moving in the right direction for us as a business. Internally to Crompton, I think we talked about the platform change that Promeet was hinting at earlier. There are a lot of exciting products that are going to come in. Watch out for it. Maybe in a couple of weeks, we'll talk in detail where we will have a media release on how are we going to leverage platforms and how do we see BLDC and induction as a dual-engine platform to drive growth in fans.
Thank you, Bhoomika.
We have the next question from Natasha. Natasha Jain . Please unmute and ask your question.
Yeah, thank you for the opportunity and congratulations on the good set of numbers. So my first question is on TPW. I apologize if the question sounds very basic, but I just want to understand. You mentioned that TPW has very low penetration. While that's agreed upon, I want to understand the rationale if somebody has a ceiling fan already in their house, why would they want to shift to a TPW? What, what extra addition does it give? That's my first question.
You tell me, you know, why do you see a proliferation of TPWs, not only in India but globally? A TPW tends to be a personal fan. A ceiling fan is for a room. A TPW typically is for one person.
As temperatures rise, not only people who have a ceiling fan, people who have an AC, and people who have an air cooler want to enhance the cooling experience by having a TPW, right? If you go to offices now, actually in the rest of the world, you will actually see, right, every person having a personal fan next to him on his desk, right? I, this is something that I assume you are aware of. Even when you have an AC, combining an AC with a fan significantly enhances the cooling experience, right? You know this, right? We are seeing, you know, TPWs get taken up in offices and homes and factories and shops everywhere.
Fundamentally, if you look at it to what Promeet said, you also have portability that comes in TPW. I can move between rooms. That's much easier.
Also, TPW gives you a direct flow, the personal cooling aspect that Promeet was talking about. If I need a targeted direct flow, it helps me to ensure that, that is something that I can have in addition to a ceiling fan that I have in the same location, and this, considering.
Not only ceiling fan, also AC.
Yes, so with the kind of global warming we see, India and outside, we expect this trend to only accelerate.
I'm just. Sir, and my second and last question is you mentioned that, you're coming up with a next- generation BLDC category and induction fans. Just want to understand, is there any difference between this and the one that's already in the market, and is there any patent that we have or are the margins better than the already BLDC fans in the market? Thank you and all the best.
Yeah, I mean, as you might imagine, there are several interesting points that, you know, we will disclose shortly about improvements, not only of our two, you know, fans that we currently own, but also a trajectory of fans that, you know, we will then unveil over a period of time. These are changes, improvements in technology, all of which have been indigenously in-house developed. Needless to say, we have privileged, you know, technology there. And I want to emphasize this, that, you know, we are arguably, and we haven't heard anything to the contrary, the largest ceiling fan company in the world. Bulk of our production, of course, is induction motors.
We'll continue to not only draw on the strengths that induction motors have, namely durability, namely a domestic, you know, supply chain, namely years and years of proven experience, but also be able to produce progressively energy-efficient fans. You know, I'll leave it here. You know, yes, a lot of the technology that we've been doing is privileged.
Thank you, sir. Thank you, Natasha. Sir, that was the last question. Thank you so much for hosting this call and giving us this opportunity to host this. Sir, any closing remarks that you would like to make?
Not really. I think we've spoken at some length about, you know, what not only, you know, how we are doing, but, you know, I do want to start this process of, and this is the first time that we are doing it. It's also there in the presentation that we've uploaded.
Going forward, you know, we do want to give people a sneak peek about outcomes that are coming out of Crompton 2.0, which pertain not only to revenues and profits, but also to the various enablers which go on to, you know, generating not only revenues and profits today, but in the future. Needless to say, as you have any further questions, you know, please feel free to reach out to Natasha, Kalees, and Swetha or I. Thank you very much for joining. Like I said, hopefully we will do this the next time in our new offices. As you're probably aware, we've moved into a new office, which looks a little bit different from what we used to have earlier. When we say we want to be a place that our people enjoy working in, I hope you get a sense of it.
Thank you.
Thank you so much. Looking forward to seeing your new office. Thank you. Thank you, Crompton team. Thank you, participants.
Thank you for.