Hello, everyone. On behalf of Avendus Spark, welcome to Crompton Greaves Consumer Electricals's Q4 FY 2026 earnings call. From the management today we have with us Mr. Promeet Ghosh, Managing Director and CEO; Mr. Kaleeswaran Arunachalam, Chief Financial Officer; Ms. Swetha Sagar , Chief Business Officer, Butterfly Gandhimathi; Mr. Rajat Chopra, Business Head, Home Electricals; Mr. Shaleen Nayak, Business Head, Lighting, Solar Rooftop, and Wires-
Yes
Mr. Ruchir Jain, Head Investor Relations, Corporate Strategy, and FP&A.
That's the.
Thank you so much, and I request the management to give the opening remarks.
Press release.
Press release.
Okay. Should we start?
Yeah.
Ladies and gentlemen, great to have you back with us, you know, for discussing not only the quarterly results but also what we've achieved in this past year. It's actually quite an exciting time for us. Lots and lots of things happening, so some of which are being announced today. I'm sure we'll have a lively conference call today. Very quickly, let me introduce some, you know, familiar faces and some not so familiar faces. Swetha, I'm sure you know. Ruchir looks after FP&A at Crompton. Kaleesh, [Foreign language] the CFO who, you know again. Rajat and Shaleen, business unit leaders and senior leaders at Crompton.
Rishabh Jain, who's looking after investor relationships for us, and also a new hire, right? I'll kick that off and, you know, very quickly, I assume that you guys have seen the press release. You've, I, and also seen the investor presentation that we've put out. Let me very quickly take you through the highlights of this quarter, and then we'll jump straight into question- and- answers, right? As you all know, FY 2026, otherwise a year which has been very demanding, shaped by muted demand coming out of seasonal, frankly, unseasonal weather patterns. Towards the end, not to, you know, we left out some geopolitical action as well.
You know, from an external point of view, there were various headwinds that businesses faced. However, I'm very you know, delighted to say that our execution remained very steadfast throughout this year. As we progressed through the year, quarter- after- quarter after quarter, we improved our performance, pulling back from some of the effects that we were being forced to, you know, deal with. As you can see, this the results of this quarter are very indicative of how we've managed to deal with the challenges that have been thrown our way. A very robust second half. We you know, the second half, little bit, the festive season, some small parts of our business benefited from GST 2.0.
Most importantly for us, this quarter was the first quarter where in our fans business, this is the first quarter after the BEE 2.0 regulatory transition, which went off quite well for us. While in Q3 both ECD and lighting gained significant momentum, I am, you know, I am glad to report that that momentum was more than maintained in Q4. For the first time, for instance, in I think six years.
Yeah
Outside of COVID impacted quarters, which tended to be, have widely varying growth rates. In the last six years, the kind of growth that we've reported in lighting, this is the best, right? This is a quarter where we've been very focused on margin discipline. Our EBIT margins improved from 6.8% in H1 to exit at about 10% in Q4. This was driven by operating leverage, premiumization, and actually very concerted pricing actions. We can talk about that in greater detail if you like. Of course, supplemented by sustained cost optimization. You will also notice that the process that we started a couple of years ago of Really cleaning our table.
That process has been taken one step forward. Even as we have significantly improved the performance of our Butterfly business, it is back now to growing and strong double digits, not only on revenue, but also on profits. We also thought it was a good time to look at the carrying cost of Butterfly and, as you would notice, we've taken an impairment on our Butterfly holding value. This really aligns with the business value of the company and it also obviously it doesn't have any impact on the cash flows of the company or any other factor, any other part of the business.
You know, now that we have, we have spent a whole lot of effort in, under the management of Swetha, you know, getting our arms around the business. This is a year where we've now also completed a whole lot of strategic actions. At the end of the year, we've also decided to take an impairment on the Butterfly value. This is Okay. This, of course, does have an impact on ROCE and asset turnover, which I'm sure you are well aware of. Turning to the quarterly performance, Q4. The sharp recovery across segments, consolidated revenue grew by 11% Y-o-Y to INR 283 crores, led by a 10% growth in ECD and, like I said, industry-leading growth in lighting, 14%, right?
Crompton, like I said, not growth that we've seen for a very, very long time, outside of this, you know, disruptions. ECD saw a broad-based growth driven by pumps, as well as by small domestic appliances and fans. Fans had robust traction, with record volumes in 2026 March, supported by our forays, you know, emphasis on BLDC. You know, for, to give you an example, our BLDC portfolio, which has been bolstered by product introductions earlier in the year, is now growing at 30-plus %. And a spate of new BLDC products was in fact introduced during this quarter, the benefit of which, you know, we are already beginning to see in this quarter.
Within SDA, this was a story of not only mixer grinders, but a range of new product introductions. Earlier in the year we introduced infrared cooktops, which of course benefited in the last quarter. We also introduced air fryers, we also introduced a range of high-end juicers, et cetera, all of which have helped this business grow at even stronger numbers than it has been growing in the past. More importantly, along with the strong growth numbers, which from time to time, we have been talking about, this business is also now benefiting from scale, right? This is something that we had flagged. This is material business.
Kitchen overall is a area that, I think we've been talking about, as being a key area of focus for Crompton. Firstly, we spent a lot of time and effort in turning around the Butterfly business, bringing it to an even keel, and now it's been taking off in the last several quarters. Similarly in the SDA business, I have no hesitation in saying that this business is probably the fastest growing kitchen appliance business in the country of a comparable size. I mean, you know, there may be smaller companies, but this business is arguably the fastest. It picked up further pace in the last quarter, but it combined that growth with profitability improvements.
There was a significant jump in the profitability of our, frankly, a step jump, if you will, in the profitability that we saw in our small domestic appliance business, right. In LDA, which is the large domestic appliance business, which is the water heater and air cooler business, we saw double-digit growth in water heaters and market share growth and gains both in water heaters as well as in air coolers. If I'm not mistaken, last quarter now we are finally in GT. We've been among the top two, top three players in India in water heaters in GT for the longest time. Now we are the number two player, is our understanding.
As with various other parts of the business, we are gaining market share. Importantly, as we had flagged earlier, we entered two very big TAM businesses last quarter. One of them was wires, the other was solar rooftops, right. This was after having frankly gestated these businesses internally for several quarters. These products are now actually available in the market. Shortly after we announced, we have started selling these products. There are a number of houses where we have already installed rooftop solar. About 1,000, Shaleen?
If you count Telangana, it'll be more than 5,000 there.
INR 5,000. Okay. All right.
Andhra has already crossed INR 2,500.
Okay. All right. There you have it. That's changing by the day because a large number of them are coming up on a daily basis. About 5,000 homes now already have rooftops which coming out of the Crompton stable, right? That's after we really, you know, stepped up execution of this product in the last two, three months, right?
Right.
Okay. Lighting, talked about. The performance is actually Lighting comprises two segments, B2B and B2C. The performance is actually equally strong in both the segments. You know, we can answer questions if you will, would like, but industry leading growth of 14%. Butterfly business delivered a 17% revenue growth, right? Together with steady EBIT margins. In fact, I think together with not only steady EBIT margins, but also putting incremental dollars back into advertising, which is the way that we wanted to build the business. There's that's how the Butterfly business is doing. Consolidated EBITDA Q4, INR 271 crores, with margins of 11.9%. Wires, you're already I'm sure you've seen the ads.
Crompton Armor is the brand that we are going with in wires. It's now available in South India, and soon to be available in other parts of the country, right? By the way, Butterfly, apart from the fact that growth is robust, profitability is robust, cash flows are also robust. As you will see, Butterfly and Crompton are now both strongly cashflow net cash positive. Crompton, of course, always has been net cash positive for a long time, now even Butterfly, with what? INR 170 crores of cash is cash flow positive as well, right? Yeah, that's a summary and the board has decided to announce an identical dividend as last year.
Right. Kaleesh is reminding me that there's another announcement that's just happened. We are very delighted to announce that a new product line has been created in Crompton called Crompton Reon. This PL is tasked with introducing super premium products under the Crompton's, from the Crompton stable. Most of these are cutting-edge technology and the next generation of design. As you will be aware, we've been investing heavily into innovation and design over some years. This is the result of the investment that we've been making in innovation and design over the last three or four years. You will, I hope, begin to see this new range of products soon in the market.
What we are also doing is that we have a large kitchen appliance business. That large kitchen appliance business is being folded into Reon and Swetha is taking on the additional responsibility of leading the Reon PL as well. Okay, guys. I probably have missed a few things which I'll be reminded about later by the gentleman. For now, I leave the floor open to being asked questions.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question, please use the Raise Hand feature on Zoom. When it is your turn, you'll be unmuted and announced. Kindly restrict your questions to two at a time, and please join back the queue for follow-up questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from Aditya Bhartia from Investec. Please go ahead. Aditya, please unmute.
Yes, Aditya.
Hello. Hi, good evening, sir.
Hi, good evening.
My first question is on the kind of cost inflation that we are seeing. We understand that there have been fairly sharp price increases that have also been taken. Just want to see the connect between the kind of cost inflation that we have seen and the kind of price increases that we have taken.
Yeah.
What's really going to be the strategy around that. Do you think that we have largely passed on the kind of inflation that we were seeing in the last few months?
Yeah, very fair point, I maybe I should have actually talked about that a little bit, this is something that we are acutely aware of and watching very carefully. Because of the war, there has been price, there has been cost inflation as well as availability issues in several of our products. So far we have largely managed this by of course managing cost, but also passing on price increases into the market. In the last, you know, since the war was launched, we have passed on two price increases into the market in our ECD business. We have, frankly, those price increases have been ahead of competition.
I am hoping that competition rather than playing the pricing game, will now also start to see that the impact of the war is not going to go away anytime soon. That remains a concern. Frankly, we are kind of, we have a war room which is dealing with this on almost a weekly basis, if not a daily basis. I don't really, I should have talked at some more length about it, but it's something that is impacting us as well as is impacting everybody, I assume, in the market.
We, while we are trying obviously to behave like the industry leaders that we are, passing on price increases, we'll have to wait and see how that evolves into the market. Yeah.
Sure. Any numbers that you can put to it? What kind of cost inflation would we have seen, and these two price increases cumulatively, how much would they account for?
If you look at it, for Q4, we have taken a, or even, cumulative for last year, we have taken about 7%-8% price increase in our lead category, like fans. A large part of that coming in Q4, by and large offsetting the material cost inflation that we had. Subsequently, we are seeing further material cost inflation happening in April. Large part of that, we have tried to offset through pricing, combined with some cost activities also that we have taken as part of Unnati. Some of these benefits could be back-ended, but it'll also help us to ensure that the margin rate comes back as we move forward. Near term, we are waiting and watching. We are more keen on maximizing the demand.
Summer starting pretty well means that as to we are entering the quarter well. We just want to maximize that and take a call as we move forward on what is to be done for balance of Q1 and Q2.
Sure.
Thank you.
That's helpful. Thank you, sir.
We'll take our next question from Dhruv Jain from Ambit Capital. Dhruv, please unmute and go ahead with your question, please.
Thanks a lot for the opportunity, and congrats on a good set of numbers. I had two questions. One, you know, you've spoken a lot with respect to the solar ramp-up in the past, and you also wrote in the presentation that you've seen a reasonable amount of growth in solar pumps. A, what's the kind of contribution that this portfolio's had in FY 2026? In terms of ramp-up, you know, just wanted to understand in FY 2027, what's the ballpark kind of contribution do you expect that this portfolio will be for your, you know, overall top line?
Okay. Here's First of all, you know, the way that we deal with the solar business is in two parts, and they sit in separate PLs within the company. The back end is integrated, but the front end is not. Right? We have solar pumps and we have solar rooftops, right? Solar pumps, you know, if you recall, we started with an INR 20 crore revenue three years ago. Then it doubled to INR 200 crores, and this year it's, I don't know if we are disclosing, but that, you know, very done significant growth over that INR 200. Very significant growth over that last year, right?
So that business has grown by fair to say, leaps and bounds, right? Insofar as the solar rooftop business is concerned, which we've started more recently, it's fair to say that this is something that we've disclosed. The solar rooftop business, when we started, we quickly managed to increase our order book to order of magnitude about INR 500 crores, right? We are in the process of executing solar rooftops. Out of which, as you heard, we have already executed about 5,000 homes. As we've disclosed in the past, that 35,000, the order book comprised about 38,000 units in Andhra and some more in Telangana, right?
As you can see, that business is starting from zero, right? The order book needs to be, you know, completed, reasonably quickly. That should give you a sense of how that business is doing. I don't know if that answers your question.
Thanks a lot. I think this is useful. The second question is on lighting. You know, while you've had a reasonable top line growth, a good top line growth in this quarter, but we've seen some dip in margin. What explains that? Incrementally, you know, how should we look at this business going forward? Do you think that this kind of growth that you've seen in this quarter, if not in the same range, you know, is the worst over? I'd rather ask that question in that business, and we should start to see a reasonable top line growth there.
Okay. Let me answer the question, Kaleesh. See, insofar as the lighting business is concerned, this used to be a business that, as you will recall, there used to be perennial concerns over both growth, profit, et cetera. We have, I think it's fair to say, made a very concerted effort over the last three years to fundamentally change the trajectory of our lighting business. What you are seeing now is the benefits of that changed trajectory. There are a few things that have happened in, you know, very, very succinctly, there are a few things that have happened in the lighting business, which comprises two parts, B2B and B2C.
In the B2B business, we have changed the kind of products that we used kind of contracts that we used to take on, right? A large share of our contracts in B2B used to be government related. I can tell you that the share of government related contracts has declined. Maybe order of so much, as a part of the mix, it's declined by nearly 500 basis points so they are not only less government focused but also higher margin, right? For instance, we've stepped up materially our share of indoor commercial, which we didn't do earlier. That's things that we are doing in B2B. In B2C, the product mix has changed hugely, right? We used to be a lamps and battens company.
We are actually a panels and a lamps and battens company, together with a range of other products like floodlights and so on and so forth, which not only are higher unit price ASP, but also higher margin, right? Underpinning all of this, we have also changed dramatically our supply chain in lighting, right? Last year, you saw the benefits come through of, first of all, our fully restructuring of a lighting unit that we used to have in Vadodara in Baddi, and restructuring of our unit in Vadodara, right? During the year, we talked about clearing the deck, if you will, right?
This was another clearing the deck that we did earlier in the year, where, you know, we reset the costs, we gave VRS to a whole bunch of people, and now the cost structure and the way business is done in Vadodara is very different. That is obviously also helping us compete in the market. Earlier, if you remember, the constant discussion about Crompton was where is there going to be a constant price erosion in our lighting business? We, you know, I think we've managed to address those issues. We are growing strongly in the teens now. We also have robust profitability. Insofar as margins are concerned, I must tell you, we are now supplementing our profitability with more money back in the brand, right?
In lighting, for instance, these margins have been realized after a stepped up investment in the brand, right? This is Again, I hope this is nothing new to anybody, because I've been telling people that this is what we do, right? Fix the supply chain, fix the product range, and continue to invest in the brand, right? That's kind of Actually, if you look at, year-on-year, the margin is roughly the same, and that's after a materially higher investment in ad spends during this quarter.
Thank you.
Next question is from Indrajeet Agarwal from CLSA. Please go ahead.
Hi. Thank you for the chance. I have two questions. First, on the new segment, the Energion premium part. What is the sourcing strategy and which product segments would we be presenting here? Would it be more in-house or outsourced?
Hold on Indrajeet, if you will, we will, you know, leave this with us a little bit. I don't want to I'm just announcing the plan just now and the creation of the PL. What I can tell you is that the products that are coming out of Energion are products that we have been developing over a period of time in our innovation center. These are, you know, they'll either be distinctive looking or cutting-edge technology or both. Right, Swetha? Right.
I think the good news is that we've made considerable progress in, you know, in this area, and in course of time, there will be products that will come in this segment which come out of different parts of our PLs as well. Some PLs that we that may not exist in Crompton today, but many of these products will be ones that for which we have existing product lines in, obviously for, with distinctive technology and looks.
Sure, sure.
I can't tell you more just now, Indrajeet.
Sure. Thank you. My second question is on the new segments that are already operational, that is solar pumps, solar rooftop, and wires. What kind of, you know, top line we could estimate in the next couple of years, and is the margin broadly similar to ECD segment, the erstwhile ECD segment, or material different from what we have over there?
I already told you, new segments, I gave you a sense of the kind of order book that we have in Solar Rooftop. Solar pumps, we've given you a sense of the kind of trajectory that's been there. We'll see how that trajectory evolves, but we've given you a sense. Wires is something that we've started selling in the market just now. I would not speculate so much. If you don't mind, we'll not talk about what kind of revenues will come in each one of these businesses, but I do want to say this, that the ROCE in these businesses is strong, that is because Crompton has a right to win.
We don't enter a business unless we believe that we have a right to win, right? The ROCE in these businesses is strong and, generally speaking, as you would have seen in our, in when we entered solar pumps, we're quite frugal in the way that we enter these businesses. Profit margins at an EBIT level, because they have different structures, right? At an EBIT level, especially after they ramp up a little bit, are pretty robust.
Sure. Thank you so much.
Thank you. Next question is from Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Yeah. Good evening, team. Thank you for the opportunity. Sir, for FY 2026, if you could give us some sense. We've had 1% growth in ECD. You know, if you could call out, if possible, the category-wise growth. If not, at least which categories have delivered growth and which have seen pain. If you could just quantify.
Sure
for FY 2026.
Achal, sorry, your math and our math is slightly different, I think. Maybe what you can do is have a conversation with Khalid separately, but because the growth is not 1%. Anyway, let why don't you have a offline conversation?
Yeah
What I can tell you is, in the ECD business, across every product that we have in ECD, we have gained share. This is numbers that I'm sure are easily available to you from MarketPulse, et cetera, right? The strongest growth in ECD has come from SDA, where, you know, as we've said before, the growth for the year is early 20%. Last quarter, close to 30%, 30% growth, right? Insofar as our fans business is concerned, also grew. The growth in that business has been, like I said, there was a in our fans business, we've grown market share.
Maybe not a lot, but kind of, we've still grown. The big gain for Crompton has been that, you know, we wanted to step up our BLDC product range, and last year we introduced Reon, the end of the year, we introduced Gracee and Elevate, right? Apart from the next range of, you know, a smart range of other BLDC fans, including Fluido and SilentPro. I think it should give you a sense that, you know, the BLDC range growth has, as a consequence, stepped up significantly, right? It's a product that anyway was growing fast, and there we are growing faster than the market, right?
I think I said earlier that, give you a hint earlier that, the BLDC range, for instance, has been growing at about 30% plus, right? Insofar as pumps is concerned, it the pumps, residential pumps and agri and specialty pumps. I gave you a sense of the last one. Solar pumps, I've already told you that it's grown very strongly last year. I think it's fair to say that it doubled. It's also a year in which, because of heavy rains, the demand, industry demand for pumps was quite tepid. Residential pumps was quite tepid. I'd say we kind of broadly maintained our market share in residential.
Insofar as agri is concerned, where we are not market leaders and our aspiration has been that we will step up our growth in agri and specialty. We, in fact, did some particular product interventions during the year. As a consequence, agri and solar, sorry, agri and-
Sir
Speciality, we've grown in the teens. Is that a fair number?
Agri also we can Zero is going gain market share.
Okay. Rajat is telling me that while the growth, industry growth was frankly very tepid, we also gained market share in resi. We gained, of course, market share in agri and we By the way, where areas that other people de-grew in materially, we grew in the teens, right?
Yeah.
Am I missing any ECD segment? LDA. LDA, I said. LDA. Again, not a great year for LDA at all because as you know, summer was very tepid. There was heavy rain. Again, we've gained market share. As I said earlier, in water heaters, we are the second-largest player in GT. Air coolers, we, and I think most of the market, we're stuck with heavy inventories because they did not sell in early part of the year where which is really season. This season, I think it's fair to say that we've liquidated those and I think marginally gained market share.
Yes.
Margin, I think very marginally we would have gained market share in air coolers, right? Does that answer your question?
Yeah, yeah, comprehensively. Just a clarification. Sorry, I'm harping on this. I'm looking at the consolidated segment-wise revenue breakup in the ECD-
Why don't you have a chat with Kaleesh?
Okay, okay.
Why don't you have a chat with Kaleesh? Yeah.
Sure, certainly. This is my second question with respect to margins. You know, how do we see, given the given the new categories, R&D, A&P investments, everything put together, how do you see the margin trajectory over next couple of years? Do you see going back to the historical levels, or you think the improvement will be more gradual?
See, margins, look, margins in the near term, obviously everybody's kind of struggling with the fact that there has been a sharp increase in input costs, right? Which we are trying to address by passing on the cost to the consumer. I'm hoping that the rest of the market also follows, but we'll see, right? Over a period of time, I, you know, as the turbulence that is, you know, we are hoping episodic because of the war, as that settles down, I think margin should go back up. What speed they will go back up, I cannot tell you, Baba. You know, the stepped up investments are already in the book, right?
Including CapEx and expenditure, as I've and OpEx, as I've said to you guys earlier, for a company of our size, we are spending annually about INR 100 crores in R&D and innovation, right? Which is why also we are able to come up with some of the products in the super premium range as well, right? Look, anyway, so those are pretty. Lots of these investments are already in the book, and already ongoing investments. That brand investments, last year, for instance, Butterfly relaunched its entire range. You know, and you know, you will see similar things happening across the product portfolio.
A consistent theme in Crompton for the not for the last three years, but for the last 10 years, 12 years actually, has been premiumization. Now, what you're really seeing is premiumization in individual products. Also premiumization, not only bottom-up but top-down, right? As you introduce a premium, super premium range of products, that obviously showcases the kind of capability that Crompton has, right? In terms of product development, in terms of design, et cetera, et cetera. It's, you know, all of this we are hoping will help towards the, you know, improving the brand positioning of Crompton going forward. I don't know if I answered much more than you asked for, but sorry. There you have it.
Thank you so much, sir. That's wonderful. Thank you.
Thank you. Next question is from Aniruddha Joshi from ICICI Securities. Please go ahead. Aniruddha, please unmute. Yes, please go ahead.
Yeah. Thanks for the opportunity and, sir, good set of numbers. Sir, two questions. On Butterfly now, we have taken a big write-off. What is the tax break, first of all, available on that? Earlier, the thought process was to merge Butterfly with Crompton, any change in plans or any further update on that? That is question number one. Question number two, when do we see the national rollout for the wires happening? Currently, it is rolled out in two states.
Yeah.
How do you see the national rollout happening? Any plans or whether it will be rolled out completely in next six months, or it will be a gradual launch, or we will play it in certain markets only being a new player. What will be the strategy on that? That is question number two. Last, from July, we are going to see BEE norms getting implemented in geysers or water heaters also.
Yeah.
What will be the cost increases plan, and how do you see the readiness of industry as well as Crompton? Is there any plan to see or any possibility to gain market share in water heaters also? Yeah. Thanks. Thanks, sir.
Well, I don't know. There's five questions or four questions, but I lost track somewhere along the way, Aniruddha. Math is not so good, but okay. Tax benefit, I'll come to you, Kaleesh. This is not driven by tax. This, the write-down of Butterfly valuation, well, of Butterfly value has nothing to do with our plans to merge the companies, right?
In fact, this certainly does not delay or adversely impact any merger that we may have. That is on the cards, and that is something that we have announced in the past also. Correct.
Correct
That's, in fact, if anything, what you can see is how much focus and effort has been put into taking, you know, first of all, clearing the decks again in Butterfly, where we actually took some losses, wrote off some lots of stuff, and reset the terms of trade and really built it back to what is a very robust business. Butterfly is a Butterfly and Kitchen is a hugely important area, and we're an area that we expect to get significant growth in. Like I said already, close to 30% growth in SDA, which is the Crompton Kitchen Appliances and the public, and you already know the Butterfly growth is. No questions about that.
Insofar as the rollout in wires and insofar as the I think the fourth question was What is the fourth question?
BEE.
BEE.
BEE.
BEE.
Crompton.
BEE. I'll let Shaleen and Rajat answer quickly. Yeah, guys.
Right. I'll go first, if that's all right. Yeah. I think you, as you very correctly put it, the launch did start with Tamil Nadu and Karnataka. We will ramp up throughout the country. It will not be spread over the entire year. We will not restrict our distribution to select town or cities, but seek to leverage the maximum extent of Crompton distribution that we have nationwide.
As is our preparedness for the BEE. For Crompton are concerned, I think we are fully prepared. We already done the required changes in the product category. In terms of cost, there will be some changes, but that we are planning to mitigate and also maybe pass on to the market, but with that will take eventually when the time comes.
Yeah. Kaleesh, you want to say.
No.
There's no tax angle at all on that, no?
No tax angle.
Sorry, sir. I missed the tax angle.
No. We are saying there is no tax impact on account of this, Aniruddha. This is not a decision that is taken from a tax perspective. Just to clarify, this is not a write-off. This is an impairment that has been done in line with the accounting practice. This is a test of value of an asset. From an accounting perspective, this has been recognized.
Thank you.
Sure. Thanks.
Next question is from Pulkit Patni from Goldman Sachs. Please go ahead.
Sir, thank you for taking my question. Would it be possible to share the breakdown of the ECD segment, especially the broad breakdown?
Pulkit, I'm sorry, we don't really break that down. You have a conversation with our team, we'll give you the best.
You don't.
That's not something that we've been doing historically.
Given the fact that, you know, we've got more segments getting added, it's just useful for us to be able to understand what's the contribution from new segments versus growth in the existing ones. If there's any way you can share it.
Which new segment, Baba? Which new segment?
No, I'm talking about, for example, rooftop solar, which is ramping up.
No, I gave you a sense of where it is rapidly ramping up, rooftop solar. You know, both are, rooftop I mean, of course, solar pumps has already ramped up, which I think we've given you some sense of what the solar pumps business is doing. I've already given you a sense of how much the solar rooftop business is doing. There is a minimal impact of this last year, but a significant ramp up and, as we speak, right? Both the latest segments that we've introduced, I must say, very robust and encouraging growth in both of these segments.
I don't know if what we can share more than that.
Yeah.
Have a separate conversation.
We don't typically share, Pulkit. I think today we have three segments as lighting, Butterfly, and ECD. Within ECD we see largely the growth opportunities is there across segments. As and when solar becomes a meaningful business, to the size at which we are operating a lighting or a Butterfly for us to materially impact the results, we'll start calling that out separately. Considering the fact that we have been reasonably giving clarity, what is the order book that we hold or order book that we execute on Solar Rooftop and solar pumps, that gives us a fair idea of what the pipeline is. Outside that, we have already called out our aspiration in solar as a portfolio, that we want to build INR 1,500 crore business in the next three, four years is where the journey is.
That's a separate thing outside this.
Sure.
Actually, I said-
And next-
actually I said, Kaleesh, to be fair, I said we want to sorry, guys. You guys must remember. I didn't say INR 1,500, I said INR 2,000 crores.
Sure. Sure, no problem. Thank you so much.
This is on record.
Thank you, Pulkit.
Just in case anybody's in any doubt.
Next question is from Natasha Jain from PhillipCapital. Please go ahead.
Hello.
Natasha, please unmute. Yes, go ahead, please.
Thank you for the opportunity. Good evening, gentlemen. Just one question. When we go on the ground, are we just hearing initial signs of stress in terms of payments being delayed, say, from the last leg of the value chain, meaning the contractors, builders, et cetera, and therefore the stress is being seen slightly in the entire value chain. Would want to know if, you know, this observation is correct. On that similar line, would want to also know if we do any kind of channel financing. Thank you.
There are two, first to start with, Natasha, I think, one of the strongest points of our business metrics and financial metrics is cashflow generation. You would have seen that it continues to generate a good amount of cash even in FY 2026, crossing INR 500 crores. Second is in terms of how we are looking at the overall value chain on collections, our debtors in traditional trade kind of remain the same. There is no major change compared to last year to this year. In terms of solar pumps, which is the business that we do with the government, the collections are moving in line with what is our expectation that we have with all the contractors, with a very good ROCE coming in also.
We don't see any specific challenge in the categories that we operate in at this point of time.
I'm not quite sure, Natasha, if you know which part of the value chain you're referring to when you say builders.
Contractors.
Builders and contractors. I suppose the, you know, our exposure there is relatively small, so perhaps that is not something that we've so far seen. It's always possible that it'll spread, but at least so far, you know, I'm sure it's building up, but we haven't seen so much of it is what I'm saying.
All right. Thank you so much, sir. This is helpful. All the very best.
Thank you. Next question is from Muskan Agarwal from Swan Investments. Please go ahead.
Yes, Muskan.
Yeah. Hi.
Muskan, please unmute. Yes, go ahead.
Yeah, hi. Thank you for taking the question. I just want to know, like, for the Reon that has been launched, what will be our go-to-market strategy for the same?
Baba, give us a little bit of time. We will come back. You know, as we launch products, we will flesh this out and tell you. As you can imagine, when you launch more premium products, the business that, you know, the premium segment really go-to-market comprises EBOs, MBOs, large format retail, e-commerce. Right? At a very broad level, Swetha.
Yes.
You can expect that that is something that we would have a similar strategy for. The good news is that we had invested. The business itself was not very large scale, which, you know, which I think will change going forward. We had invested in building out an EBO platform for our LKA business. You know, I would suspect that that's something that the Reon brand would be able to significantly leverage off. Now insofar as large format retail is concerned, which is really MBOs and, you know, these chain stores, you know, I must tell you that that is something again that Butterfly, for instance, and at Crompton, we've been investing in growing quite heavily.
If I'm not mistaken, the fastest growing channel for Butterfly last year was the large format retail, right? This is Again, we've been building up the capability in-house of being able to introduce the kind of high premium products that Reon will introduce. I don't know if that answers your question, but, you know, this is broadly the way that it'll go. It'll also be supplemented of course, with GT, but the share of MBOs, EBOs, LFR, e-commerce tends to be higher in premium products.
Yes. Thank you.
We already have order of magnitude about 70 EBOs, which are running in the country.
Okay. Very helpful. Thank you, sir.
Thank you. Next question is from Rachna Kukreja from SIMPL. Please go ahead.
Thank you for the opportunity. I have two questions. My first question is related to the kitchen industry and Butterfly. See, in ECD industry, gross margins have seen slight pressures due to raw material inflation. Similarly in kitchen appliances segment as well for Butterfly, are we seeing similar pressures on gross margins? Would this continue in the near long term as well? What has been the impact on consumer demand, and are we passing on the cost increases fully or absorbing some cost in Butterfly as well as in kitchen as a whole?
Maybe I'll kick off and then you add, Swetha. Look, cost increases are across the board, yeah. All our products are facing cost increases. If there is a petrol price hike, I think those cost increases will further be added. It is not unique to any product range. It may be in different measures, there are cost increases that are coming and happening. The kitchen is no outlier. In kitchen as well, it is inevitable that we pass on these cost increases to the consumer. The extent that we are able to pass on these cost increases, of course, depends on two things.
One, whether the consumer is willing to pay, and two, whether your competitors are doing the same or taking a large share of this on their own books, right? As we have said before, our approach as leaders of the industry And even in kitchen appliances, by the way, we are the second-largest in the industry, so there are nothing to sniff at between Crompton and Butterfly. We have a very large operation. Our preference has been to pass on price increases. We haven't necessarily always seen so far some of our competitors follow. Having said that, we probably expect that they will. There's another aspect of whether the consumer is willing to pay or not.
There are two aspects of this, and I'll specifically leave the question to Swetha. Remember that many of our products are only partially discretionary, right? If you need a fan, you need a fan. You can't go and settle for something else, correct? If you need a If your mixer grinder has conked out, you need a mixer grinder. You may downgrade a little bit, but you cannot do without the product, right? The flip of this is the people who are buying it because they don't need it are anyway people who can afford to pay, right? What typically tends to happen is that when prices go up, there's a sticker shock. The first time he comes into the store, he will say, "Arey, this was available at INR 2,000 crores.
Now you are giving it to me for INR 2,200 crores. Sorry, I will not buy." He will go away. Then in two, three days, he'll realize, "Boss, INR 2,200 is not coming down. It is only going up." Then he'll come and buy. You know, this is the way that consumer behavior works. Swetha, you want to add, yeah?
Pretty much the same for Butterfly also.
You've also taken price increases in Butterfly.
Yes.
Again, similar price increases as Crompton has taken in the recent Crompton ECD has taken, right?
Okay, understood. One more question. Our idea was to leverage, you know, Crompton's distribution network to expand Butterfly's business in non-south markets. We had also opened warehouses in these regions. Now it has been almost a year. Could you provide some quantitative color on how Butterfly's business has scaled in non-south markets, and what would be the benefits of leveraging Crompton's distribution network?
I, two things. One is that, as I said earlier, our focus on Butterfly has first been strengthen the core, right? Really the effort of the last one and a half years has exactly been this. We are not to forget that we are the leading player in kitchen appliances in South India, that is where a bulk of our cash flows, our profitability, our brand recognition comes from. We focused a hell of a lot on getting that back on track and really getting back to a trajectory to a point where now we are gaining share across the board there, right? In the South, right? I would say that that is something that we are considerably advanced in.
In the coming year, the focus will be on gaining, you know, on gaining traction in Butterfly in other parts of the country, in NEW, so to say. I think from time to time we'll come back and keep you posted about how that is going. There are various parts of Crompton which Butterfly will leverage out of. Things like a huge service network, the fact that Crompton is a broadly very, very well-known brand, and so on and so forth.
There are What we would do in Butterfly is that we are again starting in certain markets where we hope to gain material traction, and then you will see this get rolled out in other parts of the country.
Okay. Understood. One last question, since I assume I'm the last participant. Butterfly enjoys leadership in grinders and gas stoves. As we grow, according to you, which categories are evolving as being the next category leaders and have the potential to gain leadership? Additionally, across which channels do you think category leadership will be evolving most strongly?
Swetha, you wanna answer that question?
See, first thing is, we have a very strong leadership in gas stoves in South, and gas stoves being our lead category, I think we will focus our energies in terms of taking the lead and moving forward in NEW, and emerge as a category leader at a national level with respect to gas stoves. That's where our energy is going to move behind for the first part. The second one is even with respect to mixer grinders, I think we're also looking at stepping up another category within the mixer grinders, which is basically mixer grinders plus plus. Maybe it could be a food processor or a juicer or, you know, anything plus that comes from a mixer grinder.
I think that's the fastest growing segment within mixer grinders where we will focus, and we'll try to make the brand presence felt in that particular category. Apart from that, there are new emerging categories in kitchen that we are looking at. You know, some of it which have already taken off, like for example, your air fryers, where the penetration is low and the growth is very high. Even in case of chimneys, where you have a decent growth coming in from a low penetration category. These are few spaces that we are also looking at, but our major of our focus would be to take our strength that we have in South and become a national leader in those particular categories where we already have built capability. That's how we-
Yeah. Yeah. Yeah.
Thank you.
Okay. Thank you.
That was the last question for today. I now hand the conference over to management for closing comments. Over to you.
Yeah. Well, ladies and gentlemen, thank you so much for joining this earnings call. As I said, in the beginning, this is a very exciting times for us. Many of the things that we started investing in have, you know, as you can see, have started to bear fruit. Are also, I think, showing up in the way that the business is evolving. If you have further questions, please, you know, do not hesitate to get in touch with Rishabh, Ruchir, Kaleesh. Right, guys? Yeah, and you have a good evening.
Thank you, sir. On behalf of Avendus Spark, that concludes this conference. Thank you for joining us, and you may now exit the meeting.