Crompton Greaves Consumer Electricals Limited (NSE:CROMPTON) Q2 FY23 Earnings Concall dated Oct. 27, 2022
Corporate Participants:
Rangarajan Sriram — Managing Director
Shantanu Khosla — Managing Director
Yeshwant Rege — Vice President Strategy and Financial Planning
Analysts:
Aniruddha Joshi — ICICI Securities — Analyst
Renu Baid — IIFL Securities — Analyst
Siddharth Bera — Nomura Holdings — Analyst
Keyur Haresh Pandya — ICICI Prudential Life Insurance — Analyst
Achal Lohade — JM Financial — Analyst
Bhavin Vithlani — SBI Mutual Fund — Analyst
Sonali Salgoankar — Jefferies. — Analyst
Charanjit Singh — DSP Mutual Fund — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen, and welcome to the Q2 FY 23 Earnings Conference Call of Crompton Greaves Consumer Electricals Limited hosted by ICICI Securities Limited. [Operator Instructions]
I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities. Thank you, and over to you, sir.
Aniruddha Joshi — ICICI Securities — Analyst
Yeah. Thanks, Michelle. On behalf of ICICI Securities, we welcome you all to Q2 FY ’23 results conference call of Crompton Greaves Consumer Electricals. We have with us senior management represented by Mr. Shantanu Khosla, Managing Director; Mr. Rangarajan Sriram, Managing Director of Butterfly Gandhimathi Appliances Limited; Mr. Kaleeswaran Arunachalam, CFO; and Mr. Yeshwant Rege, Vice President Strategy and Financial Planning.
Now I hand over the call to the management for initial comments, and then we will open the floor for question-and-answer session. Thanks, and over to you, sir.
Shantanu Khosla — Managing Director
Thank you, Aniruddha. Good morning, everyone, and I wish you all and your families a very-very Happy Diwali. We have today out here myself ofcourse, Shantanu and Yeshwant, but I’d also like to introduce Mr. Kaleeswaran, who is our new CFO. Who was — who came in about three months ago, after an extremely successful stint in Eicher. We also have joining the call today is Sriram, who, as most of you would be aware, used to run the fans business in Crompton and is now assigned as the Managing Director of Gandhimathi — Butterfly Gandhimathi. Unfortunately, Mathew could not join us today because he’s traveling overseas.
Getting right into it and talking about the overall performance. The one context I would like to provide before I talk the specific numbers, is, given all the variations in the base period because of COVID, high levels in the previous base quarter due to the COVID — post-COVID pre-buying, etc, we do think that it is important as you will look at the results, look in the context of both the overall half-month performance and also a more longer-term — three-year CAGR as we try and assess the performance given the variations in the base period.
Moving on, the consolidated quarter two revenue for the group was — grew 23%, representing a three-year CAGR of 17%. Standalone revenue for Crompton declined by 3.8%. However, this represented a three -year CAGR of 7% to 8%. Standalone Crompton business grew a healthy 21% in half one of this year. ECD revenue contribution is in excess of a INR1,000 crores, INR1,062 crores. Fans business did decline for the quarter. However, as I mentioned earlier, if you look at it from a slightly longer perspective, the three-year CAGR for the fans business over this quarter was a healthy 10%.
After — as you’re aware given seasonality and very-high inflation, our pumps business has been challenging for the last few quarters. However, we are starting to see initial signs of green shoots of recovery there, especially this quarter in the Speciality Pumps business, which grew by 20%.
The appliance segment continued, albeit, off a small base to really have consistent strong growth and even in this quarter with a high base last year delivered a growth of 12%. More importantly, it had a three-year CAGR of 27%. This has been driven by continuous program which is now stretching over a couple of years of portfolio refresh and addition of new product categories.
Mixer grinder where we’re now putting in a number of new products and also strong marketing support grew by 15% across the quarter and our geysers with a really a landmark crossing 400,000 geyser units, which we sold this quarter. Lighting revenue was INR269 crores. This business has continued to be challenged due to the rapid decline of the conventional lighting business, which has declined by 35%. For the quarter, the B2C LED business was essentially flat. Competitive intensity of this business has also been extremely high.
On a rolling 12 month basis, we continue to improve our market share and improved it by 5% at premium fans, whereas on, overall basis, it has moved up marginally. Over the last two years, we are the only company that has consistently gained retail uptake market share quarter-on-quarter, both in the premium category and the overall fans categories.
Moving on to a few comments about margins and profitability. Very encouragingly for us, in spite of the high inflation and relatively challenging macroeconomic situation, this quarter, we have essentially recovered our material margins and our gross margins. In fact, our material margins at 31.3%, are very close to our all-time high material margins of 32% which we delivered last year in the same quarter. This has been a reflection of the continuous strategic work which we have been doing on cost reductions and efficiencies. Also, of course, including the price increases that we passed on in the past 18 or so months to handle the extremely high inflation. Mix and product mix improvement, as has consistently been the case has also began a key to help us maintain in the extremely challenging situations, material margins and continue to outperform the industry in this area.
EBIT margins, however, while steady versus the previous quarters and also continuing to be best-in class across the industry has declined versus the previous quarter. Sorry, have declined versus same quarter previous year. There are really two reasons for this, one is, last year in this quarter we had a record high EBIT margin as we came out of the COVID pandemic, of 15.5%. Secondly, more importantly, we have continued in spite of the challenging situation, our long-term strategic investments in building our organization, our capabilities and our brands. This investment we believe is right. Its right to make and will continue to pay dividends as inflation settles down and volume growth comes back in the marketplace. These are investments which we have made in advertising and promotion in our entire new R&D innovation center, in the introduction of our new business at the premium end of large kitchen appliances. In alternative channels, rural, e-com, etc, which have continuing to show robust growth and our program of building manufacturing excellence.
Our focus on our long-term programs continues and we believe these are — remain the right areas to focus on. As we’ve talked before, these are brand excellence. In Q2, specifically, we kicked-off our in-store retail transformation project to improve overall consumer experience and Crompton brand experience in stores. We have invested in resources to create awareness around our extensive coverage for our new builtin kitchen segment. Also, we are fully leveraging our Saathi, influencer loyalty program, to drive plumer registrations. We’ve also collaborated with well-known influencers on YouTube to communicate product benefits. Television remains a critical investment area for us. In fact, over this last period, we have launched and have invested in a new advertisement for mixer grinder, called “The secret of fine taste”, which we believe is one of the key drivers behind the continued mixer grinder growth.
Second, of course, is portfolio excellence. We have continued to invest in developing products driven by consumer insights and future technology ensuring superior quality and performance. Our investments in R&D have contributed to our increasing market share. We are investing in processes, people and automated equipment to improve new product development. In this quarter, we have strengthened our BLDC band range, introduced a new range of mixer grinders and water heaters and a new category of rice cookers and toasters. Go to market excellence remains a sustained focus area, driven by efforts on people and process capability, especially on alternative channels, which grew by 26% versus last year driven by reach improvement and leveraging technology for improved productivity. CSD and rural channels led the growth quarter-on-quarter with a 45% growth versus year ago. Briefly, on our new segment that we have large appliances, this continues to track very much as per our plan. We have opened close to 300 counters. Our average sales per store is significantly ahead of our going in objectives. We have also designed and introduced 22 dedicated Signature Studios, where consumers can experience the full range and the benefits of our premium appliances.
Moving on just to briefly update on Butterfly. First, is a — as most of you are probably aware, we sold 6% of our stake in Butterfly through of off the sale route. Earlier, we have had 81% stake in Butterfly as of August, ’22, out of this 55% of the shares were purchased for the share purchase agreement in March, and we acquired the balance 26% through an open offer on June, 22. Pursuant to the minimum public shareholding compliance, we sold 6% stake through an offer per sales route and completed a transaction in September 22. Our current shareholding of Crompton is therefore of 75%. The FY promoters of Butterfly Gandhimathi has sought reclassification from promoter and promoter group to public category.
Reaching on the performance of Butterfly in the past quarter, the Board of Directors of Butterfly Gandhimathi approved the results for the quarter ending 30th of September. As per the results published, Q2 sales down by 5%, but growing at a robust growth of 20% in half one versus last year, maintaining its strong position in especially the e-commerce segment.
As part of our long-term strategy, the Company is driving a change in the channel mix in favor of retail versus online, while online continues to be the important and growing channel, historically the Butterfly business has been overly skewed to online. This has actually resulted in significant growth coming even this quarter in the offline channel, while we continue to maintain our leadership position in the online channel and also as pricing therefore becomes more stable and consistent across channels, an improvement in the gross margin by 60 basis points versus Q2 last year. This renewed approach has delivered double-digit growth in retail during the quarter across all three categories of mixer, stores and pressure cookers.
Going ahead, we have a strong focus on new product launches driven by innovative products behind meaningful consumer advantages, reach expansion, and adding and driving programs in regional chain stores. The business clocked a revenue of INR368 crores, gross margin stood at INR29.8 crores, and EBIT margins stood at 11.2%.
Briefly on working capital. In Q2, consolidated net working capital increased by INR120 crores versus March ’22 levels. This however, was essentially due to reduced trade creditors. Our inventory and our debtor days continue to be on track and on target. We took a conscious strides given the uncertainty in the market, the upcoming Diwali season and the challenges that some of our vendor partners are facing in the inflatory environment to help our vendors over this period with — and that’s resulted temporarily in this increase in trade creditors. — Sorry, an increase in working capital.
Consolidated cash and cash equivalents stands at INR2,080 crores for the period ended 30 of September. This includes INR161 crores received out of the OFS of 6% stake in Butterfly. While there is still uncertainty as we look at the future and there is still a certain amount of uncertainty as to when exactly volume growth we will begin to recover, we feel confident that we are very well-poised with our material margins well in control, commodity inflation having currently leveled off and our continued investment behind the fundamentals behind both the Butterfly brand and the Crompton brand to drive our share and top line as we look forward.
With that, I’d like to just stop and pass on to any questions, any of you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Renu Baid from IIFL Securities. Please go ahead.
Renu Baid — IIFL Securities — Analyst
Yeah. Hi, good morning, team.
Shantanu Khosla — Managing Director
Good morning.
Renu Baid — IIFL Securities — Analyst
Good morning. My first questions is on Butterfly. If you can help us understand, last quarter we had taken some price corrections as well, but looking ahead in this quarter when we saw gross margins are broadly flattish on a sequential basis. So, if you can help us understand how do we look at the gross margin improvement going ahead in line with pricing changes and portfolio mix change? And also an update on how has been the broad revenue mix across our end channels?
Shantanu Khosla — Managing Director
Okay. Let me take the first one in terms of we are thinking of margins in Butterfly and then I’ll pass it over to Sriram to talk to your second part, which is how we are looking at it across revenue mix across channels. On the first part, frankly, Renu, we have had already — in our first couple of quarters significant improvement from the traditional levels at the EBITDA level, which is from 8, now being at about 11 for the last two quarters. We do believe that we are now confident about the base level of EBITDA margins being a 10%, and now we will continue to work over time and see how much closer we can get to best-in-class.
Our approach is really to continue just like we’ve done in Crompton to drive costs and become more efficient. However, at the current gross margin level, we believe this is a growing gross margin level. So, the savings we get in costs will largely be reinvested in investments to drive market share top line and innovation as opposed to looking at further increasing the gross margin, though cost savings will be generated. We already seeing good initial progress on that, but that will be used to invest in the business. And as we build this overall scale and share with those investments, we believe that over time this could also — would also lead to a directional improvement in EBITDA margins.
Sriram, on the channel mix revenue?
Rangarajan Sriram — Managing Director
Yeah. In terms of a online and e-comm, I mean, e-comm and the retail channel contributed close to 85% till last year, especially and Q2 being a seasonal period and online, it is slightly dominant. So in this particular quarter we now try to strengthen the retail channel with improving mix of new products, adding more chain stores and adding retail outlets, we see a shift in retail going up, specifically in this particular quarter in Q2 compared to the last year. So, I would say that the retail is now slightly becoming dominant in our revenue contribution out of those 85%.
Shantanu Khosla — Managing Director
Renu, the only thing that I’d add to that is as you look at the business, historically, if you go in the past for this — for the second quarter, online sales used to contribute about 40%, 45% of Butterfly revenue. Now, as compared to this, industry revenue was only about 25%. So, if you look historically what was happening all the growth was being driven by online, and in fact, over the previous 12 months, offline actually declined. What has happened now in this particular quarter as we brought more price stability into the market, what we’ve seen is that the online contribution has come down from about 45% to 35%, still significantly higher than industry. But the offline channels which was roughly declining in the past period at about 8% has now started delivering double-digit growth.
Renu Baid — IIFL Securities — Analyst
Sure. So then coming on Crompton, I have two questions. First, when your comments on the market share in fans did mention that, while there were share gains on a TTM basis, they were marginally higher. Now this if compare until the previous quarter we were having almost of 1 percentage plus point share gain, so have we seen that because of the transition — the interim phase of transition to BLDC some of the newer players — with BLDC portfolio have become aggressive and some off seasonal shave the market share or incremental shares that we’re witnessed were there in the market? That’s first on Crompton.
Shantanu Khosla — Managing Director
Not really, the dynamic which is happened a little is, while we are continuing to grow share in the premium end, we are seeing that there is a certain leveling-off at the lower-end of the marketplace. So, it’s not that the slowing down of share growth is linked to losing share at the premium end of the market.
Renu Baid — IIFL Securities — Analyst
Sure. And, lastly, when we look at the overall margin profile in the ECDs and fans segment, they seem to have obviously, come off from the previous highs, but even compared to normalized EBIT levels of 18%, 19%, they seem to be lower. So, how should we read this in terms of the investments which have been committed for the new large appliances and the core profitability of the fans and the appliances portfolio for us? Thank you.
Shantanu Khosla — Managing Director
Yes. The way you should look at that moving forward is the difference in the margins versus historical, is really at a below gross margin level, like I mentioned. We recovered it at the gross margin level and it is because we have continued to make the investments. Now, as we move forward, we do believe inflation will begin to settle down and growths in terms of real volume growths will come back, if not this quarter then the quarter after that. As that happens automatically, the bottom line margins we expect to come back to historical levels.
Renu Baid — IIFL Securities — Analyst
Sure. Thanks so much and all the best, sir.
Shantanu Khosla — Managing Director
Yeah. Thanks, Renu.
Operator
Thank you. [Operator Instructions] The next question is from the line of Siddharth from Nomura Holdings. Please go ahead.
Siddharth Bera — Nomura Holdings — Analyst
Hello.
Operator
Please proceed.
Siddharth Bera — Nomura Holdings — Analyst
Yeah. [Technical Issues] So, my question is on the near-term festive demand has been Q2, we have seen an impact on the ECD side from both destocking as well as weak growth, any sense can you give us how the festive has gone? And in the second half, do you expect some recovery on the revenue side for the ECD or it may take longer to sort of for us to see that growth coming back?
Shantanu Khosla — Managing Director
Two things, I’ll just separate my response into two separate parts, because, an ECD business it’s really never been festival seasonal business. That has been more driven by seasonality and summer seasonality. So, let me just respond to the festival question because a better way to look at the festival question is really to look at how the Butterfly business trends, because the Butterfly business has — is definitely, a Diwali seasonality business as you’ve can look at from the past trends.
Now, as we look at the Butterfly business right now as we’re moving into the early days of this Diwali period in October, we are definitely seeing a positive trend for Butterfly in terms of secondary sales. Our product moving out from offline stores into the hands of the consumers, which looks encouraging.
On the flip side, we do see that given the — let me call it temporary COVID spikes which happened in online, in the past. Relative to the past, online is not at that spike level, it is continuing to grow, but not spiking like it had done. So is not about that historical levels. So, we see festival demand coming in for that business and coming in reasonably okay with the improvements month-on-month.
Now when you come to ECD, which — as you are aware, a lot of our business is fans. On fans, again, as you folks are probably aware, we are going through over the end of this quarter, it’s through a BEE transition. Now, to clarify, our understanding of the requirements is that we can manufacture and sell till December 31st, create can continue to sell any stock it happens to have on-hand which they bought or was produced prior to December 31st.
Now as we get into the transition, we do expect there to be potentially some uncertainty in the trade as we’ve seen in other regulatory transformations. On the flip side, again as you are aware, at various levels, when the BEE product start coming in, there will be a price increase from January 1, across the board. This may create for some creditors, an opportunity they believe to stock up. So it’s kind of a put-on-call which we have to watch closely as we move through the transition. As we then move into the summer season, currently looking forward right difficult to predict, by then inflation hopefully would have settled down and volumes will be back to normal and then you build the volume growth on top of the pricing growth. I’m sorry, for that long answer, but with all the ups and downs in the past it is a little complicated.
Siddharth Bera — Nomura Holdings — Analyst
Understood, sir. That’s helpful. But would you have any clarity about how much will be the price increase required for the BEE rated fans or it’s still early? And the second part of the question is on the premium kitchen appliances will roll-out which we have been putting, can you share some color on the traction in terms of inquiries and order book which you are getting on — from these stores? And so that just to understand how to — how should we build up the ramp-up? We understand, over the longer-term you have a 10% market share target, but just some near-term color on how the scale-up will be?
Shantanu Khosla — Managing Director
Okay. At let me try with the second question. Like I mentioned, right now we’re focused — our ready to launch plan has always focused on top 10 cities, we stay focusd right now on the top 10 cities. We are very close to having it our distribution and store goals, remember, these are premium stores etc, and its a premium product. As I mentioned, our average sales to stores is significantly higher than what we had planned. We have also begun talking to consumers, who have purchased our product. Obviously, it’s very early days, but some consumers have bought and we have gone and talked to them, and the feedback we’re getting from them in terms of our products and our innovation is very positive. So the anecdotal feedback right now is all positive. We expect this ramp-up to just gradually keep continuing. Our marketing programs to create demand have only really kicked it towards the back half of September. And sorry, I forgot your first question.
Siddharth Bera — Nomura Holdings — Analyst
Well, on the price increase required for the BEE rated fan.
Shantanu Khosla — Managing Director
Yeah. Of course, we’ve worked it, right. In fact, we in the middle of transition and ordering in this thing. On — it will — first a — roughly about 60% our business needs to be converted. About 40% of our business is either already converted and compliant or the regulators don’t require anything different to be done. It’s looking like it’s going to be in the range of — call it around 8% on an average, so this 8%, 9%, so this could vary and will vary by different segment.
Siddharth Bera — Nomura Holdings — Analyst
Got it, sir. Thanks a lot, sir. [Technical Issues]
Operator
Thank you. [Operator Instructions] The next question is from the line of Keyur from ICICI Prudential Life Insurance. Please go ahead.
Keyur Haresh Pandya — ICICI Prudential Life Insurance — Analyst
Well, thank you. The question is regarding — so first, I think you well described the uncertainty on the — in the fan portfolio, so what has been the demand situation ex of fans in the ECD segments, namely other appliances, pumps and the upcoming seasona of water heater? That is first, and second is lighting. If you can just breakup how lighting is doing into various segments, and what steps are we taking to turn-around the slowing poor part of the portfolio in the lighting? Thank you.
Shantanu Khosla — Managing Director
Okay. First question was —
Keyur Haresh Pandya — ICICI Prudential Life Insurance — Analyst
Non fans ECD.
Shantanu Khosla — Managing Director
Got it. Okay. First, let me talk about what we call the appliance business, right? In our non-fans. Now the appliance business really consists of three sub-segments; geysers, coolers and kitchen appliances of various types. Firstly, if you look at the simple numbers, either by each independent segment or in totality, adding them up, the growth are very strong, right? The quarterly growth for small appliances was 12% in spite of high base period and CAGR was I think about 26%, right? So, the numbers are strong and this is kind of consistent across all three segments.
Now that being said, obviously, coolers is very small in this quarter, right? Because it’s really summer, well the growths are very high. Geysers, the growths are high, but we’re just really going into the season. So the real performance of geysers for the year will come in the quarter to be. So, we are actually in this quarter the most encouraged by the growth we’re getting on mixer grinders and other small kitchen appliances where this is actually the big period of sale and that’s been our investment focus largely in terms of introduction of new products, we’ve had a couple of new items in the mixer — mixer range. We’ve innovated on the iron. We brought some rice cooker range, ect. And importantly for the first time ever, we are bringing in advertising support behind this idea of the secret of cooking is in the fine grinding, and that’s helping to really drive our mixer. So, the mixer we feel positive and we actually believe, though we’re coming off a small base, we are performing better in terms of growth than most other competition, the numbers at least we’ve seen over this period in the segment.
Pumps, like I said has been a challenge over the last 18 months as you’ve seen in totality, right? Part of it is because obviously — because the season, the monsoon, this affects pumps, but part of it is also because of the fact that pumps is probably a more price sensitive segment for us and as we’ve taken pricing on inflation that’s what challenged the most, and we see that as we look at various other pump only competitors in terms of their business. However, as we are focusing on certain segments, like in this case, the submersible segments as opposed to the normal residential segment, we are seeing strong growth there. So again, we’re hopeful with some innovations we have done on pumps, specifically in terms of developing a range of products that provide greater reliability by modifying the nature of our winding, so you get less pump jams which is a key reason for failure and consumer concern. As we start moving into the season, we should have start seeing stronger performance on pumps.
Lighting, was I think your last question. Lighting, they’re really — it’s not a new story and it’s not a new plan. If I look at B2C, one of the challenges we have obviously is that we had a meaningful size conventional business. And this conventional business is declining rapidly. Like, in this quarter that declined 35%. So that is a drag. On this drag, obviously, we don’t have any plans. This is going to die, it’s now about I think about 10% — about 8%, 9% of the business still, but it’s come down from a 15% to 20% over the last 18 months.
On the LED, which is the focus, as I mentioned before, out of the three segments of bulbs, battens and panels, we are the most underdeveloped on panels. And for the last six months, we have been bringing in stronger innovation and also investment programs behind building the panels and we’re seeing the panels respond in terms of market share. And a lot of our growth is coming from the panels. Now this is very good because that’s where the market is moving in the future. It is also the highest revenue part of the market. It’s also the highest margin part of the market.
In fact, if you look at it right now, we have about a 9, 10 share in bulbs, a 9, 10 share in battens, we started six to eight months ago at about a four shaded panels that’s already moved to a six shaded panels. As step one, we need to get that also up to the 9, 10 which we are in the other segments. And the way we’ll do that is innovation, invest in advertising and invest in driving quality distribution.
Keyur Haresh Pandya — ICICI Prudential Life Insurance — Analyst
Understood, sir.
Shantanu Khosla — Managing Director
Thank you.
Operator
The next question is from the line of Achal from JM Financial. Please go ahead.
Achal Lohade — JM Financial — Analyst
Yeah. Thank you for the opportunity. Just couple of them. One is, with respect to — one is with respect to the lighting business you just elaborated on that. Can you help us understand earlier we did talk about the project business was driving growth earlier — can you help us what was the mix in terms of this project and the retail or non-project business in this quarter and say two year ago?
And B, in terms of the conventional business, while other companies are already down to sub 5%, what is driving the slower decline in case of conventional business given the cost reductions in the LED we have seen in last whatever, four, five years?
Yeshwant Rege — Vice President Strategy and Financial Planning
Yeah. Achal, Yeshwant here. So, I will — first part of your question was on the project. I think you referred more to EESL, so now EESL obviously business has tapered down to zero levels, and two years back this business used to be approximately 10% of our overall lighting business. And so, that is kind of now going out — even out of the base which is year-on-year, slowly. So in coming quarters, you’ll obviously not have EESL in the base as well.
Second part of your question was on?
Achal Lohade — JM Financial — Analyst
Conventional.
Yeshwant Rege — Vice President Strategy and Financial Planning
Conventional. So, yes, it has been steadily declining. This business as we mentioned earlier used to be in salience low-double-digit. It is now at about 8% of our total lighting business, obviously, bulk of it is incandescent bulks which still continue to in terms of the economics not replace the — not get replaced by LED bulbs and also with respect to voltage levels in different parts of the country. And there are some — in terms of the B2B side, where specifications are for the conventional product, which will also gradually move away. So, I think it’s only matter of next few quarters, but we are not far away from that 5%, 6%, we are at 8% now of conventional business.
Shantanu Khosla — Managing Director
We are doing and we have been doing nothing for quite some time in terms of trying drive conventional.
Achal Lohade — JM Financial — Analyst
Understood. And just one more question I had was, with respect to the cost reduction, what is the extent of cost reduction? And how much price reduction — effective price reduction through schemes discounts till now is passed on — I mean, when I say till now, it is till today so to say. Is it 3%, 4%, 5%? Have we seen the prices getting passed on?
Shantanu Khosla — Managing Director
We have continued to drive cost reduction as we always do with the same objective of generating about a 0.5 odd savings every year. And then deploying the savings in whatever is the best way for the business. We have not done any significant rollback of price, we took price up to cover for the inflation. Obviously, the pricing was less than the inflation because the balance was covered by cost reduction. In this current quarter, we did a little bit of to stay competitive in some SKUs and some areas, we did some tactical temporary price reductions, but there was no significant price roll-back. Those temporary price reductions were call it 1.5 points to 2 points, right? But there were purely temporary, purely tactical that to ensure there to ensure that competition does not get ahead of us in any area. We have not seen a situation right now because after all, commodity prices are not really come down to anywhere near where they were, it’s better way to think about it is, they have stabilized.
So we, don’t see any price increases in the future, but unless, there except the first whether it BEE driven changes, but unless there’s some really new significant trend in commodities. Which frankly, to be honest, we are not forecasting in the immediate few quarters, we don’t see any fundamental rollbacks in pricing.
Achal Lohade — JM Financial — Analyst
Got it. Thank you so much.
Operator
Thank you. The next question is from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Yes. Thank you. Couple of questions. First is on the data point. Could you help us with the growth rate in this quarter as well as first-half for fans, pumps? Second is, when we look at the related party section, the top management compensation has seen a significant increase and it now almost 30% of total employee and 20% of the EBITDA. When we look at your peers, I mean, our revenues in the conventional business, which is like-for-like is down versus high-teens growth for others. So, if you could just help us what explains the increase in the compensation for top management? These are my two questions.
Shantanu Khosla — Managing Director
I’m not sure, I got your second question because there has been no significant change. And as you said related party, so was that linked to Butterfly related-party and executive compensation there?
Bhavin Vithlani — SBI Mutual Fund — Analyst
No, this is pertaining to the compensation for MD and CEO and CFO.
Shantanu Khosla — Managing Director
Okay. I can — again we can check, but here’s what I think it is, right? It is the fact that — let me take me, for example. I know it’s probably the same story for Mathew and Sandeep. I exercise a certain amount the my options in the previous period, okay? Because they were going to — some of them are going to last. Now in the period when you exercise your option, the gain I get as an individual is added to my compensation. So, it showed up as my compensation and obviously then I have to pay the income of tax on it etc, but that’s my personal compensation and personal tax. As far as the company goes, the company is charging off and has been charging off every quarter for the last seven years, the cost of the [Indecipherable] program. So there’s no incremental cost to the company. Just let me call it seven years of built up compensation, I just happened to be taking by exercising right now. My options — So in my personal compensation which is also obviously reported as MD compensation that shows up. So that’s why the reason it has got no impact on the company P&L. If I had happened to exercise my option in uniform buckets every year then just compensation was about split-up over seven years, okay? I believe that that’s the only thing that we could be talking about, but you can have a separate conversation after this with Yeshwant, to confirm.
Now, your first question was the data on Fans, so what it?
Yeshwant Rege — Vice President Strategy and Financial Planning
So as far as H1 is concerned, fans growth towards 22% H1, pumps were about 16%, appliances around 38%, 39%, ECD is 23%, lighting is 21%, and overall Crompton is 23% H1.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Sir, quarter please?
Yeshwant Rege — Vice President Strategy and Financial Planning
Obviously, quarter, fan declined mid-single-digit, pumps were flattish, appliances we already called out 12%. And lighting is — LED lighting is flat and conventional lighting has declined 35%, so combined is about minus 5%, 6%.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Thank you so much.
Operator
Thank you. The next question is from the line of Sonali Salgoankar from Jefferies. Please go ahead.
Sonali Salgoankar — Jefferies. — Analyst
Sir, thank you for the opportunity. Sir, I have two questions. First question directed to Mr. Sriram. Could you help us understand qualitatively what are the synergies and what are the steps that we’re taking for integrating Butterfly that Crompton in terms of revenue synergies, cost synergies as well as in-house production which is outsourcing? And my second question is, if you could help us understand the segment-wise market share across the key segments, where we are right now and where we were about two to three years back? And within fans, we would appreciate if you could also give the market share of premium fans. And lastly, just one more what are the cost savings for Unnati this quarter? And what is our target for full-year? That’s it from my side.
Shantanu Khosla — Managing Director
Sriram, you want to take the first question?
Rangarajan Sriram — Managing Director
Yes.
Shantanu Khosla — Managing Director
So before you do that, if you don’t mind, the specific data questions, which you asked, if after this call you just connect with Yeshwant, he’ll give it that might be quicker and easier.
Yeshwant Rege — Vice President Strategy and Financial Planning
I will connect offline.
Shantanu Khosla — Managing Director
Okay? And Sriram, if you can talk about Buttefly.
Rangarajan Sriram — Managing Director
Sure. On the synergy part, just to remind, its just second quarter that we have past and our objective first is just to make sure we had a smooth transition and then run the business so that there is a stability in the organization. But in the period, we also jot out a plan and then how are we actually going to integrate and using what the Crompton is where is etc. But what we have done in the last two quarters is, wherever that we see a immediate opportunity in terms of say procurement, we actually started getting help of Crompton in terms of synergies for buying raw material and commodity procurement. And even in the design wherever that help required and innovation we have started utilizing. As of now, it’s more from a back-end point of view just to strengthen the entry of Butterfly organization that we are now working with, the Butterfly and then use their capabilities. In the meantime, we also built capabilities within Butterfly system as well, because in the previous the promoters era, it used to be all the promoters used to handle it, now each of the functions also been identified and then capability has already been built in so far. So that’s we progress. And then going forward, we are actually going to work on how do we going to expand even in a go to market where we can use in Crompton now that’s another approach which we are going to go forward in Q3 and Q4.
Sonali Salgoankar — Jefferies. — Analyst
Got it. And what about manufacturing?
Rangarajan Sriram — Managing Director
We still[Phonetic] Butterfly has been manufacturing. So far 80% of our revenue is actually on the product which has been manufactured. Like I said, we have now — have a person with managing the manufacturing within, so we are now, right now working on a couple of consultants to make sure build the same kind of our compliance and also the governance and as well the capabilities what we have done in Crompton in terms of improving quality or also in terms of the productivity. First step is just understand where we are right now and with which we’re engaging. And third, we are also working on a long-term objective of how do we now working on even the capacity just for acquiring for the couple of years as well. So as of now we are using the current capabilities within Butterfly.
Shantanu Khosla — Managing Director
Also, last thing on that Sonali, we are also obviously where there’s low-hanging fruit in terms of potential synergies, we are actively exploring them. And we will take the appropriate decisions as we move forward. I mean, simple example. Today, we have manufacturing capacity for mixers in the Butterfly organization, Crompton on the other hand is getting various vendors to manufacturers mixer. So it could well be low-hanging fruit to may — Crompton — have Butterfly be the vendor who makes Crompton mixers. So, we are evaluating all these kind of low-hanging fruits and they are at that low-hanging fruit also as we develop the long-term plans.
Sonali Salgoankar — Jefferies. — Analyst
And are we progressing well on our cross-selling initiatives for the revenue synergies?
Shantanu Khosla — Managing Director
Right now as Sriram said, we are first working much more on the organization in the back-end, because there are clear synergies there which could be low-hanging fruit. Brand 10 synergies, not just cross-selling, but importantly, how do we use the combined capability of the go to markets of the to organizations to get greater success in Butterfly weak areas, such as the North etc, sequentially, we have come out for that.
Sonali Salgoankar — Jefferies. — Analyst
Got it, sir. Sir, lastly on Unnati saving please, for the quarter and for the year. Thank you.
Shantanu Khosla — Managing Director
That also I think if you speak to Yeshwant, he will give you that also.
Sonali Salgoankar — Jefferies. — Analyst
Sure, sir. Thank you.
Operator
Thank you. The next question is from the line of Charanjit Singh from DSP Mutual Fund. Please go ahead.
Charanjit Singh — DSP Mutual Fund — Analyst
Yeah. Hello, sir. Thanks for the opportunity. Sir, first is on the lighting side, you touched about on the competition getting more aggressive, so this is either imports or domestic if you can give more insights on to that. And conventional lighting as a percentage of the market overall market now what is the percentage? Because that market had been significantly shrinking, but we are still highlighting as a percentage maybe 10% is there for us as a business. So when do you see that reducing to zero level? And the next question is in terms of fans as the rating change stabilizes, do you think that larger players like Crompton have an edge to gain further market share maybe in the economy segment? Yeah, those are the two questions from my side.
Shantanu Khosla — Managing Director
Yeah. Let me take the second one first. As a market leader, a technology change is definitely an opportunity for us. I think as you importantly said — pointed out, especially in the mid and lower mid-end, because BEE is about much more than just the BLDC, which tends to be by its very nature at the premium end. So BLDC will give you the five star rating. But a large percentage of the actual market will remain in one, two, three and four star rating. And the ability to develop modified induction motors at appropriate cost which can meet those rating regulations is a critical opportunity. Because as you can imagine, x percent price increase, to someone who’s buying a INR3,000 fan, right? Is easier than the same x percent price increase to someone who’s buying a INR1,500 fan, right? So it’s clearly an opportunity for us to both grow our business at the top end as five star delivered by BLDC technology becomes bigger. But also very correctly as you pointed out, to win in the mid and the mind-low-end, with superior better cost induction motors which deliver the star rating and that’s what we have been spending a lot of time focusing on in terms of our change over.
The first part of the question was?
Aniruddha Joshi — ICICI Securities — Analyst
Conventional lighting
Shantanu Khosla — Managing Director
Conventional lighting. See, conventional lighting, I think someone mentioned that in some companies it has been at 5%. In — for us, we’re not a million miles away from that, we’re declining a 35% for every quarter. When will it end? In my personal opinion, somewhere between around three, because typically how these as Yeshwant clearly pointed out, the fact of the matter is that there are some people who can only afford INR10 and they need a light immediately. So, there will always be some demand, but the kind of been inconsequential demand. I don’t see it becoming zero. From a consumer point of view, unless for whatever reason all manufacturers stopped supply. So somewhere I would guess at around three.
Charanjit Singh — DSP Mutual Fund — Analyst
And sir, on the LED side you had talked about the rising competition and said been scenario earlier also which we had seen in the lighting space, so is this that existing players itself have become aggressive or is it more of imports, how do we read into this?
Shantanu Khosla — Managing Director
It’s a — what’s happening is that if you look at the three stretch months. The existing players [Technical Issues] we had — let me call it three years ago where everyone was importing and bringing in and launching. I think a lot of those players have moved out of the market. What is happening is really in the bulb segment, the market has become very commoditized. And it’s really is price driven. So that’s why you’re seeing all the competitiveness. The real business and the real brand building is in winning in the final.
Charanjit Singh — DSP Mutual Fund — Analyst
Yeah. Thank you, sir. That’s all from my side.
Operator
Ladies and gentlemen as that was the last question that the management could answer today, I would now like to hand the conference over to the management for closing comments.
Shantanu Khosla — Managing Director
Okay. Again, as always thank you very much. I hope we were able to address your needs. As always, if we could not make the time to get to all of your questions, please feel free to call us up, we’re more than happy to spend time. Our objective in these calls is always to help you all better understand how we are thinking about our business, right? So, thank you all very much. I wish you all the very best for — Happy New Year. Thank you.
Rangarajan Sriram — Managing Director
Thank you.
Aniruddha Joshi — ICICI Securities — Analyst
Thank you.
Operator
[Operator Closing Remarks]