Crompton Greaves Consumer Electricals Limited (NSE: CROMPTON) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Promeet Ghosh — Managing Director and Chief Executive Officer
Kaleeswaran Arunachalam — Group Chief Financial Officer and Head of Strategy
Swetha Sagar — Chief Business Officer, Butterfly Gandhimathi Appliances Ltd.
Analysts:
Kunal Sheth — Analyst
Aniruddha Joshi — Analyst
Manoj Gori — Analyst
Aditya Bhartia — Analyst
Naushad Chaudhary — Analyst
Umang Mehta — Analyst
Bhoomika Nair — Analyst
Natasha Jain — Analyst
Presentation:
Kunal Sheth — Analyst
Yeah, I — good evening ladies and gentlemen, and welcome to the Crompton Grieves Consumer Electrical Limited Q3 FY ’25 Earnings Call.
Today, we have with us from the management of Crompton Grieves Consumer Electrical, Mr Promeet Ghosh, Managing Director and Chief Executive Officer; Mr Kalish Varan Aruna Chalam, Chief Financial Officer; Ms Shretta Sagar, Chief Business Officer, Butterfly Gandhimati Appliances Limited; and Ms Nata, Head, Investor Relations.
Thank you for giving us this opportunity. And sir, may I request you to give us some opening remarks, post which we will open the floor for Q&A session. And for the Q&A session, may I please request participants who want to ask questions use the handraise feature. And when your name is announced, we will unmute and you can go-ahead and ask your question. Thank you, sir. Over to you, sir.
Promeet Ghosh — Managing Director and Chief Executive Officer
Thanks. Thank you, everyone. And welcome virtually to the new Crompton office as you have okay welcome to the new Crompton office virtually hopefully we’ll be able to welcome you here physically in the not-so-distant future. Yeah. And with that, you’ve already been introduced to Kali, and Natasha, as you already know them quite well. I will jump straight into my opening remarks on the performance this quarter.
Before I get into the performance of this quarter, I also want to tell you that as you are aware, we embarked on Crompton 2.0 about 18 months ago. And while we have periodically communicated that there is various activities and actions that we are taking as a part of Crompton 2.0, what we are beginning to do from this quarter is to start to bring you in — give you a sneak peak, if you will about what those activities are actually resulting in and what differences those are making to the business and hopefully those will be of interest to you as well. Some of this actually we are also going to do a public launch on. So — but I’ll come to all of that in a short while.
So firstly, let’s quickly talk about the performance and results. On the standalone performance, I’ll remind you that in the backdrop that we are currently operating in, consumer sentiment has been subdued and during this period, we have been very focused on sustainably and consistently enhancing both our revenue growth as well as our absolute profit trajectory. This is not — this should not be a new, this is something that from time-to-time I have talked about, but this is clearly coming through this quarter as well.
As demonstrated, we have — we are taking a comprehensive approach to managing operations, remaining disciplined and mindful of strategic decisions as well as tactically exploiting market opportunities while being firmly committed to our long-term goals. But this quarter, I’m happy to share that Crompton continues to deliver robust growth. Revenue growth remained steady, complemented by margin expansion and higher-growth in profits.
The company recorded a standalone revenue of INR5,150 crores in — for the quarter — for the year ended December 2024, which is an increase of 12.5% year-on-year. EBIT for the Nine-Month period surged 23% and overall for this period, the — there was a margin expansion of 9.9%. In Q3 alone, revenue grew by 6% and EBIT grew by 15% Y-o-Y with a margin of 9.7%, 7%, up 70 basis-points. In this period, ECED margins improved by 160 basis-points on the back of in a very — in a quarter like I said earlier, where there has been subdued the demand, very disciplined pricing, keeping in view our long-term objectives as well as very focused actions on pricing on cost optimization. Insofar as lighting is concerned, there too, excluding EBIT — excluding a stepped-up A&B spend, our margins expanded by 1.5%. And after factoring expanded the A&P spend, our margins remained flat.
Now let me get into each segment that we operate in, fans, a business in which we are market leaders by some distance. Despite the off-season, the business recorded a mid-single-digit growth led by TPW fans, efforts to expand placements across 500 plus key retailers continued and calibrated pricing actions were implemented in key premium models. To strengthen their position, new products focusing on aesthetics, style were introduced such as, Cairo and Festo. With the summer season approaching, the focus remains on accelerating premiumization and deepening channel partner engagement.
In essence, our emphasis has been a lot on building the enablers for the business in what has been an off-season quarter. In pumps, we grew 19% Y-o-Y, which was driven again by successful execution and ramp-up in our solar pump business. We continue to innovate and also launch products such as SWJ Dura, Wind Dura with enhanced performance and durability to strengthen our portfolio. I might add that both — in both these launches, we have been met with good success. In the appliances business, which as you know, comprises two-parts, the LDA and SDA.
We have seen strong momentum, both in small domestic appliances as well as in air coolers. While air coolers achieved and this is an off-season for air coolers, we have achieved in the air coolers, the highest-ever pre-season growth while demand for water heaters was impacted because some of the sales are of because of regulatory reasons as you are aware were prepawn in the previous quarter which also and to an extent also impacted by a delayed onset of winter. Mixer grinders sold 46% during this quarter Y-o-Y, fueled by robust demand and the successful introduction of higher voltage mixers, grinders and also nutrie blenders.
Now I have said this before, I want to emphasize to you again that we find that combining Butterfly and Crompton by numbers, we are already, we believe, the largest mixer grinder company in the country. That is no mean feat and it is to our kitchen appliances business, both in butterfly as well as STA where we managed to hit this mark. Especially in — in our businesses where leadership makes a difference, right? And so — and large kitchen appliances reported a revenue of about INR14 crores and we’ve there been in the journey of consistently reducing EBITDA losses and that’s been the trajectory here. That’s a business that we continue to invest in. Overall, in ECD, we witnessed steady performance across key segments along with continued investments in premiumization, innovation and GTM expansion.
Now I will shortly talk about it and give you a little bit of a glimpse of what these are translating into, into but more of that later. While external challenges affected some categories, strategic initiatives remain on-track to drive long-term sustainable growth. Turning to our lighting business. We remain focused on reviving its growth trajectory and I think you are consistently seeing a improving trend, a very discernible improving trend in our lighting business. This quarter, we — our growth accelerated to 3% Y-o-Y, up from about 1% Y-o-Y to Q3 FY 2024, right? Growth, this we believe is industry-leading growth, especially in the context of the price erosion that this business continues to see.
You will — you particularly are the growth numbers, we don’t disclose exactly the growth numbers. If you carve-out the fact that these numbers are on the back of CFL numbers which are in the base. The growth would be materially higher and that also gives us comfort that we are doing very well in this industry, not only on growth, but also on profitability. B2C growth was primarily driven by batons, outdoor and accessories. Additionally, the expansion of our product range contributed to a higher share of revenue from new launches. I’ve said before, because of our focus on panels, panels is now the largest, single largest segment in our B2C portfolio, which is an important change given both the speed at which that business is growing and the margins that business has.
In B2C — B2B, we saw strong growth in LED, industrial and commercial categories. We’ve historically been strong in street lighting. What you’re now seeing is industrial and commercial revenue streams also ramp-up and start to contribute to the B2B growth. Notably, we have secured a large number of orders despite a slowdown in tendering and partially that’s been impacted as you are aware with the election cycles in various parts of the country. It’s worth-mentioning, as I’ve already said now that despite materially stepped-up in expense, lighting profitability remains intact.
Now I told you earlier that I’d give you a sneak peek into the Crompton 2.0 outcomes. From time-to-time, we will do this and give you a glimpse. In particular, I want to alert you. We could not talk about it before, but there is going to be a public launch very soon of strides that we’ve made in innovation in fans. You will appreciate that I can’t tell you much more just now, but just wait about a week or week and a half and we’ll give you the full details. But we’ve been talking time and again about the investments that we’ve been making in innovation and time has come for us to reveal that we have now developed both fully indigenously the next-generation platform for BLDC as well as the next-generation platform for induction fans.
Now it is our expectation that for next several years, these platforms will drive a several product launches are not only over the next several years, but you will probably see a state of product launches to bolster our position in the very near-future as well, just ahead of the coming season. And so I’ll — I’ll leave it at that.
You know some of the things that have also already happened, those I can tell you and this should give you a sense of what’s coming. We have already launched India’s first high-speed 5-star induction fan which is the HS Duro which uses some of the technologies that we’ve been developing for a while and now you’ll see the next — the next level of it.
We’ve also launched insofar as energy efficiency is concerned, the number-one energy-efficient appliance, water heater appliance previously Arno being awarded by the President of India and also keeping in view, the increasing demand — consumer demand for products which have both the felicity of having a remote in-hand, which is mobile, but also having a regulator because you can lose the remote and it’s not as easy as it might seem technically, we have launched a regmote previously for our energy on groove. Now that’s something again that we will continue to build-on.
Just to give you — just to remind you that this is — you’ve already seen the cost of this being incurred so you know, from 2021 when our R&D spend used to be about 0.5% of revenue, they’ve stepped-up to 1.5% last year. You will continue to see a similar trajectory in FY ’25. Obviously, we disclose these only on an annual basis. But just to give you a sense of the amount of effort that’s going into this rank, we’ve also by the way increased or since 2021 the size of our team by 3x, right?
Now the other sneak peek I’ve shared from time-to-time that we are focused on embedding digitization in our operations. Our digital portal for dealers has now been running for some months. I am delighted to say that has substantively changed, significantly changed the kind of with which we are able to settle our schemes with our dealers, also of course to keep them informed also to digitally monitor our schemes, all of which now have been put into a one single digital platform. So there’s the — we are already beginning to see a quite a different quite improvement in the channel partner experience. Needless to say, this is early days and you will further see improvements on this, but I’m quite happy to tell you about some of the changes that have already happened.
Another area of embedding digitization is actually after-sales service. We have about a few weeks ago we’ve now started a process of real-time monitoring of consumer service, their satisfaction levels, addressing their concerns. You know within a few weeks, the number of calls that we’ve addressed is already up to about 50,000, 55,000 calls that we’ve addressed and we are rapidly increasing this. You will be reminded that this is a Crompton has been in this business not only as a leader, but has been a leader for very, many years. We’ve been in this business for 85 years. And this is one of the connects that we have with our — with our consumers, which is a massive benefit in terms of an established base.
So Europe, we expect that we will continue to ramp this up. I’ll remind you that we address something like 35 lakh customer calls every year and you know, as we go-forward and digitize their experience that also enable us, that’s only one year, right? As we go-forward, that will enable us to leverage that massive scale better, right?
Okay, very few quick words on the budget. You know the solid law. I was asked to make a few points about what we thought of the budget, not really for me to say, but very quick point long-term approach that the government continues to demonstrate, there’s capex orientation as well as pragmatism and flexibility. And we do believe that many of the measures that the government, particularly the tax measures the government has taken will help in lifting the for the consumer sentiment, which as we said earlier, was we’ve seen that being a little bit — or subdued, so very timely. And we do hope and believe that this will add substantively to the disposable incomes of people and therefore most spends, particularly in the durable goods segment which tends to be a discretionary segment very often and therefore are materially helped by increased disposable incomes.
Lastly, I want to just flag a few things. As you know, and you would have seen earlier when we are coming up with the next-generation of energy-efficient fans, we are working very closely with me on driving responsible behavior and be a part of the company on significantly stepping up our ESG efforts. And we have — we are now ranked. I’m delighted to say we are now ranked number four globally amongst consumer electricals companies, number four globally by DJSI on ESG on ESG parameters, our ESG score has improved materially as now at 62, come up from about…
Kaleeswaran Arunachalam — Group Chief Financial Officer and Head of Strategy
34.
Promeet Ghosh — Managing Director and Chief Executive Officer
34 last year and before that.
Kaleeswaran Arunachalam — Group Chief Financial Officer and Head of Strategy
9.
Promeet Ghosh — Managing Director and Chief Executive Officer
Yeah. So in two years, years our ESG score, guys, what happened? Okay. On ESG score in two years alone on DJSI, our score has gone from nine to 62. We’ve also been recognized by S&P and their yearbook, ESG yearbook has just come out and we are ranked, I believe, third in the in our category by S&P Global right moving on to butterfly performance and Shreta here with me as you know has been hard at-work and we are seeing some green shoots there in-line what we’ve been griding the market at. There’s — again, the efforts that we’ve been making and getting at setting the — resetting the terms of trade, the pricing, the channel mix, etc., et-cetera are you the efforts are visible, the green shoots are there.
So the revenue decline in the butterfly has now been more or less arrested this quarter and there has been a significant improvement in EBIT — EBITDA margin by about 600 points and this is a result of many of the things that we’ve talked about, so EBITDA margin is down at about 7.2% and there is also — this has been driven both by gross margin expansion and calibrated actions on pricing and product mix.
With that, I will pause and we’ll take questions.
Questions and Answers:
Kunal Sheth
Thank you so much, sir. Participants who wish to ask questions, please use the handraise feature. And when your name is announced, you know we will ask to unmute and you can unmute and go-ahead and ask your questions. The first question is from Aniruddha Joshi. Aniruddha? Yeah. Go-ahead.
Aniruddha Joshi
Sorry. Yeah. Yeah, thanks. Thanks for the opportunity. Anird from ICICI Securities here. Sir, on Butterfly, we have seen a super recovery in the business. So what are the two, three things that are working because we have seen other kitchen appliances companies reporting quite muted set of numbers in South India. So what has really worked for us and should we expect that going ahead, this should be a — in a way the recovery should continue in coming quarters also? That is question number-one now.
Secondly, you indicated TPW fans are doing well. So what will be the contribution as of now and how it has changed over, let’s say, past two, three years and how we should see it changing over next two to three years also? And last question from my side. We have seen a MFI channel has seen massive weakness and it is also highlighted by some of the players. So what is current contribution of Crompton from that channel? And how do we see any impact on that for the company?
Promeet Ghosh
Yeah. Thanks. On, you know, guys, if you guys don’t mind, I’ll request people to keep their questions to one, maximum two as the — and euros, just so that we give everybody a chance. And very quickly, MFI, I’ll start with the last one first because that’s the easiest. The MFI channel indeed has been very — and you know, it is quite small currently because it’s fallen quite a bit. It’s only recently, I’d say that we are seeing some initial signs that MFI demand might be recovery, but it’s quite — it’s quite small and has fallen quite a bit from the numbers earlier. And you are all aware of why that happened. It’s also rural itself, the demand has not been very strong, but this in particular has been quite weak. Insofar as maybe we disclose TBW shares.
Kaleeswaran Arunachalam
We don’t disclosure.
Promeet Ghosh
Yeah. So Anirud, what I can tell you is, you know TPW, as you have rightly noted, TPW, the demand has been robust. It has been robust for us over the last at least four quarters and has been faster than ceiling fans is my take. It — it is my expectation that this segment will continue to grow very well.
Now remember one thing and I keep getting thrown this number that ceiling fans, there is very-high penetration. So ceiling fans, there is high penetration. But the demand for ceiling fans, I hope after some of this recent weakness goes away is going to get driven by a few things. One, the replacement cycle for ceiling fans is getting short, right. Insofar as TPWO is concerned, the penetration is very low, right? Very low. And as you know, we get warmer summers and warmer winters even and sometimes delayed winters. This is a business that we expect a strong growth in. So that’s what I’d say.
Insofar as Butterfly is concerned, absolutely, our expectation is that the trajectory in Butterfly will continue. You know, I can’t say we are — we are we are there yet. And maybe Shutha, you want to quickly talk through a few of the things that have happened, which distinguish you from how the rest of the business is concerned. But I didn’t want to say this, look what we said before about Butterfly is that we want to go back and reset and strengthen the fundamentals, right? And that’s the — that’s the trajectory that we’ve been on. Some of the — some of the benefits of this, you will see last quarter and I’m quite sure that these continue to come. But yeah.
Swetha Sagar
Just the top three things like one from me, just summarizing it. I think the first thing, I think it’s channel parity, looking at channel parity is one of the key things that helped us to stay where we are. The second thing is focusing on core, when we say core both from a category and a market point-of-view, I think we had strong focus in terms of getting our core right. And the third one is optimized resourcing. Wherever it was required, we resource the system and we resource the system from a consumer point-of-view. So those are fundamentally the three things that we continue to work on and I think the results are getting to shoot right now.
Promeet Ghosh
But still very much work-in progress. I want to say. Okay. All right. Next, thank you.
Kunal Sheth
We have next question from Manoj Guri. Manuj, please unmute and ask your question.
Manoj Gori
Thanks. Good evening, everyone. Manoj Gurier from Equirus Securities. So I have two questions. One, if I look at recently, one of the peers has indicated that B2B lighting is likely or probably going through some price erosion. How do you see this and what’s your understanding on this? And second, you highlighted about strong inventory buildup for air coolers for upcoming summer. How are we seeing channel inventory for a for fans in the initial months and what’s your industry outlook for CY ’25 growth for fans versus CY ’24 volumes and this is for the industry.
Promeet Ghosh
Yeah last quarter we do B2B lighting. Yeah. B2B lighting, yes, the outlook has been tepping and the order flow has been reflecting the — that. From our perspective, what we have been doing is that we have been expanding the areas that we’ve been playing in, in B2B to help us get past this. As you know, we have strong positions in certain segments, particularly street lighting. This is the reason I told you earlier that we’ve expanded our position also in commercial as well as industrial. So the — yeah, so it’s been a competitive segment in the last few months. I have to say that we are optimistic that there is going to be improvement in this segment as we go-forward as some of the initial signs of that are there.
Manoj Gori
Sir, my question was more on the price erosion side. Are we seeing any price erosion into B2B lighting?
Kaleeswaran Arunachalam
I think, Manoj, B2B lighting is a tender dependent business. So it is about for participating in the tender, how do you get yourself equipped in up. And from our perspective, we have a unit economics that we have been stating in the past. While the price is led by what is the base price that the competition wants to quote, whether they want to take a margin erosion or not is very different. It will be difficult for us to comment on what is the strategy that others have been following.
From our perspective, we have a base margin with which we want to operate. And if that is going to give us scale and operating leverage, we can look at bring that down. So that’s how we are looking at B2B lighting in terms of pricing because as you know, that’s a tender-driven business. Now in terms of B2C, that’s a price erosion that has been continuing. But as you could see, our performance continues to be very strong. Probably the industry-leading growth for second consecutive quarter is what we are seeing in B2C lighting.
Manoj Gori
Right.
Promeet Ghosh
Yeah, quickly, I’m just moving on, guys, so we don’t keep going back-and-forth. Just to make clear, guys, B2B businesses, since there are no standard products, it’s tough to talk about pricing. There’s margins, but pricing is — pricing is a relative concept and we’ve told you how we are dealing with our margins. In so-far as air coolers are concerned, you know, I think there’s like we already said, clearly, our people are beginning to see Crompton as being important player in-the-water — in the air coolers segment and that is I think the reason that it’s translating into strong demand for us. And particularly in a product where you know up until quite recently, we didn’t — we didn’t have any position at all.
It’s quite — and you remember that last year when there was quite a warm summer, we disclosed that we were not able to, in fact supply are to took all the demand that got generated and that’s one of the reasons that I think the channel is also open to buying from us earlier and we are also getting ready earlier in the cycle. Insofar as the fans business is concerned, yes, we are optimistic that with a bunch of — with budget, with a even last year, as you remember, the first-quarter was quite warm. So it depends a little bit on how a warm the coming months are, but we do believe that there will be reasonable strength in the fans market going-forward.
Manoj Gori
Sure, sir. Thank you, sir, and wish you all the best. Thanks.
Promeet Ghosh
Thank you.
Kunal Sheth
Thank you, Manov. The next question is from Aditya. Aditya, please go-ahead and unmute and ask your question.
Aditya Bhartia
Hi, good evening, sir. Sir, my first question is on the pumps business, wherein we continue to see fairly strong growth. Just want to understand how much of that is driven by agri pumps and what proportion of pumps revenues would be coming from agri pumps now?
Kaleeswaran Arunachalam
Yeah. So Aditya, we don’t disclose segment-wise business of resi, Agri and other segments. But I just want to give you a broad print in terms of how our pumps plus solar is behaving. Our pumps portfolio, non-solar is growing at the industry pace and probably in residential, we believe we are marginally gaining share also. Solar, I think as we speak, we have already executed INR200 crores of business cumulative from last year to now. We started late last year and up to now INR200 crores has been executed. We see the prospects to be very positive on this as we look at the future also. As we cross each quarter, we’ll keep updating as to how is that moving and how is the pipeline coming through. But that seems to be pretty exciting in terms of where it is.
Aditya Bhartia
Sure, sir. And in terms of pricing that we see in solar agri pumps, the pricing is not a concern. We get to have decent margins in that segment.
Kaleeswaran Arunachalam
Yeah, neither the pricing nor the margin is a concern in this business.
Aditya Bhartia
Sure. And this particular quarter, we saw other income reducing a little versus, let’s say, last quarter, so what would be the reason for that?
Kaleeswaran Arunachalam
So you may have to see this along with finance cost. As you look at last year, we had a debt in the books for the Butterfly acquisition that happened. As of now, the debt has been passed down. So we have only INR300 crores of left — debt left. So cash has been used to pay-off the debt and that’s why you see the reduction in finance cost and reduction in other income also.
Aditya Bhartia
Perfect. That’s helpful. Thank you so much.
Kunal Sheth
Thank you, Adity. We have the next question from Naushan., please go-ahead, unmute and ask your question.
Naushad Chaudhary
Yeah, hope I’m audible. First, on the lighting in butterfly business, if I look at these two piece of businesses, lighting, we have been working on the R&D, shifting the portfolio, exiting few conventional products and same was the case in butterfly, we were correcting fundamentals from last two years. For both the businesses, do you think the fundamental corrections or portfolio corrections, which was required as over now and from here onwards, should we expect growth from these two businesses? And if yes, what kind of growth one should expect from both the businesses?
Kaleeswaran Arunachalam
Now, we don’t give future outlook of growth. As you know, we don’t make forward-looking statements. But having said that, let me start with lighting. I think the promise that we made on lighting is, first, we will RS decline and we will grow. As we speak, we do believe we are probably growing at an industry-leading rate in B2C. So already whatever fundamental corrections that we need to take-in lighting business has been completed and business is moving in-line with the category performance or ahead of the category performance. This also keeping in mind, the margin has been improving. So it is not that you’re leading or growing at the industry pace. You have kept the margin profile also intact, if not improving, apart from investing on the brand towards the marketing spends that we have talked about earlier.
Now as of Butterfly is concerned, what we said is there would be decline in H1 and we would arrest the decline in Q3 and start growing from Q4. So it is still work-in progress, but the trajectory is moving in-line with what we said. We’ve already demonstrated this in lighting. We expect the same to come through in Butterfly also.
Promeet Ghosh
So actually, maybe I’ll tell them something that we hinted at publicly earlier some benefits that you’re seeing come through and will continue to come through in the future are not only at the front-end, but also in the back-end. Now over the last two quarters, we have consolidated manufacturing operations, both at Crompter as well as at Butterfly. So four manufacturing plants have been consolidated into two larger ones with not only improved cost metrics, but also enhanced our production capacity.
So for instance, you may have gauged this what’s going on behind the scenes of when we announced that we had increased our production capacity at Bandi by about 50% and also increased our backward integration there and that’s all of this we have manufacturing facilities for lighting, for fans, et-cetera, some of them are being consolidated. So and in some — what used to be produced earlier is now a different product is being produced depending on what it — what we can cost-effectively produce. So, I mean, needless to say, there is stuff that’s happening in the front-end as well as in the back-end.
Naushad Chaudhary
Interesting sense so for this initiatives…
Kaleeswaran Arunachalam
Now allow us to pass this through the other questions because people are on queue, if you could come back.
Naushad Chaudhary
Sure. I’ll come back-in the queue.
Kunal Sheth
Thanks. We have the next question from Mumang Mehta. Umang, please go-ahead and ask your question.
Umang Mehta
Hey, thanks for the opportunity. Just on fans, last quarter, you had highlighted that some competitors were holding back on pricing. Just wanted to know if there’s any update on how the competitive situation is in France.
Promeet Ghosh
And okay, maybe talk about myself, right? And then you can look we are in the business of being disciplined in the markets, right? And you can see that come through consistently, it’s — we do believe that is the trick to being to gaining market-share and are doing well on profitability, right? Yes, it’s true that some of our competitors haven’t been as disciplined as we have been and I think you can also see that is showing in their margins, right?
Now, particularly in the non-seasonal quarter, I can understand that there has been some pressure somewhere to be able to shore up volumes. We are not in that game. We much rather be consistent and instead focusing on strengthening our business, we’ve actually, by the way, I mentioned this Lisa in my opening remarks, continue to invest heavily in enabling our front-end, right, in terms of our POS displays. You will see that this come through the investments that we’ve made in innovation, you will see what that’s doing to the fairly material launches ahead of the next quarter, you know, working through the next-generation of technology platforms.
So yeah, we — I never won’t like to talk poorly of our competitors, but I can tell you this is what we are doing, invest in the business, right, be very focused on ensuring that you continue to drive cost optimization, do what you’re doing better right. And that is what is going to hold us instead going-forward.
Umang Mehta
Sure, sir. Sorry, I was not able to unmute. Thanks. That was reassuring. Just a second question, if you could share the current order book on solar pump, if at all you are willing to share.
Kaleeswaran Arunachalam
We don’t disclose the order books. As the quarters pass by, we will let you know as to how are we progressing on solar. As we said, we see that as probably a potentially materially larger business and we are moving it for us and the book building has also been progressing.
Promeet Ghosh
We expect — continue to expect robust growth in the business. I think as far as we can go.
Umang Mehta
Got it. Thank you so much, sir and all the best. Thank you.
Kunal Sheth
Thank you,. The next question is from Bumika. Bumika, please go-ahead and ask your question.
Bhoomika Nair
Good evening, sir. Sir, just wanted to understand on Butterfly. Shreta spoke about channel parity and we’ve arrested the decline now. Going ahead, how are you seeing the growth panning out in terms of demand, market-share growth. And with the kind of optimization of resources, which you said there was consolidation in the manufacturing, do we see double-digit margins coming back into butterfly into the next year or it’s going to take much longer than that? What’s the outlook out.
Kaleeswaran Arunachalam
Again, Bubika, I think we wouldn’t be giving a forward-looking statement here. But I just want to give you a few indicators of how are we thinking and Shweta can add-in. See, fundamentally, at-scale, kitchen has been a double-digit margin business for every player. And when I say scale, I’m not talking about something very large. From where we are, potentially if we have to grow at a reasonably good rate ahead of the industry, double-digit margins do come in. But our approach to Butterfly is a calibrated step-by-step one.
We said this earlier. We said we will first get the decline to be arrested, which has been completed in Q3, get the business back to growth, get into decent single-digit margins, the negative profitability that we had last year. So all these work has been completed. As we approach into next year, we think the business is poised to take a double-digit revenue growth. At-scale, operating leverage will play-out because it’s a high operating leverage business. Anything that?
Promeet Ghosh
I just want to remind you of something that I told you earlier. We are now playing on not just the scale of butterfly, but plus butterfly. So I’ve said before that for instance, a prompton is now outsourcing some of its mixer purchases to Butterfly again. This is — so there is a broader scale statement that’s happening here and the fact that we are now the largest mixer grinder company in the country are you making a difference.
Bhoomika Nair
Sir. So the other aspect is on-demand for fans, will be getting into the summer season shortly, how are you seeing the stocking going on with dealers? You know, and how — and you also spoke about TPW where we’re looking at a strong growth. If you can just talk about how large is the market, what is our market-share out there, that would be really helpful. Thanks.
Kaleeswaran Arunachalam
Specific market-share numbers, but I can tell you the category is roughly about 25 percentage will be TBW. And maybe if you include TomX and others, it could be slightly more than that. Fans, if you look at it, we would divide this into three parts. We see premium fans growing at double-digit. We are also seeing BLDC growing at a very fast clip upwards of 20% and we do see TBW also growing in double-digit. The entry-level fans, I think the regulatory requirements coming in probably gives us an advantage considering the scale at which we operate to grow that profitably also and gain further market-share from where we are depending upon how the regulatory changes pan-out one year down the line.
So overall, from an industry perspective, we think fans category is moving in the right direction for us as a business. Internally to Crompton, I think we talked about the platform change that Promeet was hinting in earlier. There’s a lot of exciting products that are going to come in, watch out for it. Maybe in a couple of weeks, we’ll talk in detail where we will have a media release on how are we going to leverage platforms and how do we see BLDC and induction as a dual-engine platform to drive growth in fans.
Promeet Ghosh
Yeah. Thank you, Pumika.
Kunal Sheth
We have the next question from Natasha. Natasha Jain, please unmute and ask your question.
Natasha Jain
Thank you for the opportunity and congratulations on a good set of numbers. Sir, my first question is on TPW. I apologize if the question sounds very basic, but I just want to understand you mentioned that TPW has very low penetration, while that’s agreed-upon. I want to understand the rationale if somebody has a ceiling fan already in their house, why would they want to shift to a TPW what extra addition does it give that’s my first question.
Promeet Ghosh
You tell me you know why do you see a proliferation of TPWs not only in India but globally. Our TPW is a tends to be a personal fan. A ceiling fan is for a room. A TPW typically is for one person. As temperatures rise, not only people who have a ceiling fan, people who have an AC and people who have an air cooler want to enhance the cooling experience by having a PPW, right? So if you go to offices now actually in the rest of the world you will actually see right every person having a personal fan next to him on his desk right and I this is something that I assume you’re aware of even when you have an AC combining an AC with a fan significantly enhances the cooling experience right you know who’s said so we are seeing here TPWs get taken-up in offices and homes and factories and shops everywhere.
Kaleeswaran Arunachalam
But fundamentally if you look at it to what said, you also have portability that comes in TPW, so I can move between rooms. That’s much easier. Also, TPW gives you a direct flow, the personal cooling aspect that Promeet was talking about. If I need a targeted direct flow, it helps me to ensure that is something that I can have in addition to a ceiling fan that I have in the same-location. And this considering.
Promeet Ghosh
Not only ceiling fan also is outside, yes.
Kaleeswaran Arunachalam
So with the kind of global warming we see India and outside, we expect this trend to only accelerate.
Natasha Jain
Understood, sir. And my second and last question is, you mentioned that you’re coming up with a next-generation BLDC category and induction fans. Just want to understand, is there any difference between this and the one that’s already in the market? And is there any patent that we have or are the margins better than the already BLDC fans in the market.
Promeet Ghosh
Thank you and all the best. Yeah. I mean, as you might imagine, there are several interesting points that you know, we will we will disclose shortly about the improvements not only about two fans that we currently own, but also a trajectory of fans that know, we will then unveil over a period of time. These are changes, improvements in technology and all of which have been indigenously in-house developed and needless to say we have privileged technology there. And I want to emphasize this that you know we are arguably and we haven’t heard anything to the contrary.
We are arguably the largest ceiling fan company in the world. Bulk of our production of course is induction motors will continue to not only draw on the strengths that induction motors have, namely durability, namely our domestic supply-chain, namely years and years of proven experience, but also to be able to produce progressively of energy-efficient fans. So you know I’ll leave it here yes a lot of the technology that we’ve been doing is privileged.
Kunal Sheth
Thank you, sir. Thank you, Natasha. Sir, that was the last question. Thank you so much for hosting this call and giving us this opportunity to host this. Sir, any closing remarks that you’d like to make?
Promeet Ghosh
But not really. I think we’ve spoken at some length about now you know what not only how we are doing, but I do want to start this process of — and this is the first time that we are doing it. It’s also there in the presentation that we’ve uploaded. And going-forward, we do want to give people a sneak peek about outcomes that are coming out of our Crompton 2.0, which are pertain not only to revenues and profits, but also to the various enablers which go on to generating not only revenues and profits today, but in the future.
And needless to say, as you have any further questions, you know, please feel free-to reach-out to our, Kardesh and-or I and thank you very much for joining. And like I said, hopefully we will do this the next time in our new offices. As you are probably aware, we’ve moved into a new office, which is — looks a little bit different from what we used to have earlier. When we say, we want to be a place that our people enjoy working in. I hope you get a sense of it.
Kunal Sheth
Thank you. Thank you so much. Looking-forward to seeing your new officer. Thank you. Thank you, Crompton team. Thank you participants.