Crompton banking on premiumisation, new categories to drive growth: MD Promeet Ghosh

Mumbai: Consumer durables major Crompton Greaves Consumer Electricals Ltd (CGCEL) is betting on its expanded addressable market, premiumisation push and new product categories such as solar rooftops, wires and a newly-launched water purification range to drive growth in the coming years, Managing Director & CEO Promeet Ghosh said on Tuesday.

CGCEL, which on Tuesday unveiled a refreshed brand identity, has expanded its total addressable market (TAM) size from about Rs 80,000 crore three years ago to around Rs 1.6 lakh crore, following its entry into new segments, including solar rooftops, solar pumps, wires, and water purifiers, he said.

Total Addressable Market (TAM) is the total potential revenue or customer demand for a product or service if a company captures 100 per cent of the market share.


The Rs 8,000 crore company, which aims to nearly double its revenue in the next 5 years to Rs 15,000 crore, aims to blend its long-standing legacy of trust with the evolving aspirations of younger consumers seeking smart, connected and aesthetically designed products, Ghosh told PTI in an interaction.

"These entries have expanded our TAM... from Rs 80,000 crore to Rs 1,60,000 crore," he said, adding the company expects to enter only "one or two" new segments going forward, with the focus shifting to deepening its presence in categories it has already entered.

CGCEL, which reported a 15 per cent rise in consolidated net profit to Rs 142.7 crore and an 11.8 per cent increase in revenue from operations to Rs 2,235 crore for the June quarter, has sustained profitability through disciplined cost management, calibrated pricing actions, and continued investments in brand building and innovation.

On demand trends, Ghosh described July as "decent" and said FY27 "has begun well". He also mentioned that the June quarter was affected by supply chain uncertainties that have since been resolved.

Though he declined to share any forward-looking statements, he said its kitchen appliances business Butterfly is expected to benefit from the upcoming festive season.

Besides the domestic market, which offers huge growth opportunity, CGCEL is also focusing on the export market.

Regarding exports, Group CFO & Head of Strategy K Arunachalam said CGCEL is shifting its focus "from a traditional export model to building a dedicated international business strategy" with ambitions to expand meaningfully in overseas markets over the long term.

While exports currently contribute only a low single-digit share of revenue, the company sees substantial growth potential in international markets.

Ghosh said CGCEL is a major consumer durables exporter from India and there is an opportunity to grow substantially. The recent FTAs (free trade agreements) are also going to be helpful, he added.

Over demand trends, the CGCEL leadership said inflation remains the biggest challenge to consumption growth, particularly in urban markets, but measures such as income tax relief, GST rationalisation and higher government payouts should gradually support consumer spending and demand recovery.

The company has adopted a balanced approach while passing on a part of the cost increase to consumers and absorbing the rest through cost efficiencies to tackle the recent jump in raw material and commodity prices such as copper, plastics and aluminium etc.

"Some of the cost increases we have been forced to pass on to the consumer, but some of that we are absorbing," he said.

While acknowledging some softness in rural consumer sentiment, Ghosh expressed confidence that a normal monsoon and improving macroeconomic conditions would help revive rural demand, even as the company continues to strengthen its market position.

The 85-year-old brand, which entered the water purification market on Tuesday with Rhion brand, has also unveiled a new brand identity aimed at appealing to a younger, tech-savvy consumer base while retaining its legacy positioning around durability and reliability, Ghosh said.

He said the company is investing over Rs 100 crore annually in its innovation centre to develop smart, connected products.

Its CFO Arunachalam said Crompton's growth strategy is structured around three buckets -- core, emerging and future categories.

Its core portfolio comprises fans, pumps and lighting, while emerging businesses include kitchen appliances, geysers and air coolers. Future growth avenues include wires, rooftop solar and solar pumps.

The company acquired Butterfly Gandhimathi Appliances in 2022 and is now focused on building Butterfly into a national brand over the next three to five years.

"After acquiring Butterfly, we are now among the top players in the kitchen appliances segment. Our endeavour is to make Butterfly a national brand in the next three to five years," Arunachalam said.