• Expect Crompton to deliver steady growth in its core ECD business, despite a very weak macro environment. The silver lining of the decline in lighting is that now ECD constitutes over 90% of EBIT for Crompton and lighting becomes more of an option value.
• ECD growth is driven by market share gains in fans from new product introductions. The small appliances segment is also growing at over 30%, with three product segments fully operational—water heaters, air coolers, and mixers.
• Lighting continues to face challenges as B2B orders have been weak given the macro environment. While management remains hopeful of a recovery in margins through cost efficiencies, we do not build it in. We believe Lighting will constitute less than 10% of EBIT for FY20 and now has become more of an option value.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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