• 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.

Found this insight useful?

For more such insights, delivered daily in real-time for free, download the inChat app from the Play Store. Download Now!

Please share with your friends and family as well. You can also subscribe to one of our channels listed at the bottom of this page.