Crompton Greaves’ Profit Down by 18.8% in June Quarter

Mumbai, August 7, 2025: Crompton Greaves Consumer Electricals reported a decline in its Q1 FY26 performance. The company’s consolidated net profit dropped by 18.8% year-on-year to ₹123.90 crore, while its revenue from operations decreased by 6.5% to ₹1,998.34 crore. Despite the downturn in results, the company’s board has approved a major strategic move to expand into renewable energy and smart devices, a change that still requires shareholder approval.

Following the announcement, the shares of the company closed 0.11%, or ₹0.35 higher at ₹319.35. The shares made an intraday high of ₹322.75 and a low of ₹317.

Insights For Investors

• Profit and Revenue Down: Crompton’s net profit dropped by 18.8% and revenue fell 6.5% compared to last year, showing a weak quarter.
• Main Business Slowed: Its biggest segment, Electric Consumer Durables, saw lower sales and profits.
• Other Segments Did Better: Lighting and Butterfly products showed stronger profit growth, even with flat or small revenue increases.
• Smart & Green Expansion: The company plans to enter smart devices and renewable energy (like solar products), aiming for long-term growth.
• Less Debt Now: Debt-equity ratio improved from 0.17 to 0.08, which means the company has reduced its debt and is financially stronger.
• Margins Declined: Both operating and net profit margins dropped, which could impact earnings if not improved.
• Stock Stayed Stable: Share price was mostly unchanged, suggesting investors are waiting to see how the new strategy performs.
• Positive Outlook for Long Term: Though current numbers are weak, the focus on sustainability and smart tech could help the company grow in the future.

Key Financial Highlights (Consolidated)

For Q1 FY26, the company’s revenue from operations was ₹1,998.34 crore, a 6.5% decrease from ₹2,137.69 crore in the same quarter last year and a 3.0% drop from the previous quarter’s ₹2,060.64 crore. The total income also saw a decline, reaching ₹2,022.05 crore, which is a 6.4% drop year-on-year from ₹2,161.47 crore.

The profit before tax was ₹166.09 crore, a significant decline of 18.4% from ₹203.48 crore last year and 28.0% from ₹230.80 crore in the previous quarter. Similarly, the net profit was ₹123.90 crore, an 18.8% decrease from ₹152.35 crore in Q1 FY25 and 27.8% from ₹171.74 crore in Q4 FY25. The basic and diluted Earnings Per Share (EPS) also fell by 19.5% year-on-year to ₹1.90.

Segment-Wise Performance (Q1FY26)

During the quarter, the company’s largest segment, Electric Consumer Durables, saw its revenue decline by 8.1% year-on-year to ₹1,586.25 crore, with its profit before finance cost also falling by 18.2% to ₹211.63 crore. However, other segments showed more positive signs. Lighting Products reported revenue of ₹232.96 crore, a marginal decline of 0.2%, but its profit before finance cost jumped by 42.0% to ₹29.61 crore. The Butterfly Products segment had a revenue increase of 0.8% to ₹179.13 crore, and its profit before finance cost surged by 84.4% to ₹7.56 crore.

Key Developments

The board of directors approved a crucial change to the company’s Memorandum of Association (MoA), which is the document outlining its purpose. The amendment will allow the company to expand into two new areas: smart consumer devices and a range of renewable energy solutions, including solar PV systems, off-grid energy, and solar pumps. This move signals Crompton’s strategic focus on the growing markets for green energy and smart home technology.

In a separate update, the company allotted 43,750 new equity shares under its employee stock option plan (ESOP), which marginally increased its paid-up equity capital from ₹128.76 crore to ₹128.77 crore.

Balance Sheet Position (Consolidated)

The company’s balance sheet showed signs of improving financial health. The Net Worth was ₹3,976.47 crore in Q1 FY26, up from ₹3,608.73 crore in Q1 FY25. The company’s Total Assets were ₹6,287.59 crore in Q1 FY26, compared to ₹6,333.13 crore in Q1 FY25. Total Liabilities stood at ₹2,311.12 crore in Q1 FY26, a decrease from ₹2,724.40 crore a year earlier.

The company’s Debt-Equity Ratio improved significantly, halving from 0.17 in Q1 FY25 to 0.08 in Q1 FY26, indicating a stronger financial position with less debt. The operating margin for the quarter was 9.59%, a decrease from 10.87% in Q1 FY25. Similarly, the net profit margin was 6.13%, down from 7.05% in the same period last year.

Management Outlook

The company’s management stated that it is focused on expanding its market by introducing more energy-efficient appliances and venturing into renewable technologies. With the changes to its MoA, Crompton is positioning itself for long-term growth in the sustainability and smart device space.

REF:https://nsearchives.nseindia.com/corporate/Crompton123_07082025152856_BMOutcome07082025.pdf

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