Crompton Greaves Consumer Electricals Limited: history, ownership, mission, how it works & makes money

A Brief History of Crompton Greaves Consumer Electricals Limited

Crompton Greaves Consumer Electricals Limited (CGCEL) is a prominent player in the consumer electricals space in India. Established initially in 1937, the company has evolved through various phases, focusing on manufacturing and marketing a wide range of electrical products. In 2016, CGCEL was demerged from Crompton Greaves Limited, allowing the consumer business to operate independently, bolstering its focus on consumer needs.

In the fiscal year 2022-2023, Crompton reported a turnover of approximately ₹6,167 crore, marking a year-on-year growth of around 10%. The company's consistent performance is evident from its growing product portfolio, which includes lighting solutions, fans, and appliances.

CGCEL's fans segment remains a cornerstone of its business, contributing significantly to revenue. For FY 2022-2023, the fans segment alone accounted for approximately 36% of its total revenue. The company is known for its innovative designs and energy-efficient products, which have garnered a substantial market share in the fan segment.

In recent years, the company has also expanded into the appliances market, including products such as water heaters, kitchen appliances, and air coolers. The appliances segment generated a revenue of around ₹1,200 crore in FY 2022-2023, showcasing the company's diversification efforts.

CGCEL has maintained a robust focus on sustainability and innovation. The company has launched several energy-efficient products, aligning with national initiatives for sustainability. The introduction of smart lighting and smart fans is part of its strategy to cater to the evolving preferences of consumers.

In terms of market position, CGCEL holds approximately 14% of the organized market share in the fan segment, making it one of the leading manufacturers in India. The company has also established a significant presence in the lighting segment with a market share of around 12%.

The strategic expansion into digital channels is another aspect of CGCEL's operations. As of 2023, online sales account for nearly 25% of total sales, reflecting a growing trend towards e-commerce in the consumer electricals sector.

CGCEL’s commitment to research and development has led to a higher investment rate, with around 2.5% of total revenue allocated to R&D in the past fiscal year. This investment is directed towards developing new technologies and enhancing existing product lines.

On the stock market, Crompton Greaves Consumer Electricals Limited is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). As of October 2023, the company’s stock price was trading at approximately ₹450, with a market capitalization close to ₹30,000 crore.

Overall, Crompton Greaves Consumer Electricals Limited is positioned as a leader in the consumer electricals market, marked by sustainable growth, innovation, and a strong commitment to addressing consumer needs. This trajectory is backed by solid financial performance, a diverse product portfolio, and strategic expansions into emerging markets.

A Who Owns Crompton Greaves Consumer Electricals Limited

Crompton Greaves Consumer Electricals Limited, listed on the National Stock Exchange of India (NSE) under the ticker symbol CROMPTON, is a leading player in the consumer electricals market in India, primarily engaged in manufacturing and selling electrical consumer goods, including fans, lighting, and appliances.

As of the latest financial reports, Crompton Greaves is significantly owned by various institutional and individual stakeholders. The ownership structure is categorized as follows:

As per the latest financial statements from the quarter ended June 2023, Crompton Greaves reported a net revenue of ₹2,202 crore, reflecting a growth of 15.1% year-on-year.

The company’s operational efficiency is underscored by a EBITDA margin of 15.5%, showcasing robust profitability. In the last fiscal year, Crompton Greaves reported a net profit of ₹345 crore, which marked a remarkable increase of 20% compared to the previous fiscal year.

In terms of stock performance, as of September 29, 2023, Crompton shares were trading at approximately ₹437.75, with a market capitalization of around ₹43,460 crores. Over the past year, the stock has experienced a growth of 30%, significantly outpacing the broader indices.

The company's diverse ownership indicates strong institutional confidence, alongside a robust retail presence. Crompton's strategic initiatives in innovation and customer engagement are poised to enhance its market positioning further.

Crompton Greaves Consumer Electricals Limited Mission Statement

Crompton Greaves Consumer Electricals Limited (CGCEL) focuses on enhancing the quality of life through innovative and sustainable products. The company's mission statement emphasizes commitment to providing superior electrical products and solutions while ensuring customer satisfaction and sustainability in operations. The company aligns its mission with its operations in lighting, appliances, and electrical consumer goods.

As of the financial year ending March 31, 2023, CGCEL reported a revenue of ₹8,455 crores. This marks a growth of 12% compared to the previous fiscal year. The company’s net profit for the same period was ₹1,021 crores, reflecting a profit margin of approximately 12.1%.

The company’s strategic focus includes sustainable product development, which is reflected in their investment in eco-friendly technologies and adherence to sustainable practices. In FY 2023, CGCEL allocated over ₹150 crores towards R&D initiatives aimed at enhancing product efficiency and reducing carbon footprint.

CGCEL’s commitment to quality and innovation has earned recognition, with multiple awards for product excellence in categories such as lighting solutions and consumer appliances. In the fiscal year 2023, their market share in the decorative lighting segment reached 18%, enhanced by the launch of innovative LED products that appeal to modern consumers.

The company operates under prominent brands like Crompton and is known for its diverse product portfolio, including ceiling fans, lights, and kitchen appliances, reflecting its mission to be a household name in consumer electricals. Their brand value was estimated at ₹1,200 crores in 2022, showcasing a robust brand presence in the Indian market.

In line with its mission, CGCEL also emphasizes corporate social responsibility, investing ₹30 crores in community development and educational programs in FY 2023. This initiative speaks to their vision of not just being a market leader but also a responsible corporate citizen.

Overall, Crompton Greaves Consumer Electricals Limited continues to build its mission around sustainable growth, innovation, and customer-centricity, aiming to lead the market while positively impacting society and the environment.

How Crompton Greaves Consumer Electricals Limited Works

Crompton Greaves Consumer Electricals Limited (CGCEL) operates in the consumer electricals space, primarily focusing on the production and marketing of electrical consumer goods. The company segments its operations into various categories, including lighting, fans, appliances, and pumps. As of the fiscal year 2023, CGCEL recorded a total revenue of ₹7,256 crore, marking a growth of **13%** compared to the previous year.

CGCEL’s product portfolio features diverse categories, with its fans segment contributing significantly to overall sales. In FY 2023, fans accounted for approximately **39%** of the total revenue. The company has a market share of around **19%** in the organized fan segment, making it one of the top players in the industry.

In terms of operational efficiency, CGCEL has reported a 75% capacity utilization across its manufacturing plants, which are strategically located to optimize logistics and distribution. The company operates several manufacturing facilities in locations such as Baddi, Himachal Pradesh, and Pune, Maharashtra, contributing to its strong production capabilities.

CGCEL's commitment to innovation is reflected in its investment in research and development, which amounted to **₹45 crore** in FY 2023, targeting advancements in energy efficiency and smart technology. Product launches, such as the new range of energy-efficient LED bulbs, have bolstered its market position, with LED lighting growing at a CAGR of **12%** over the next few years.

The financial health of CGCEL can be further illustrated through its profitability metrics. For FY 2023, the company reported a net profit of **₹750 crore**, yielding a net profit margin of **10.3%**. The return on equity (ROE) stood at **18%**, indicating robust returns for shareholders.

CGCEL has established a strong distribution network with over **500,000 retail touchpoints** across India, enhancing its reach and accessibility to consumers. The company’s digital transformation initiatives have also driven online sales, with e-commerce channels contributing to **15%** of total sales in FY 2023.

Looking into future prospects, CGCEL plans to expand its product range and delve deeper into energy-efficient and sustainable solutions in line with growing consumer preferences. The company also aims to achieve a revenue target of **₹10,000 crore** by FY 2025, supported by aggressive marketing and distribution strategies.

In summary, Crompton Greaves Consumer Electricals Limited presents a compelling case within the consumer electricals sector, characterized by robust growth, a diversified product portfolio, and a strategic approach to market positioning.

How Crompton Greaves Consumer Electricals Limited Makes Money

Crompton Greaves Consumer Electricals Limited generates revenue through a diversified product portfolio primarily across two segments: Consumer Products and Electricals. The company focuses on manufacturing and marketing a wide range of household and electrical appliances.

Revenue Breakdown

For the fiscal year 2022-2023, Crompton reported total revenue of ₹7,827 crore, showcasing a growth of 14.3% over the previous year. The revenue was derived from various key product categories, including:

• Fans: ₹3,698 crore
• Lighting: ₹1,409 crore
• Appliances: ₹1,553 crore
• Others: ₹1,167 crore

Gross Margin Analysis

The company has maintained an average gross margin of 30% across its product lines. In FY 2022-23, the gross profit reported was approximately ₹2,348 crore. This substantial margin is attributed to operational efficiencies and a strong brand presence in the consumer electrical market.

Major Product Segments

Market Position and Share

Crompton Greaves holds a significant market share in the electrical appliances sector. Specifically, it commands approximately 25% of the fan market in India. The company is recognized as one of the top brands in the lighting segment, with nearly 15% of the market share.

Sales Channels

The company's revenue generation is also supported by a robust distribution network, which includes:

• Modern Trade: 35%
• General Trade: 50%
• Online: 15%

Advertising and Promotion Expenses

Crompton typically allocates around 6-8% of its revenue towards advertising and promotional activities, which play a crucial role in enhancing brand visibility and driving sales. In FY 2022-23, this expense amounted to approximately ₹469.62 crore.

Future Growth Projections

Analysts project Crompton Greaves to continue its growth trajectory, with an expected annual growth rate of about 12-15% over the next 3-5 years, driven by expanding demand for energy-efficient products and smart appliances.

Conclusion

Crompton Greaves Consumer Electricals Limited has established a multifaceted business model that leverages strong product offerings, efficient operations, and a comprehensive distribution network to generate substantial revenue in the competitive consumer electricals market.