Crompton's margin improves year on year but slips for a second quarter
Standalone revenue grew 18.42% year on year, while sequential sales and margins declined as expenses fell less than revenue.
Filed 16 Oct 2026, 14:27 IST · Crompton Greaves Consumer Electricals Ltd (CROMPTON)
Key takeaways
- Standalone operating margin improved 0.93 percentage points year on year to 8.90% as revenue grew 18.42% and expenses grew 17.22%.
- Sequential momentum weakened: revenue fell 4.46% and operating margin narrowed 1.39 percentage points, marking a second straight quarter of margin decline.
- Net profit rose 56.98% year on year, but other income contributed 10.72% of pre-tax profit while interest expense increased 101.91%.
Price around the results
Year-on-year growth outpaced costs
Crompton reported standalone revenue growth of 18.42% year on year in Q2FY27, while expenses rose 17.22%; that operating leverage lifted operating profit 32.23% and expanded margin by 0.93 percentage points. Net profit increased 56.98% year on year, helped by the operating improvement, although other income accounted for 10.72% of pre-tax profit. The tax rate was broadly unchanged, rising just 0.26 percentage points, so the profit increase was not driven by a lower tax rate.
Sequential margin pressure returns
Compared with Q1FY27, revenue fell 4.46%, but expenses declined only 2.97%, causing operating margin to narrow 1.39 percentage points. This is the second consecutive sequential quarter of margin decline, after the margin fell from 12.15% in Q4FY26 to 10.29% in Q1FY27 and 8.90% in Q2FY27. Interest expense was broadly flat sequentially, while other income fell 17.02%.
Margin remains below the reported peer median
Crompton's 8.90% operating margin was 0.70 percentage points below the 9.60% median for the 15 Consumer Discretionary peers that had reported the same quarter. The company ranked sixth from the bottom on this measure. Year-on-year margin expansion therefore came alongside a weaker sequential trend and a below-median sector position.
Pumps and solar were the operating focus
Management said rooftop solar AP tender execution remained on track, with approximately 20,000 installations completed, while B2C and commercial and industrial roll-outs began during the quarter. The company said pumps gained market share across non-solar sub-categories and that it continued to gain share in water heaters; it also added the Eco Mini and Eco SWJ pumps and launched the commercial 5-star Renz Pro gas-stove series. Management said its GTM transformation is focused on winning at the point of purchase and told investors it targets FY29 revenue growth of approximately 13-14% CAGR, smart and connected products at approximately 15% of mix, and an FY29 exit EBITDA margin of 11%-12%.
No market reaction yet
The results were filed at 14:27 IST, so the stock has not yet had a reported post-results reaction in the supplied data. After the previous eight results, the stock rose six times and fell twice, with a median absolute move of 3.56%. The historical record points to a generally positive but variable response rather than a consistent direction.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,932 cr | ₹2,022 cr | -4.46% | +18.42% |
| Other income | ₹16 cr | ₹19 cr | -17.02% | — |
| Expenses | ₹1,760 cr | ₹1,814 cr | -2.97% | +17.22% |
| Operating profit | ₹172 cr | ₹208 cr | -17.42% | +32.23% |
| Operating margin (%) | 8.90% | 10.29% | — | — |
| Interest | ₹10 cr | ₹10 cr | +0.32% | +101.91% |
| Depreciation | ₹30 cr | ₹29 cr | +4.19% | +12.50% |
| Profit before tax | ₹148 cr | ₹189 cr | -21.57% | +57.52% |
| Tax | ₹38 cr | ₹49 cr | -21.54% | +59.12% |
| Net profit | ₹110 cr | ₹140 cr | -21.58% | +56.98% |
| EPS (₹) | ₹1.71 | ₹2.18 | -21.56% | +56.88% |
Operating margin of 8.90% compares with a Consumer Discretionary sector median of 9.60% across 15 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Rooftop solar AP tender execution remained on track, with approximately 20,000 installations completed.
- Rooftop solar B2C and commercial and industrial roll-outs commenced during the quarter.
Guidance & outlook
- The company targets FY29 revenue growth of approximately 13-14% CAGR.
- The company targets smart and connected products reaching approximately 15% of mix by FY29.
- The company targets an FY29 exit EBITDA margin of 11%-12%.
- The company targets an annual capex run rate of about Rs 120 Cr, excluding greenfield capex.
Expansion
- The company plans annual capex of about Rs 120 Cr, excluding greenfield capex.
New products
- New pumps Eco Mini and Eco SWJ were added to the portfolio.
- The company launched the commercial 5-star Renz Pro gas stove series.
New initiatives
- The company is implementing a GTM transformation focused on winning at the point of purchase.
Competition
- Pumps gained market share across non-solar sub-categories during the quarter.
- The company gained market share in water heaters.
What to watch
- Whether operating margin recovers from 8.90% after two consecutive sequential declines.
- Whether quarterly revenue momentum improves from the 4.46% sequential decline.
- Progress against management's stated annual capex run rate of about Rs 120 cr and its approximately 15% FY29 smart-and-connected mix target.