Crompton Greaves Consumer Electricals Ltd Management Discussions

1. Economic overview

1.1 Global economy

The global economy in FY 2023-24 displayed exemplary resilience, with the United States of America (USA) leading the charge towards recovery and emerging markets exhibiting robustness. Inflation, which had been a lingering concern, receded more swiftly than anticipated, dropping to 6.9% due to smoother supply chains and stringent monetary controls. This trajectory is expected to maintain its course, with global inflation forecast to decline steadily, from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025.

Strengthening labour markets provided a foundation for equilibrium as improved job conditions buoyed consumer confidence and caused an uptick in spending. This surge in consumption has revived various sectors, with a ripple effect on industries linked to consumer spending. The real household spending in India is expected to grow by 6.7% in 2024.

(Source: BMI Research).

This optimistic phase was moderated by some economic pressures, including high borrowing costs and rising government debt in advanced and emerging markets. Despite this, the manufacturing and services sectors found solid footing, powered by consumer and government expenditure in developed nations. Emerging markets have held a neutral fiscal position, while liquidity and debt service challenges have continued to test low-income countries.

1.1.1 Outlook

The International Monetary Fund ("IMF") forecasts a steady global growth of 3.1% in 2024, with a marginal increase to 3.2% in 2025. While advanced economies may see fluctuations in growth, there is much optimism about the eurozone recovery and sustained progress in the USA. The IMF sees a soft landing for the USA econnomy, with an estimated growth rate of 2.1%, an upward revision of 0.6% as compared to earlier projections.

Geopolitical tensions continue to loom, threatening economic stability in certain regions and potentially reverberating across borders. Furthermore, adverse weather conditions are increasingly impacting food supply chains, exacerbating the challenge of managing inflationary pressures. Many nations have tightened monetary policies in response, further influencing demand dynamics across consumer and business sectors. After three years of extreme volatility, commodity prices are set to

broadly stabilise in 2024. However, soaring shipping costs and supply chain disruptions are among the risks to watch.

That said, emerging markets and developing economies show promising consistency in growth rates for the forthcoming period. China and India, Asias two growth engines, are slated to continue their upward climb, with India maintaining a strong performance at 6.5% for both years. In this global setting, certain sectors, especially those sensitive to discretionary consumer spending, such as lifestyle and technology goods, may experience indirect positive impacts.

With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth are broadly balanced.

Source: World Economic Outlook Update, January 2024

1.2 Indian economy

India is experiencing a K-shaped recovery, where entities with robust financial standings, including well-established corporations and affluent households, are witnessing a stronger rebound. Conversely, smaller enterprises and less wealthy families are likely caught in a detrimental cycle of poverty and debt, a situation exacerbated by the pandemics economic impacts.

The National Statistical Office ("NSOs") Second Advance Estimates signal an impressive growth trajectory for India, with real GDP expected to increase to 7.6% in Financial Year 2023- 24. The GDP growth rate surpassed expectations to rise to a six-quarter high of 8.4% in Q3 Financial Year 2023-24. Robust growth in manufacturing and a surge in investment put India in an advantageous position.

The governments response to global economic shifts included strengthening domestic production and enhancing infrastructure. Indias strategic push to become a manufacturing hub began to pay dividends, with global businesses drawn to the nations growing telecom and mobile assembly industries. Simultaneously, the infrastructure sector in India witnessed growth, given the countrys ambition for swift development and urbanisation trends.

Financial Year 2023-24 also saw a softening of inflation rates, descending to a four-month low of 4.87% in Q3. This acted as a reflection of the RBIs adeptness in curbing inflation and fostering growth. Supported by fiscal incentives, a revitalised private sector, and increased infrastructure investment, the stage for continued economic acceleration was set.

1.2.1 Outlook

The Indian economy has demonstrated vitality, with forecasts affirming its status as one of the worlds most rapidly expanding economies. The Indian economy will experience an annual expansion rate of 6-7% between 2024 and 2026. The private sector will be instrumental in driving this growth, empowered by a slew of government policies and incentives.

Companies now anticipate workforce expansions by 5% or more, alongside planned increases in product and service pricing, reflecting renewed confidence in the markets potential. This upward trend has resulted from Indias enhanced manufacturing competitiveness, favourable demographics, and an encouraging policy environment, including attractive production-linked incentives and a liberal Foreign Direct Investment (FDI) stance.

While inflation is projected to remain somewhat above the target range in Financial Year 2023-24 and Financial Year 2024- 25, the RBI is expected to take a careful approach. The apex banks reserves and a balanced external account position may afford it the latitude to consider rate reductions in the latter half of Financial Year 2024-25, providing a stimulus for further economic activity.

The government has announced an 11% increase in capital infrastructure. Capital expenditure outlay is now pegged at K 11.11 Lakh Crore for the next fiscal.

Source: Interim Budget Financial Year 2024-25

2. Industry overview

Electrical Consumer Durables industry

The Electrical Consumer Durables ("ECD") industry in India experienced an uplift in FY 2023-24 given the positive consumer sentiment led by surging demand for premium products. This momentum is projected to carry forward into 2024, with the industry poised for an anticipated growth of 7-9%.

The growth trajectory is underpinned by rural electrification, an expanding real estate sector, increased per capita electricity consumption, and supportive government policies, including capital outlay and initiatives like Production Linked Incentive ("PLI") and Remission of Duties and Taxes on Exported Products (RoDTEP).

The push for energy efficiency through the Bureau of Indian Standards ("BIS") and Bureau of Energy Efficiency ("BEE") star ratings, the shift towards solar lights and pumps, and the consumer-driven demand for product upgrades and replacements are set to drive the industry. In alignment with regulatory requirements, the adoption of Extended Producer Responsibility ("EPR") principles further fortifies the commitment to sustainable growth, ensuring responsible production and consumption patterns across the industry.

Moreover, there is a shift towards smart and connected homes, powered by the integration of Internet of Things (IoT). The trend is expected to escalate with the advent of Web 3.0, making smart home connectivity even more accessible. Voice assistant features, in particular, are becoming a standard expectation as the new generation of consumers demands the latest technology at competitive prices.

Additionally, the consumer journey is evolving into an omni-channel experience where customers often first explore products online before making the final purchase in-store. This hybrid shopping behaviour underscores the importance of seamless integration between digital platforms and physical retail spaces, catering to the modern consumers preference for informed purchasing decisions.

Fans

Fans remain a staple in households and offices, marking high market penetration and essentiality across demographics, especially in India. Positioned as a primary necessity, fans rank just after bicycles in terms of demand in rural India, highlighting their significance in everyday life.

The industry is characterised by a wide range of products including ceiling, table, pedestal, wall, exhaust, and specialised fans like cooling or fresher fans. The Indian Electric Fan Market is on a trajectory of growth, projected to surpass revenues of J 16,000 Crore by Financial Year 2027-28, with growth expected at 7-8%. This growth is driven by the diversification into niche categories such as premium, energy-efficient, and decorative fans.

The rise of the fan industry is further supported by increased distribution channels and replacement-driven demand. The popularity of premium fans is escalating, spurred by rising consumer purchasing power and a shift towards quality and aesthetics in consumer preferences. The fans market is distinguished by its successful premiumisation strategy, achieving growth at twice the rate of the overall category.

The construction of new homes, replacement needs within existing households, higher installation rates of fans per household, and the effective implementation of energy efficiency standards are anticipated to drive the demand for fans in India.

K 11,000 Crore

Fans market size in India as of 2023

Pumps

The pumps industry is crucial to sectors such as agriculture, water management, oil and gas, residential requirements and manufacturing, due to its essential function in fluid transportation. The global pumps market size was estimated at $ 57.7 Billion in 2023 and is anticipated to grow at a CAGR of 4.2% from 2024 to 2030.

In India, the pumps sector has been supported by an increasing demand for agriculture and municipal water management, as well as the expanding industrial and construction sectors. The India pumps market size reached J 7,500 Crore in 2023. Looking forward, IMARC Group expects the water pump market in India to exhibit a CAGR of 4.5% between 2024 and 2032. At the same time, the solar pump market in India is anticipating robust growth between 2025-2029 at a CAGR of 28%.

Government initiatives, like the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) and Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM KUSUM), aimed at enhancing farm irrigation, and schemes for promoting solar pumping systems, are expected to drive growth in the eco-friendly and energy- efficient pumps segment.

K 7,500 Crore

Pumps market size in India, as of 2023

Built-in Kitchen Appliances

The built-in kitchen appliances industry is characterised by premium products such as integrated microwaves, ovens, chimneys, and dishwashers. These appliances are designed to blend with kitchen cabinetry, offering a sleek and modern aesthetic that appeals to contemporary homeowners. The global built-in kitchen appliances market size was estimated at $ 13.8 Billion in 2022 and is expected to grow at a CAGR of 7.6% from 2023 to 2030. At the same time, the Indian large kitchen appliances market is valued at J 2,900 Crore.

This growth is driven by increasing consumer preference for modular kitchens and the trend towards home renovation and customisation that emphasises efficient space utilisation and aesthetic appeal. The demand for built-in appliances is

particularly strong in urban areas, where space constraints make compact and integrated solutions more attractive.

In markets such as India, the built-in kitchen appliances sector is witnessing rapid growth. Consumers are increasingly investing in high-quality built-in appliances that offer convenience and enhance the overall cooking experience, supported by rising awareness of the latest kitchen technologies.

Large Domestic Appliances

The Large Domestic Appliances ("LDA") industry has been witnessing robust growth driven by technological advancements, consumer demand for energy efficiency, and the digital transformation of retail. The global market for air coolers is projected to reach $ 2.5 Billion by 2025, growing at a CAGR of 10.8% between 2019 and 2025, while the Indian air cooler market stands at J 3,050 Crore. The global water heater market size was estimated at $ 29.26 Billion in 2023 and is anticipated to grow at a CAGR of 4.7% from 2024 to 2030, fuelled by innovations in heating technologies and a shift towards sustainable energy solutions. The Indian water heater market size stands at J 4,600 Crore. At the same time, the value of the electric heaters market globally had observed a significant increase over the years rising to over $ 10 Billion in 2023.

In India, the diversity of climate and rapid urbanisation have catalysed demand across the large domestic appliances sector. Air coolers are rising in popularity due to their cost-effectiveness, reduced noise, and inverter compatibility. Furthermore, their sustainability advantage over air conditioners, using water for natural cooling and minimising greenhouse gas emissions, aligns with the increasing preference for eco-friendly and energy-efficient appliances.

Similarly, the water heater market is experiencing growth, with a clear trend towards environmentally friendly and intelligent heating solutions. In line with these trends, the room heater market is also on the rise, driven by the need for affordable and efficient heating solutions in colder regions, reflecting consumers growing preference for comfort and energy efficiency in home heating options.

Small Domestic Appliances

In 2023, the Indian Small Domestic Appliances ("SDA") industry was valued at J 3,900 Crore, showcasing the sectors presence in the consumer goods market. Looking ahead, the industry is on a trajectory of substantial growth, with forecasts predicting the market size to reach J 7,800 Crore by the year 2032. This expansion reflects a CAGR of 8.17% from 2024 to 2032.

The industry is integral to the modern Indian kitchen - catering to the needs of both residential and commercial settings - and encompasses a wide array of products, including food processors, mixers, toasters, and sandwich makers. The demand for these appliances is spurred by the growing awareness among consumers about the importance of quality, durability, and the utility of incorporating advanced technology into daily cooking practices. The market is further buoyed by the increasing popularity of premium and connected kitchen gadgets, such as smart frying pans, precision cookers, and digital scales.

The trend towards easy-to-use devices resonates strongly with the countrys increasingly busy lifestyle, driving demand for appliances that offer convenience and time-saving benefits. The proliferation of online distribution channels has made these appliances more accessible, encouraging consumers to embrace modern kitchen technologies.

K 3,900 Crore

Small domestic appliances market size in India, as of 2023

Lighting

The lighting industry in India is undergoing major advancements in technology and increasing awareness of energy efficiency. There has been a rapid adoption of LED technology, which offers superior energy efficiency, longer lifespan, and better light quality compared to traditional lighting solutions. LEDs have become the dominant product segment due to their widespread application in residential, commercial, and industrial settings.

The Indian lighting industry, valued at J 16,900 Crore in 2023, is projected to experience moderated growth, reflecting the impact of value erosion in the LED lighting segment. This takes into account the market saturation leading to more conservative growth estimates. The major players in the market are focusing on innovation, product diversification, and smart lighting solutions to meet the needs of consumers and capitalise on the growing demand for sustainable lighting options.

The shift towards smart and connected lighting systems, integrated with IoT, is another trend shaping the future of the industry. These systems offer enhanced functionality, remote control, and customisation, further driving market expansion.

K 16,900 Crore

Lighting market size in India, as of 2023

3. Key growth drivers

Consumer trends

Todays consumers are solution-oriented and lifestyle-focused, seeking more than just functionality in the products they purchase. They desire goods that meet their immediate needs while aligning with their aspirations, uniqueness, aesthetic appeal, and enhancement of their overall well-being. This shift towards aspirational and demanding consumer behaviour is reshaping product development and marketing strategies, compelling companies to innovate and tailor their offerings to meet these evolving preferences.

Home sector

The home sector is experiencing an increase in consumer spending, driven by a growing emphasis on home enhancements, the adoption of smart home technologies, and connected devices. Furthermore, the incorporation of Internet of Things (IoT) into residential environments, coupled with the rising trend towards compact, fully connected homes, is also driving expansion in this domain. Such technological integration changes how homes are designed, equipped, and experienced, aligning with modern lifestyles that value connectivity and smart living solutions.

India Smart Home Market is expected to expand at a growth rate of 10.36% during the forecast period 2023-2029.

Brand strength

The strength of a brand lies in its ability to convey trustworthiness, dependability, and a history of excellence. These attributes are fundamental in guiding consumer choices, with individuals gravitating towards brands that have established a reputation for reliability and superior quality over time.

Sustainability

With an increasing focus on Environmental, Social, and Governance ("ESG") criteria, companies are integrating sustainable practices into their operations and product lines. Consumers are more conscious of their ecological footprint, seeking out products that are environment-friendly and socially responsible, pushing companies to prioritise sustainability in their business models.

As of 2023, the PM Kusum Scheme has been instrumental in setting up 140 MW of solar power plants and installing 2.73 Lakh standalone solar ^Spumps, demonstrating a step towards achieving solar power capacityadditionof 34.8GWbyMarch 31,2026. ^aThe scheme, with a total central financial support of J 34,422 Crore, targets the decentralisation of solar power and the solarisation of agricultural pumps, both standalone and grid-connected.

Innovation

The capacity to innovate and pioneer novel solutions provides companies with a distinct competitive advantage. By developing unique products that bring new value to the market and effectively address consumer challenges, businesses set themselves apart. This focus on innovation includes anticipating future demands, thereby securing a leadership position in the ever- evolving marketplace.

Omni channel presence

As consumer shopping behaviours evolve, the prominence of e-commerce, direct-to-consumer (D2C) models, and alternative retail channels is increasingly evident. To effectively reach and engage with a broader audience, companies must establish a strong presence across a diverse array of platforms. This entails a blend of traditional and digital retail approaches, complemented

by a deliberate shift towards direct-to-consumer channels. Embracing D2C maximises market reach while fostering a direct connection with consumers, allowing for more personalised marketing and sales experience.

India?s e-retail market is anticipated to reach growth levels of 23-25%, reaching over J 16,000 Crore by 2028.

Consumer centricity

In the digital era, a deep consumer engagement is crucial for understanding and meeting consumer expectations. Leveraging digital channels to gather insights into consumer preferences and behaviours enables companies to tailor their marketing efforts and product offerings, ensuring relevance and resonance in a competitive marketplace.

4. Company overview

With a rich history of 85+ years, Crompton Greaves Consumer Electricals Limited ("Crompton") is a leading name in Indias consumer electricals sector. The organisation operates across core business segments: The organisation operates in ECD and Lighting segment, offering products under the "Crompton" brand in India and abroad.

In June 2023, Crompton embarked on the Crompton 2.0 journey, targeting enhanced performance across segments. Our initiatives in the ECD segment have demonstrated remarkable results, enabling our company to consistently outperform in a competitive market. Strategic investments in advertising, innovation, and talent development have been key to Cromptons recent revenue growth.

We are guided by our purpose of "Enriching life for generations with smart and responsible solutions." Moreover, we encourage individuals to imbibe and inculcate the values of being Caring, Responsible, Entrepreneurial, Accountable, Team player, and Ethical. Together, our purpose and values enable us to deliver on our growth strategy.

Crompton 2.0

With our Crompton 2.0 growth strategy, our goal is to deliver sustained growth in the long-term. This enables us to adapt and evolve our work and leadership culture to respond to contemporary industry trends, while strengthening our market position. The tenets of Crompton 2.0 include:

• Enabled and empowered organisation

• Consumer need-led innovation

• Premiumisation of portfolio

• Supply chain excellence

• Go-to-Market excellence

• Digital enablement

Butterfly Gandhimathi Appliances Limited

Butterfly Gandhimathi Appliances Limited ("Butterfly") is one of Indias premier domestic kitchen appliance manufacturers known for innovation and quality. Butterfly leads the market, particularly in Southern India, with its extensive range of products including LPG stoves, pressure cookers, mixer grinders, and wet grinders.

Cromptons 75% stake acquisition in Butterfly represents a strategic move to strengthen our position in the kitchen appliance sector. Leveraging Butterflys market leadership in innovation and quality in southern India, Crompton gains access to advanced manufacturing, R&D capabilities, and a wide distribution network.

Standalone Financial Performance

Ratios	2023-24	2022-23
Debtors Turnover Ratio	11.23	10.98
Inventory Turnover Ratio (on Cost of goods sold)	6.70	7.10
Interest Coverage Ratio	10.77	7.41
Current Ratio	1.52	1.59
Debt Equity Ratio	0.19	0.32
Operating Profit Margin	10.78%	11.56%
Net Profit Margin	7.23%	8.08%
Return on Net Worth (RoNW)* *	15.43%	17.96%

*RONW is lower due to increase in shareholders fund over the years on account of profits accumulations

Consolidated Financial Performance Key highlights of financial performance

Particulars	2023-24	2022-23
	(K in Crore)	% to Revenue from Operations	(K in Crore)	% to Revenue from Operations
Revenue from Operations	7,312.81	100.00%	6,869.61	100.00%
Material Costs	5,000.31	68.38%	4,680.35	68.13%
Employee Benefit Expenses	589.87	8.07%	540.80	7.87%
Finance Cost	79.19	1.08%	109.18	1.59%
Depreciation & Amortisation Expenses	128.82	1.76%	115.92	1.69%
Advertisement & Sales Promotion	297.19	4.06%	206.48	3.01%
Other Expenses	711.75	9.93%	671.51	9.78%
Total Expenses	6,807.13	93.08%	6,324.24	92.07%
Other Income	67.39	0.92%	66.78	0.97
Exceptional items	-	0.00%	-	0.00%
Profit Before Tax	573.07	7.84%	612.15	8.90%
Tax Expense	131.29	1.80%	135.75	1.98%
Profit After Tax	441.78	6.04%	476.40	6.92%

5. Manufacturing

We place a strong emphasis on adopting efficient manufacturing practices that integrate advanced technology and lower operational costs. Embracing lean manufacturing principles, our Company has streamlined production processes across the product lifecycle -- aimed at heightened efficiency in all manufacturing operations. The pursuit of this efficiency is evident in the Companys strategic capital investments and operational efforts, designed to maximise resource utilisation.

With the acquisition of Butterfly, we have broadened manufacturing capabilities, adding to our production sites. A key initiative in enhancing the cost-effectiveness of our operations is Project Unnati. Furthermore, our Company has launched Project UDAAN, aiming to elevate manufacturing excellence across Cromptons -- as well as its vendors and suppliers facilities.

Q Read more on page 36

6. Innovation centre

We recognise the importance of innovation for sustained growth and adaptability in a milieu of changing consumer preferences. In pursuit of this, Crompton has a state-of-the-art Innovation & Experience Centre in Vikhroli, Mumbai. This facility, complete with a modern design studio, is equipped with the latest technology (ies) and softwares.

Our Company employs a structured approach to developing and introducing new products, setting them apart from competitors with superior consumer functionalities, experiences, and performance metrics. We are committed to continuous system development, enhancing operational efficiencies and fostering innovation in product design and functionality.

Dedicated New Product Development (NPD) teams for each business unit, operate on a forward-looking 12 to 18 months roadmap, ensuring that Cromptons offerings remain innovative. Our Company utilises a stage-gate process to enhance collaboration among stakeholders and increase the likelihood of success for NPD initiatives.

Furthermore, Crompton engages in open innovation initiatives both internally and externally. Collaborations with academic institutions, startups, and the central R&D department are instrumental in developing scalable solutions that resonate with upcoming consumer trends and demands.

7. Marketing

Our Company has increased investment in digital marketing initiatives, enhancing visibility and engagement across various digital platforms to spotlight latest product offerings. We have witnessed a phenomenal 120% surge in website sessions. This highlights Cromptons successful digital strategy and the ability to captivate and retain consumer interest online.

In addition to these accomplishments, we have taken decisive steps to recalibrate our investment behind the brand to align more closely with the industry-standard range of 3-5% of sales. This adjustment ensures that we maintain a strong market presence while enhancing our ability to connect with our audience. This has been further evidenced by our leading position in social media engagement and premier ranking in Google search results.

The fusion of our reinforced digital marketing efforts, corrected brand investment strategy, and our continued industry leadership in consumer engagement highlights Cromptons strategic approach to marketing and customer interaction, solidifying our market leadership and brand resonance with consumers.

8. Sustainability

Crompton is committed to implementing sustainable and green practices throughout the operations. Our Company rigorously complies with all regulatory requirements including EPR mandates, BIS and BEE norms, ensuring high standards of product sustainability, safety, and energy efficiency.

We focus on automation to streamline processes, ensuring efficiency and minimal environmental impact. We also opt for eco-conscious packaging solutions, utilising biodegradable materials instead of traditional thermocol and asbestos. Our water conservation efforts have led to zero wastewater discharge at all manufacturing sites, exemplifying our holistic approach to preserving natural resources.

9. Supply Chain

Crompton boasts a robust distribution infrastructure, featuring 22 (Twenty Two) warehouses and 6 (Six) central hubs strategically located across India to strengthen the supply chain. Our Company is well placed to leverage opportunities in South India to enhance distribution efficiency and lay the groundwork for growth.

Crompton employs a rigorous process for integrating new suppliers, including a detailed assessment protocol. This evaluation process scrutinises potential partners for their operational capabilities, product quality, punctuality, and adherence to legal and environmental standards. Additionally, it considers their commitment to engaging with Cromptons initiatives aimed at promoting sustainability within the supply chain.

10. Quality

Crompton maintains superior quality standards in every aspect of the business operations. To achieve this, our Company has instituted a variety of programmes aimed at boosting operational efficiency and a culture of excellence. Among these are the adoption of the 5S system for workplace organisation, the establishment of Quality Circles for employee engagement, the implementation of Daily Work Management for process efficiency, the utilisation of the Glass Wall strategy for transparency in performance metrics, and the deployment of Structured Problem-Solving to facilitate collaborative issue resolution.

These initiatives actively involve employees in improvement processes, enhance the efficiency of daily tasks, provide clear visibility into operational performance, and encourage teamwork in tackling intricate problems.

11. People

At Crompton, we are dedicated to building a workforce of high- performing, empowered individuals who deeply resonate with our organisational values and demonstrate exemplary behaviour. Our focus on professional development and recognition helps foster an inclusive environment where employees can thrive and advance their careers. As part of our Crompton 2.0 vision, we restructured our leadership to enhance dynamism and empowerment within the organisation.

This years key initiatives included launching a specialised learning platform, implementing AI-driven tools to address employee concerns effectively, and enhancing engagement through regular surveys. We also established an ESG Committee and a Diversity & Inclusion (D&I) Council, with a comprehensive policy to support these areas.

Looking ahead to Financial Year 2024-25, we will focus on improving talent acquisition and retention, developing our Crompton Young Leader Acceleration programme for trainees, and revamping our Performance Management System (PMS) to better align with our values. These steps are part of our commitment to making Crompton a place where employees are valued and essential to our success.

12. Opportunities

The consumer durable industry has benefitted from the rapid evolution of technology, changing consumer demographics and preferences. These are the areas of opportunity that are shaping the future of this sector:

Technological advancements

The pace of technological innovation offers fertile ground for the industry to launch cutting-edge products. From smart appliances that offer convenience to connected devices that enhance home automation, there is a growing market of tech-savvy consumers eager for the latest advancements. This trend sets the stage for future growth by continually pushing the boundaries of what is possible.

Growing middle-class population

The expansion of the middle class, particularly in emerging economies, presents a golden opportunity for the consumer durable sector. As disposable incomes rise, a larger segment of the population now finds itself in a position to invest in durable goods, broadening the customer base and driving demand across a range of product categories.

Rising consumer preference for health and hygiene

Todays consumers are inclined towards offerings that are distinguished by their unique designs, advanced features, and superior user experiences. Additionally, there is a growing preference for products that emphasise health and hygiene, reflecting a broader awareness and demand for wellness- oriented solutions. Catering to these trends enables companies to tap into a niche yet profitable market segment, leveraging the dual appeal of luxury and wellness to meet the sophisticated needs of modern consumers.

Sustainability and Green Initiatives

With an increasing global focus on sustainability, there is a marked shift towards products that are environmentally friendly and energy efficient. This trend presents an opportunity for companies to differentiate themselves by offering products that align with broader environmental goals and corporate social responsibility initiatives.

E-commerce growth

The rise of online shopping has revolutionised the retail landscape, offering a growth opportunity for the consumer durable industry. By leveraging e-commerce platforms, companies can extend their reach, provide greater convenience to customers, and tap into new markets with ease.

Smart-home trends

The advent of smart homes has created a new frontier for consumer durables, particularly with the integration of Internet of Things (IoT). Products that can connect with other smart devices and contribute to a holistic smart home ecosystem are in high demand, offering a lucrative niche for companies ready to innovate in this space.

13. Risk management

We are dedicated to protecting the interests of our stakeholders through a robust risk management framework designed to identify, assess, and mitigate business risks effectively. At the heart of Cromptons approach to risk management and governance lies a solid internal financial control infrastructure. This risk management framework prioritises prompt and efficient risk identification and mitigation - employing both top-down and bottom-up approaches and remains adaptable to meet the needs of the business environment.

The overarching objective of the Enterprise Risk Management (ERM) process is 2 (Two) fold: to minimise potential negative outcomes and to capitalise on market opportunities. This dual focus aims to drive continuous growth and maintain Cromptons competitive edge within the industry, ensuring long-term success and resilience.

14. Cautionary statement

This document contains statements about expected future events, financial and operating results of your Company, which are forward-looking. By their nature, forward-looking statements require our Company to make assumptions and are subject to inherent risks and uncertainties.

There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward- looking statements as several factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Cromptons Integrated Annual Report for the Financial Year 2023-24.