Crompton Greaves Consumer Electricals Ltd Management Discussions.


The Indian economy contracted by 7.3% in FY21, as compared to 4.2% growth recorded in the previous fiscal year. The first half of the fiscal year witnessed overall economic slowdown, due to COVID-19 onset resulting in stringent lockdowns severely impacting economic activity, bringing manufacturing and trading activities to a halt. As the economy emerged out of the pandemic-induced recession in the second half, it registered a positive GDP growth of

0.4% in Q3 and 1.6% in Q4 on the back of a tailored fiscal stimulus of Rs 20 trillion under ‘Self-Reliant India movement, robust financial market and structural reforms initiated by the government, along with revival of consumer confidence. The growth reflected through uptick in manufacturing activity and GST revenues crossing Rs 1 trillion mark for a stretch of six months since October 2020 and hitting a record figure of Rs 1.23 trillion in March 2021.

The resurgence of COVID-19 cases since March 2021 is posing a serious risk to economic recovery and weighing down Indias GDP growth projections for FY22. Considering the impact on economically important states, Q1FY22 could witness lower economic activity and demand than anticipated due to stringent lockdowns and restrictions. Multiple states have been enforcing lockdowns of varying severity, leading to reduced mobility and unemployment, leading to economic distress.

However, the government has taken several initiatives with the objective of revitalising the economy. Proactive measures taken by the Government is expected to offer a sustained long-term recovery of the economy. Favourable fiscal and monetary reforms, ease in credit policies and concentrated stimulus packages for distressed sectors and vaccination roll-out are expected to enable revival in economic growth.

(Source:https://www. financialexpress. com/budget/union- budaet-2021-fm-sitharaman-proposes-steps-to-increase- fundina-for-national-infrastructure-pipeline/2184391/)


Electrical Consumer Durables Industry in India

The Electrical Consumer Durables (ECD) segment in India is likely to grow owing to a demographic profile with higher disposable income, access to easy finance options, increasing electrification of rural areas, rapid urbanisation and growth of nuclear families, and emerging consumer trends of ‘Home Proud and ‘Health & Wellness etc.

Continuous focus on innovation to drive differentiation and creating value has provided a growth impetus to this sector.


The fan market in India is well-established and continues to show good growth. The fans market is projected to surpass Rs 125 billion by 2023. Increasing spending power, rising temperatures and modular homes is expected to boost demand for electric fans in India. Demand for fans is likely to witness a surge in the coming years especially in the rural areas as the government plans to invest significantly in rural electrification.

(Source:https://www. businesswire. com/news/ home/20180706005112/en/The-Electric-Fans-Market-in- India-2018-Analvsis-Forecasts-2013-2023—Market-to- Surpass-2-Billion-by-2023—

Key Growth Drivers:

1. Focus on Energy Efficiency:

The Bureau of Energy Efficiency (BEE) initiated the Standards & Labelling programme for equipment and appliances to provide consumers important information about energy saving and to help them make informed choices. BEE deferred its slated plan of enforcing new energy labelling norms from July 2020 to Jan 2022. The change in these norms is intended to reduce the energy consumption of appliances and reduce its carbon footprint without diminishing its service quality. This will boost demand for energy-efficient products.

2. Performance of Housing Sector:

The residential sector is expected to grow significantly with the central government aiming to build 20 million affordable houses in urban areas across the country by 2022, under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme. The smart city project with a plan to build 100 smart cities, is a prime opportunity for the growth in this sector. (Source: IBEF)


The Indian water pump market size is estimated to be at Rs 71 billion. Rapid industrialization and power generation, are expected to have a positive impact on pumps market growth. Thrust on water infrastructure will stimulate further growth with the expansion in water and sanitization programmes. In addition, rising government expenditures for the development of a modern irrigation system in the agriculture sector is expected to drive market growth.

Key Growth Drivers:

1. Intensified demand for water and wastewater management

The growing population and increasing water usage across multiple industries are expected to promote the establishment of new water treatment plants. This, in turn, is expected to fuel the demand for pumps which are extensively used in wastewater treatment plants to process used water.

2. Government Initiatives

Government policies promoting energy efficiency and safety standards are projected to play an important role in market growth. Several government authorities are restructuring their present policies and introducing new frameworks such as development of sanitization services, rural electrification which is favouring the usage of pumps. The governments aim of providing drinking water to every household by 2024 under ‘Jal Jeevan Mission will drive the demand for pumps segment.

3. Solar-powered Water Pumps

The operation of solar-powered pumps is growing mainly due to lower operation and maintenance costs as compared to pumps powered by an electric motor. Governments Kisan Urja Suraksha evam Utthan Mahabhiyan (KUSUM) scheme, intending to instal solar-based water pumps will provide impetus to this segment.

4. Growing dependency on groundwater With the increasing irregularity of monsoon across the country, the consequent dependency on groundwater has increased. This in turn is driving the demand for high performance and energy-efficient water pumps across India.


The appliances and consumer electronics industry is expected to see acceleration in growth on account of surging rural consumption, increasing penetration of retail, growing middle class, increasing number of nuclear families, a wide choice of brands and products at various price points. Feature-rich products offering ease of use and improved aesthetics will drive premiumisation in this segment.

A. Water Heaters:

Increasing hot water demand from various residential applications such as bathing, washing, cleaning, and cooking, is anticipated to augment the demand for water heaters. Growth is majorly attributed to the rising demand for replacement of conventional water heaters with advanced systems.

B. Air Coolers:

The Indian air cooler market is projected to grow due to rising temperatures, increasing disposable income, growing demand among the middle class and the lower price of air coolers as compared to air conditioners. Tech-driven products with improved aesthetics are augmenting the growth of air coolers.

Lighting Industry in India

The lighting industry is expected to be the next digital disruptor, owing to the increasing adoption of Internet of Things (IoT). LEDs have gained mainstream in the lighting market because of its competitive price and energy efficiency. Rural electrification programmes, infrastructure development, construction of new homes and consumer demand for improved and energy- efficient lighting will drive growth for this industry.

The government under PLI scheme for white goods (Air Conditioners and LED Lights) has announced an incentive of 4% to 6% for a period of 5 years to the companies/entities engaged in manufacturing of LED lights and components of LED lights subject to threshold of cumulative incremental investment and incremental sales. This step will boost domestic manufacturing, create economies of scale, enhance exports and create a robust component ecosystem and employment generation.


About the Company

Your Company is one of Indias leading consumer electrical companies present in the Electrical Consumer Durables "ECD" and Lighting segment. It manufactures and distributes a wide range of consumer products ranging from fans, pumps, and appliances (Water heaters, air coolers, mixer grinders, iron) in the ECD segment and a full range of lighting products.

Your Company is a market leader in fans, domestic pumps and street lighting segments.

Manufacturing Locations:

• Goa

• Vadodara

• Ahmednagar

• Baddi

Comprehensive Product Portfolio

Fans Pumps Appliances Lighting
Ceiling Fans Residential Pumps Water Heaters LED Lamps
Table Fans Agricultural Pumps Air Coolers LED Battens
Pedestal Fans Solar Pumps Mixer Grinders LED Panels
Wall-mounted Fans Specialty Pumps Irons LED Streetlights and Floodlights
Ventilating Fans Small Kitchen Appliances High Mast/ Streetlighting Poles
Heavy-Duty Exhaust Fans Interior and Architectural Lighting
Air Circulators High Intensity Discharge Lamps
Industrial Fans Incandescent Lamps
Compact Fluorescent Lamps
Fluorescent Tubular Lights

Business Segments

Electrical Consumer Durables (ECD) Business

Despite commodity and other headwinds, Electric Consumer Durables (ECD) business has shown improved growth trajectory due to ongoing efforts in innovation and new product development, supported by timely execution of Go-To Market initiatives including development of alternate channels like e-commerce, modern retail, rural etc. The Companys range of consumer electrical appliances/ durables (ECD) has continued to see strong demand, aided by the work-from-home culture.

(Source:https://www. zeebiz. com/companies/news-ecd- business-had-a-contribution-of-15-in-revenues-of-the- quarter-shantanu-khosla-crompton-areaves-69723)

1. Fans

Your Company continues to strengthen its leadership in the fans segment and increase its market share. This was primarily attributable to its faster growth in premium fans and wider availability of its products across India.

New Launches

Continuing the thrust on innovation, your Company has launched ceiling fans and designer fans with 5-star ratings along with energy-efficient fans with BLDC technology - Gianna Ceiling Fans, Torpedo TPW Fans, Drift Air & Anti Dust in Exhaust Fans, Energion E-Save under BLDC fans.

In the Pipeline

Your Company is in a good position to transition to the new BEE norms with respect to its existing portfolio. Your Company will continue to focus on building up the premium portfolio. It will widen its product portfolio through differentiated offerings at lower cost and better aesthetics. It also plans to export to SAARC countries; and will focus on channel expansion and rural programmes.

2. Pumps

Your Company continued to show growth in residential pumps. Your Companys cost-saving initiatives enabled it to maintain its gross margins. Your Company gained growth in both economy and premium segment in residential pumps.

New Launches

Given the focus on premiumization, your Company has launched ‘Mini Neo and ‘Mini Everest water pumps, thereby strengthening the Mini Series Portfolio. Your Company has also launched two variants of Solar Pumps and would focus on building the Solar Pumps segment. Several variants of submersible pumps, with enhanced features were added to the existing range and products with superior performance in Ultima and Magna series were also launched.

Future Plans

Your Company will continue to leverage its brand equity and introduce products in the premium range in both domestic and agriculture pumps. The governments pro-solar initiatives such as the PM Kusum scheme has prompted your Company to enter the solar pump business. Your Company also aims to grow faster than the market in the agricultural pumps segment.

3. Appliances

Your Company registered notable growth in consumer appliances in terms of both value and volume. It focussed on increasing the efficiency of its products and improved margins without compromising on quality. It also launched a host of innovative products

with 42 models introduced across all categories including smart air coolers, anti-bacterial products, and a smart plug.

A. Water Heaters

This category saw continued gains in market share aided by new products and distribution expansion. During the year, your Company further launched new products such as Rapid Jet Plus, Aura 5*, Arno Neo 5* under this category.

B. Air Coolers

Your Company witnessed steady growth in the air cooler segment during the year and continued to launch coolers with advanced technology and better features. As people were working from home demand for coolers witnessed a surge. It launched new air coolers such as Gale Desert Cooler and Cool Breeze.

C. Other Appliances

In this category, your Company sells mixer grinder and irons. Mixer grinder business grew significantly both in volume and value terms through product portfolio refresh and range expansion, improved supply chain and increased distribution. Your Company launched Sierra, Treat, Treat X range in mixer grinders. It also launched 3 steam irons and 4 dry irons during the year with better technology and advanced features.

Future Plans

The appliances category is one of the key areas of growth for your Company. It will continue to offer appliances with more conveniences and features to meet the growing demands of its consumers. Your Companys focus is to expand the core, which is the water heater and air cooler product lines followed by small domestic appliances. The appliance business has doubled in the last three years and your Company will continue to build on this momentum by strengthening its core categories and developing full range of kitchen appliances. The focus would remain on offering premium features and smart technology at affordable pricing.

Lighting Business

The lighting business was affected by the lockdown and consequent clampdown of economic activity but picked up after economic activities resumed. Your

Company registered growth over the previous year in the B2C segment with double-digit growth in ceiling lights. Your Company also improved its gross margins in both the B2C and B2B segment through weeding out inefficiencies and better inventory management. The B2B segment, however, was impacted by supply chain issues due to the pandemic.

New Launches

In B2C, your Company launched the smart IoT lamp (Immensa) and plans to launch more IoT products soon. Your Company, based on market demand and research, launched Star Lord Panels and Downlighters, Star Striko Surface, Star Dura Panel Eye Smile Panel and revived its current portfolio.

Future Plans

Going forward, your Company aims to have a threepronged strategy to achieve good growth in the B2C segment. The first is to have the best or the most innovative products especially around emerging or more accepted products such as ceiling lights and battens and IoT products. The second is to increase brand awareness so that the brand name of Crompton resonates with consumers looking at lighting products. The third is to have the best customer and consumer service in the industry. For B2B, your Company aims to create efficient designs and foray into newer categories such as solar and decorative.

Five-Dimensional Growth Strategy: Your Companys strategic objective remains to grow faster than the market and become a leading brand in all its business segments. It has defined five-dimensional excellence pillars through which it aims to achieve its goal. These excellence pillars are branding, portfolio, go-to-market strategies, operational and organisational leadership.

1. Brand Excellence

Your Companys resilient and strong brand value has enabled it to gain market share across all product categories. Your Companys constant endeavour has been to deepen engagement with consumers and meet their needs and desires. Your Company is reaching closer to its consumer through its wide-ranging efforts across various touchpoints to strengthen its brand awareness.

Your Company ramped up its brand awareness initiatives across media to increase consumer recall of its products. With increasing number of consumers moving online, your Company is intensively leveraging the digital platforms and social media to reach out to them. The campaigns have resonated well with consumers and driven a favourable response.

Your Company has built upon its brand architecture across fans and lighting segments to create a well-framed structure to aggressively drive customer reach and sales. Your Company has worked on increasing consumer awareness of appliances segment, with large-scale advertising on water heaters, positioning the benefit as ‘The Perfect Hot Water. It has also been focussing on promoting air cooler range of products, which has resulted in stronger sales and market share gains. More interestingly, new packaging will be rolled out across all product segments.

Another important thrust area for your Company is e-commerce. Understanding the pulse of the consumers and the way they shop; it has been increasing online visibility of products to increase sales through this channel. The digital marketing strategy is structured to drive more traffic and discoverability of products on e-commerce platform.

Your Company is also working towards upgrading the in-store facilities by leveraging advanced technology to enhance the shopping experience of consumers. It is exploring the concept of perfect stores, which showcases the product and its features through product displays, dummies, room sets, catalogue demos, visualisation tools, and colour cards. Along with this, customisation, installation support, usage guidance and after sales support are some of the aspects which your Company is looking at, in terms of the perfect store.

The year under review has witnessed a consolidation of efforts, the results of which will position your Company to drive strong growth in the coming years. Your Company will continue to surpass consumer expectations through its innovative products and structure the campaigns to build greater awareness and recall of the brand.

2. Portfolio Excellence

Your Company continues to offer differentiated products to its customers through its value engineering. The consistent efforts in portfolio excellence enables your Company to deliver products, be it in the affordable or premium category, with enhanced performance and durability, superior aesthetics, and improved energy efficiency.

R&D is the bedrock of technological expertise, the enabler for innovative product launches across all categories. Your Company has accelerated innovation and portfolio expansion and incorporated newer, energy-efficient technologies in fans, pumps, lights, and appliances. Further, it is constantly eyeing opportunities in Internet of Things (IoT), energy efficiency and cooling technologies to design products with enhanced functionality.

Your Company continues to administer leadership in the fans segment with increased market share. This is primarily attributable to premium range of fans and increased availability of products. One of the major highlights of the year was the launch of designer ceiling fans with 5-star ratings and energy-efficient fans with BLDC technology.

While the pumps business witnessed sluggish growth in the first half, your Company had launched two new variants in the ‘Mini premium residential pumps segment - Mini Neo and Mini Everest along with two variants of solar pumps and several variants of enhanced submersible pumps range called as "Ultima" & "Magna" with superior performance. It plans to leverage new- age, advanced technology in motors to enhance efficiency of pumps.

In the category of appliances, your Company launched several new models in water heaters with 5-star ratings, mixer grinders, air coolers and other appliances by incorporating power-saving technologies. With reduced travel and more stay-at-home situations in the post-COVID world, consumers look for easy-to-use and convenient products. This will provide a huge thrust to your Companys innovative and ever-evolving appliances products.

Seeing the huge potential in LED lighting segment, your Company had launched various new products like Star Lord Panels and Downlighters, Star Dura Panel Eye Smile Panel, Star Glaze Pro Downlighter, LED Immensa (IoT lamp) and revamped its existing products. The focus is to continuously innovate and produce energy-efficient, smarter lighting products and to build greater awareness for these products.

3. Go-to-Market Excellence

Your Company has developed a Go-to-Market (GTM) strategy with an objective to reach target customers and achieve a competitive advantage. Despite, the disruptions caused by COVID, your Company posted strong annual growth which was higher than the industry. Once industrial activities started to resume, your Company deployed a novel approach to drive sales. Your Company focussed on data analytics and market segmentation based on red (COVID hotspots), amber (districts with limited COVID cases) and green (districts with zero COVID cases) markets with a concerted focus on green and amber markets to drive sales. This approach was an industry first and the Crompton RAG model soon became the benchmark in the industry.

Employees were trained on tele-sales and digital channel assessment & appointment. There was increased digital engagement with channel partners and a higher focus on e-commerce and rural channels.

Your Company continues to leverage data analytics and technology. It utilises the Dealer Portal - digital interface of Crompton for direct channels to improve ease of doing business; SAP for primary order management and the DMS (Distributor Management System) to gather & track secondary sales data. As a result, 80% of the Companys secondary sales can now be tracked. It also has Konnect - mobile application for direct communication and engagement of retailers to enable sales. It has launched a WhatsApp bot to enable 360 degree complaints registration process to significantly enhance customer and consumer experience.

Going forward, your Company is working on making the dealer portal platform a one-stop solution for direct channel partners. It also intends to develop a go-to mobile approach with this portal.

Your Company has developed a rural ‘Son-of the-Soil model and increased its foot strength for 10,000 - 1 lakh population centres.

The results have been encouraging and your Company plans to cover approximately 60% of these towns soon.

Your Company has doubled its retailers reach. It aims to reach new retail chains to ensure 100% accounts coverage and continues to increase store presence, improve product availability in new geographies through tie-ups with micro finance institutions, along with collaboration and partnerships with new emerging channels.

Your Company exports Fans, Pumps and Appliances with a strong presence in the Fans segment. Your Company plans to target new territories and sell more varieties of products and continue increasing its presence and adding more customers.

4. Operational Excellence

Your Companys unflinching focus on driving operational excellence is one of the key enablers of its business performance. Your Company is geared towards streamlining its processes, optimising costs and accelerating the shift towards digitalisation to drive greater efficiency.


Your Companys quest to drive operational excellence was reflected in the new initiatives implemented during the year. These comprise 5S, quality circles, daily work management, glass wall and structured problem-solving.

A Japanese concept of workplace management, the 5S (sort, set in order, shine, standardise, sustain) methodology focusses on putting everything where it belongs and keeping the workplace clean. Your Company has initiated the first two steps of the 5S concept at its product lines. This has helped to ease the movement of people and material, thereby enhancing employee morale and productivity.

Under quality circles, shop floor interactions are being emphasised for problem resolution. In majority of cases, the issues are successfully solved by the frontline employees, as they are the ones most familiar with the project and process.

Daily work management focusses on the daily activities that need to be carried out for quality maintenance. Process stability and process capability form the core of this concept for always delivering quality products. The initiative has been rolled out for quality function and manufacturing operations, with the aim to embed world-class practices in each of the 31 identified audit areas.

Under the "glass wall" initiative, the key performance indicators are transparently displayed on dashboards in all plants and functional departments. The metrics are rigorously assessed and corrective action is taken to address performance gaps.

The structured problem-solving initiative is aimed at solving complex problems through crossfunctional collaboration and competency building. Using the seven basic tools of quality, the initiative also enables continuous improvement.

Your Company recognises that the success of its operational excellence initiatives will ultimately depend on the capabilities of its people. To grow their competency, close to 4,761 manhours of training was conducted in last fiscal year for both employees and vendors.

Apart from these new initiatives, your Company continues to carry out its existing projects which are yielding significant benefits; among them is Project Delight, aimed at creating a culture of quality. As part of this project, your Company has intensified its focus on minimising product defects. Stringent quality performance audit at both in-house and vendor units and improvement in quality gates are being driven in line with this objective. We also initiated the vendor delight project wherein teams work closely with vendor units to improve their performance.

Supply Chain

Your Company continues to monitor its supply chain with an aim to deliver the right product at the right time. To tackle the COVID-19 setback in the supply chain, your Company put in place a detailed plan to enable a "vertical start-up" as the COVID-19 restrictions were being eased. Your Company ensured all SOPs were followed to ensure the safety of vendors and suppliers.

Your Company is committed to responsible procurement practices. It has created an SOP and checklist for new vendor on-boarding and deployed a scorecard for strategic vendor and supplier, transporters, and CFA to monitor KPIs. It also uses a Vendor Performance Index to monitor Vendor Performance across several KPIs. Your Company is working on reducing dependency on China for supplies. A central commodity team has been created to buy raw materials and work components that can be used across the product lines for the purpose of scale and synergy. The transformation launched in the space of procurement three years ago is now fully operational.

Your Company implemented On-Time in Full (OTIF) approach for distribution and leveraging strategic partnerships for improving OTIF and warehousing operations.

Your Company would continue its focus on digitisation of logistics, increased automation in procurement, physical distributions and planning.

Information Technology

Information Technology (IT) has been the mainstay and an enabler to the business. Your Companys digital roadmap is defined under its ongoing programme ‘Urja. Under phase I and II, Urja has not only strengthened core business by leveraging better technology but has also helped your Company to improve its partner relationships and employee engagement by enhancing the ease of doing business and gaining deeper market insights. Your Companys digital transformation journey is now into its next phase with a focus on the following themes: information safety; security checks and controls; leveraging data; customer and consumer experience; knowledge management; and process simplification. At a time when cybersecurity risks have heightened globally, your Companys strengthened measures has enabled it to keep the data safe from security threats. Your Company will continue to invest in building strong walls against any kind of cyberattacks.

Your Company has always embraced that technology is not only an enabler but also a disruptor. In the last four years, your Company has sprinted to a state where it is almost at par with its peers; and with the slated digital transformations, it is on its way to gain a cutting edge in the industry.

Project Unnati

Your Company, through its ‘Cost Excellence Programme, continues to deliver noteworthy benefits which helped in delivering competitive products across businesses. Cost savings of Rs 153 crore was achieved from various initiatives spanning across product design optimisation, in-house manufacturing, commercial negotiations etc.

5. Organisational Excellence

The foundation of your Companys leadership, innovation and customer engagement is its people. Your Company nurtures its employees by empowering them, providing an environment of highest safety and training for enhancing skills. Your Companys focus has always been on strengthening the talent pipeline by way of improving employee engagement, career development and greater learning and development opportunities.

FY 2020-21 presented your Company with a challenging landscape. However, the consistent efforts and dedication of the employees have ensured uninterrupted business operations and led to a commendable performance.

Your Company accords great importance to safety and health of its employees Taking proactive measures, your Company was one of the first companies to initiate ‘Work from Home for its employees. Your Company ensured employees were educated on health and self-discipline and adherence to all the safety guidelines issued by the government. Your Company took some additional measures like partnering with health consultants, top-up insurance and other increased insurance benefits. The MyShield app was installed at all plants which enabled contact tracing, tracking violation, and monitoring the physical presence of people entering the plant.

Your Company launched a dedicated learning platform to help employees in developing their capabilities. It initiated several employee engagement sessions and communicated frequently through interactive sessions like ‘Ask Your CEO etc. Your Company started a special ‘Reward & Recognition programme for the employees for demonstrating exemplary Crompton behaviours in difficult times. These were recognised as ‘COVID-19 Heroes.

The IT team played a pivotal role in providing adequate systems to employees so that they can operate smoothly out of their homes. The sales team who primarily work by extensive field visits, adapted to the new normal by staying connected with business partners through regular telecalls and providing necessary support remotely for their businesses to run effectively. Your Company did not resort to any layoff or pay cut but ensured timely payout of incentives. Further, your Company advanced its salary payout by a week.

At the same time, communication has been the cornerstone of managing the pandemic and has been used very systematically at Crompton. Your Company has institutionalised channels of twoway communication through virtual meetings and townhalls and ensured that transparency remains the foundation of organisational behaviour. Your Company ensured regular communication with the employees and union leaders through virtual townhalls.

Further, your Company believes in empowering its people through extraordinary learning opportunities to build a future-ready workforce. Leaders were in constant touch with their teams through initiatives like "DIL SAY" free-wheeling sessions, wherein employees can have direct and open discussions with their peers and managers. Surveys were sent out to employees to capture data about the handling of the pandemic situation at all the locations and to understand what could be done better. The leadership team also agreed upon rituals to be followed within the teams to improve their engagement levels. They include the monthly "Thumbs Up" sessions, the objective of which is to reinforce positivity within the team.

Your Company has utilised artificial intelligence driven tools like Amber and Hyphen to gauge the concerns of the employees and have addressed them regularly through their respective HR business partners and functional heads. To measure the effectiveness of the communication channels, your Company has been continuously obtaining feedback from its employees (both team and individual) through surveys and personal interactions.

Your Company had conducted an employee engagement survey, organisation-wide, in December 2019. The engagement level stood at 63% back then. Detailed action plans were made by each business unit based on the themes of collaboration, decision-making, innovation and learning & development. Your Company conducted an employee engagement dipstick survey in February, 2021. The survey was sent out across all our units and received a response rate of 84%. The questions were focussed on the pillars "say, stay and strive". The engagement scores have seen a steep increase to 88% in February 2021. One of the focus areas has also been to build the skills and capabilities of the workforce. Towards this, your Company conducted extensive learning and development programmes including virtual monthly training calendars. Key programmes included project management, teleselling skills, analytics and reporting, Crompton behaviours, leadership development, product training, market research & consumer insights, stress management, work-from-home skills, career development & performance management, B2B and key accounts management, field force enablement, and others. Your Company has launched a best-in-class learning platform named Degreed, which saw an encouraging response and large consumption of self-learning modules by employees.

Environment, Health & Safety (EHS)

Your Company remains committed to health, safety and environmental concerns while balancing a sustainable growth objective. It has implemented ‘Kavach - a robust programme that ensures strict adherence to safety standards and norms. It is aimed at minimising the adverse impact of manufacturing processes on the environment along with ensuring health and safety of its employees and other key stakeholders. During the lockdown period, your Company accorded paramount priority to employee health and welfare. Key measures included temperature and oxygen level checking, partition provision between workstations, sanitisation of all touchpoints, social distancing, tracking, tracing and isolation of employees with symptoms, etc. Your Company revisited employee health insurance coverage for appropriate preventive screenings during the COVID-19 times. Your Company is ensuring strict compliance to government guidelines on health and safety of its workforce.

Commitment to ESG Your Company strongly believes that environmental pillar of the sustainability drive is a crucial factor for driving business growth. As a forward-looking organisation, your Company is working towards various initiatives to reduce carbon footprint, minimise emissions, achieve energy efficiency and conserve natural resources. Further, your Company takes utmost care and undertakes meaningful initiatives to create positive impact in and around its communities. Equal opportunity employment, talent grooming, women employee welfare programmes etc. are among its major interventions.

ESG Committee

The Environment, Social and Governance (ESG) Committee of your Company is formed with the objective of supporting its ongoing commitment to environment, health and safety, social responsibility, governance, and sustainability matters. The Committee assists the senior leadership team in:

• setting general strategy relating to ESG matters;

• developing, implementing, and monitoring initiatives and policies based on that strategy;

• overseeing communications with employees, investors, and stakeholders with respect to ESG matters;

• monitoring and assessing developments relating to and improving the Companys understanding of ESG matters; and

• efficient and timely disclosure of ESG matters to internal and external stakeholders.

It is the responsibility of the Committee to periodically review and assess the ESG charter and submit the recommended changes to the Board for its consideration.

Financial Performance

Ratios 2020-21 2019-20
Debtors Turnover Ratio 10.09 8.81
Inventory Turnover Ratio (On Cost of goods sold) 6.58 7.51
Interest Coverage Ratio 18.19 16.12
Current Ratio 1.92 1.60
Debt Equity Ratio 0.25 0.24
Operating Profit Margin 16.43% 14.53%
Net Profit Margin 12.53% 10.82%
Return on Net Worth (RoNW)* 35.71% 38.55%


*Return on Net Worth (RoNW) is a measure of profitability of a Company expressed in percentage, it is calculated by dividing profit for the year by average capital employed during the year. Return on Net worth (RoNW) for 2020-21 was lower mainly on account of increase in shareholders fund over the year due to profits accumulations.

Consolidated Financial Performance Key highlights of financial performance are:



Particulars Amt ( crore) % to Revenue from Operations Amt ( crore) % to Revenue from Operations
Revenue from Operations 4,804 100% 4,520 100%
Material Costs 3,267 68.01% 3,070 67.92%
Employee Benefit Expenses 337 7.01% 311 6.88%
Finance Cost 43 0.90% 41 0.90%
Depreciation & Amortisation Expenses 30 0.62% 27 0.59%
Advertisement & Sales Promotion 82 1.71% 99 2.19%
Other Expenses 397 8.26% 441 9.76%
Total Expenses 4,156 86.51% 3,989 88.24%
Other Income 76 1.58% 59 1.31%
PBT 724 15.07% 591 13.07%
Tax Expense 107 2.23% 94 2.09%
PAT 617 12.84% 496 10.98%

• Revenues from Operations:

During the year ended 31st March, 2021, your Company registered consolidated revenue from operations of Rs 4,804 crore against Rs 4,520 crore in the previous year 2019-20 delivering growth of 6.3% over last year. Due to the impact of COVID pandemic, the first half of 2020-21 witnessed 20% decline in revenues over corresponding period 2019-20. However, on account of strong performance of Electrical Consumer Durables (ECD) segment through investment in growth initiatives like strengthening alternate channels, customer reach expansion and technological enhancements, the second half of 2020-21 witnessed 37% growth over corresponding period 2019-20.

Revenue of Electrical Consumer Durables (ECD) segment constituting fans, pumps, and appliances, stood at Rs 3,757 crore in 2020-21 delivering growth of 11% over previous year. Lighting segment clocked consolidated revenue of Rs 1,046 crore in 2020-21 against Rs 1,131 crore in the previous year 2019-20.

• Other Income:

Other income for the year ended 31st March, 2021 stood at Rs 76 crore. It primarily constitutes interest income, investment income and other miscellaneous income. Interest from customers, investments and tax refund are the main constituents of interest income.

• Material Costs:

Material Costs comprises consumption of raw material, semi-finished goods, purchase of finished goods for re-sale and increase or decrease in the stock of finished goods and work-in-progress. For the year under review, material margin contracted by 10 bps due to sharp surge in commodity costs in second half of 2020-21. The sharp increase in commodity cost was largely offset by the accelerated cost saving initiatives, driving better mix and pricing actions in the last quarter.

• Employee Costs:

During the year under review, employee cost stood at Rs 337 crore as compared to Rs 311 crore in 201920. Increase was mainly on account of capability building in research & development, rural business and hiring of key strategic positions.

• Advertisement and Sales Promotion (A&P) Costs:

A&P spends to sales ratio during the year was 1.7% as against 2.2% in 2019-20 as the activities in first half of last fiscal year were severely impacted by the pandemic. A&P spends in the second half stood at Rs 55 crore, an increase of 77% over corresponding period of 2019-20.

• EBIDTA Margins:

With focussed drive on premiumisation, mix improvement and successful implementation of ‘Cost Control and Cash Conservation programme, EBIDTA margins expanded by 200 bps versus previous year and the same stood at 16.6% in 2020-21.

• Finance Cost:

The finance cost which mainly comprises interest on Non-Convertible Debentures (NCDs) remained flat in the previous year 2020-21 at Rs 43 crore.

• PBT:

With PBT of Rs 724 crore in 2020-21, PBT margins improved by 200 bps over 2019-20 because of successful implementation of Five-Dimensional Growth Strategy.

• PAT:

Consolidated profits during the year under review stood at Rs 617 crore registering 24% growth over 2019-20 and indicating strong performance of your Company.

• Capital Expenditure:

Total capex excluding recognition of Right to use of assets is Rs 32 crore. This mainly includes power coating and liquid painting project, lighting automation & assembly projects and moulds for appliances.

Debt Summary:

Particulars 2020-21 2019-20
Gross Debt 480 Cr. 350 Cr.
Net Debt (895 Cr.) (239 Cr.)
Total Equity 1,931 Cr. 1,468 Cr.
Gross Debt to Equity 0.25 0.24
Net Debt to Equity (0.46) (0.16)


1. Government Schemes and Programmes: The governments initiatives such as special funding of stressed projects mainly in affordable and mid-income projects, smart city and power will provide an impetus in near future. The governments renewed focus to drive solar power in agriculture sector under Kisan Urja Suraksha evam Utthan Mahabhiyan (KUSUM) scheme is positive and opens new opportunity in solar pumps business. The efforts under ‘Jal Jeevan Mission to ensure safe drinking water to every rural household will drive demand for pumps segment. Further, the thrust on affordable housing will boost the long-term growth of the electricals consumer segment. PLI scheme incentive will stimulate manufacturing capability of white goods (ACs and LED lights).

2. Electrification & Thrust on Infrastructure: The governments focus on infrastructure development in country is expected to increase demand for electrical goods, particularly in products supplied to projects that include streetlights. Continued focus of government to improve electrification in rural areas through initiatives such as ‘Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) are creating new markets for electrical products.

3. Increasing Income: Favourable demographic indicators like urbanisation, increase in disposable income of individuals, aspiration for good quality products, growing number of nuclear families etc. are expected to catalyse the growth for electrical goods in the mid-to-long term horizon.

4. E-commerce Business: The COVID-19 pandemic has had a significant impact across various sectors. Consumer journeys are now intersecting more with the online world. Social distancing norms have accelerated shift to online buying across age and income segments leading to increased sales through e-commerce channels. These channels will also improve customer reach.

5. Digitisation and Technology: Introduction of new tech driven products will improve core customer experience. Rapid adoption of Smart and IoT-connected solutions shall be an enabler to drive business growth. Millennials who are more inclined towards technology will drive growth in this sector.


1. Economic slowdown: Sluggish growth in the Indian economy due to the current global developments could negatively impact growth in the short term. Demand for new housing has been subdued since the past couple of years which could impact demand for electrical goods. Availability of quality electricity is the key for demand of electrical products and any substantial shortfall in the supply of electricity may hamper growth prospects for the industry.

2. Impact of second wave of COVID-19: Operational efficiency will be put to test as the second wave of COVID-19 will affect availability of right resources at right place and time. Deterioration in supply chain and demand slowdown have emerged as a significant business risk. The outbreak of COVID-19 and its subsequent effect on the economy has hampered consumer spending, leading to a resurged uncertainty in the market.

Commodity Headwinds: As the Indian economy started its unlocking phase, it saw a pent-up demand for commodities, driving prices up further. However, this price increase has spooked fears of inflation in the domestic markets along with worries over increasing raw material cost for many sectors. Prices of industrial commodities, including copper, steel and aluminium have seen a sharp surge and a further rise is likely to affect growth prospects for the economy in FY22. Increasing input costs, higher commodity prices and better pricing power remains key risks to inflation and will adversely impact the consumption demand and in turn investment revival in the economy.


It has been a challenging year with several macro headwinds encompassing several industries. Slow economic activity and liquidity challenges impacted the overall demand scenario in the industry. However, your Companys costsaving measures, robust business continuity plan and strong brand proposition led to decent overall growth and a healthy balance sheet.

Your Company will continue to invest in R&D with a clear focus on adding innovative value-added products. Your Company will continue to leverage technology across the organisation with the objective of simplifying processes, inducing analytical decision-making to identify emerging trends and creating maximum value for all stakeholders. Health and safety of employees will remain a prime focus. Your Company will continue to strengthen its efforts in distribution and build a rurban sales organisation. It is also looking at new technologies such as smart IoT, energy-efficient technologies in its product lines along with sanitisation and purification applications.

Your Company aims to grow the fans and pumps segment, strengthen the lighting division, and continue to propel the growth in appliances led by water heaters, mixer grinders and coolers. Your Company also envisages opportunities in agricultural pumps. It continues to evaluate organic opportunities, which will accelerate the realisation of the business strategy and leverage and use the cash that sits on its balance sheet.

The second wave of COVID-19 that is impacting the nation along with the increasing commodity prices is expected to pose challenges for your Company. However, your Companys adequate liquidity position, surplus cash and operational efficiencies will enable it to protect its profitability and meet all statutory requirements and obligations.

Risk Management and Mitigation

A robust internal financial control system forms the backbone for your Companys risk management and governance. Your Company has established comprehensive framework for the identification and mitigation of risks. A structured risk management system permits the management to take calibrated risks, which provides a holistic view of the business wherein risks are identified in a structured manner from top- down to bottom-up approach. Your Company faces three primary risks - business risk, operational risk and external risk and monitors them regularly according to industry best practices. Your Company strives continuously to attain cost leadership, focusses expanding and strengthening distribution network to consistently delight customers with meaningful innovative solutions which has enabled it to achieve a competitive edge in the industry. The twin purpose of enterprise risk management is to minimise adverse impacts and to leverage market opportunities effectively. The objective is to sustain and enhance short-term and long-term competitive advantage for your Company.

Business Continuity Plan

Last year, your Company had successfully implemented ‘Business Continuity Plan (BCP) wherein all critical business activities were tested for their smooth functioning. With minimal cost upcharge, business operations were ramped up by strictly adhering to guidelines and government regulations. Given the importance of cash flow, your Company had launched a ‘Cost Control and Cash Conservation Programme, a dedicated programme to reduce discretionary costs, optimise spends and conserve cash to tackle the uncertainty on account of COVID-19. These measures have enabled your Company to obtain a strong financial position.

Your Company has periodically evaluated and assessed its ‘Business Continuity Plan (BCP) to factor in the regulations and initial learnings. The plan would remain focussed on 3Ps (Prevent, Prepare and Proactive) to help business navigate the financial and operational challenges due to impact of second wave of COVID-19, while rapidly addressing the needs of the employee, customers, and suppliers.

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 the 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 wifi 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 Crompton Greaves Consumer Limiteds Annual Report, 2020-21.