Crompton plans to make lighting products in-house: Shantanu Khosla

Shantanu Khosla, managing director, Crompton Greaves Ltd, spoke to Swati Khandelwal of Zee Business about growth drivers of the business and strategy to increase margins. 

Crompton Greaves has posted a net profit of Rs 77 crore in Q2, and revenue has gone up 9% despite pressures on its lighting division. What are the growth drivers?

Crompton Greaves Consumer Electricals Ltd business has performed well and had a contribution of about 15% in the revenues of the quarter. In fact, ECD is continuing to escalate. But the cost reduction of 10-15% in the previous quarter had an impact on revenues and margins of the company. Secondly, the margins of lighting division have declined by 400-500 basis points. And we are planning to revive it over the next two quarters. It can be done by going for significant cost reduction, including the in-house manufacturing of the lighting products. 

Do you think that existing pressure can have an impact on your business? Are you planning to go for some price hikes in future?

There has been a price hike in the past one month at Crompton. Being a strong brand, Crompton can afford these hikes. 

What are your plans to improve the margins in different segments like geysers, lighting and fans among others? 

We have three elements in our programme, and they are continuous cost reduction (an important part of our business), mix (for instance, we promote the premium fans more than the economy ones) and pricing. Implementation of the programme would help us to bear with the cost pressures.