The last year was the first completed year of operations post demerger for Crompton.Your Company was listed on 13th May 2016. A new board comprising of many eminentpersonalities in relevant domains has been constituted to guide the Company forward. Inthe year under consideration your company grew its topline by 11% and comparableoperating earnings at a faster rate of 26%.
The year under review has been good for Indian economy as a whole despite thetemporary setback of 'demonetisation' in the second half of the year which did impactmost sectors. Lower crude oil prices and good farm output have kept inflation undercontrol. This has been augmented by a relatively strong rupee on back of high FDI andportfolio inflows. Higher rural demand with a good monsoon and improved consumersentiment on back of improving macro conditions augur well for the future. The transitionto GST in the coming year will further boost business sentiment and operating environment.However such a major change could result in temporary business disruption duringmigration.
While domestic private investment has remained weak due to debt overhang thegovernment has stepped up investment in infrastructure projects related to electrificationand connectivity leading to road rail and ports development. While construction sectorgrowth is subdued government push for affordable housing can help bridge the gap in theinterim. Multiple smart city projects have been initiated which will help improve cityinfrastructure as well as create pockets for wider replication.
These programs create new and unique opportunities for our sector especially in theemerging trends of energy efficiency and connected products. Energy efficiency inparticular has emerged as an important theme in the sector with sharp penetration of LEDlighting. This was led by a higher consumer demand for energy efficient products andgovernment enablement on supply side by EESL programs. This trend will extend over a widerportfolio of Crompton's products as the technology and enabling environment develops.
With the current and impending changes in mind your Company has identified five leversto take the Company to its aspired position. These are Brand Excellence PortfolioExcellence Go-to-market Excellence Operational Excellence and Organisational Excellence.Some of the actions taken during the year under review were:
A Crompton ran an innovative and sustained brand campaign achieving the targetedoutcome in brand awareness improvement. This was first such campaign in the recent historyof Crompton and is a seed for sustaining long term growth.
A Many innovative products were developed to improve value proposition to the consumer.These include making fan usage and maintenance convenient with first-of-their-kindtemperaturesensing and anti-dust fans best price proposition while maintaining highestLumens per Watt output among the peers value added features in Battens and an industrypioneering mini air-cooler.
A The Company ran a 'Go-to-market' program to enhance shopper experience by improvingproduct availability and visibility. A pilot program with focused approach was run inLighting segment in South India. This resulted in significant gains in top-line as well aspositive feedback from the customers. In coming year the management looks to replicatethis success across all geographies and in other product lines.
A Operational improvement focused on realising higher efficiencies in operationsstrengthening the supply chain and supporting IT system for better customer service.
A The Company has instituted programs for higher employee engagement and developmentthus striving to keep raising the performance standard. This will help generate value onprocess and market side and is an investment for sustained growth of the Company.
I am proud of the progress the Company has made in its commitments made to you lastyear. The five strategic levers will continue to be the guiding path in continuousstriving for delivering better returns to all the stakeholders.
H. M. Nerurkar