You've spoken a lot with respect to the solar ramp-up in the past and you also wrote in the presentation that you've seen a reasonable amount of growth in solar pumps. So, what's the kind of contribution that this portfolio's had in FY26? And in terms of ramp-up, just wanted to understand in FY27 what sort of the ballpark kind of contribution do you expect from this portfolio will be for your overall top line?
The way that we deal with the solar business is in two parts and they sit in separate PLs within the company. Solar pumps, if you recall, we started with a Rs. 20 Cr revenue 3 years ago, then it doubled to Rs. 200 Cr. And this year, significant growth over that Rs. 200 Cr. Insofar as the solar rooftop business is concerned, the solar rooftop business when we started, we quickly managed to increase our order book to order of magnitude about Rs. 500 Cr. As we've disclosed, the order book comprised about 38,000 units in Andhra and some more in Telangana. We have already executed about 5,000 homes.
On the new segment, the Rhion premium part. What is the sourcing strategy and which product segments would be present in here? Would it be more in-house or outsourced?
I don't want to -- I'm just announcing the plan now and the creation of the PL. What I can tell you is that the products that are coming out of Rhion are products that we have been developing over a period of time in our innovation centre. They'll either be distinctive looking or cutting-edge technology or both. I think, the good news is that we've made considerable progress in this area and in course of time, there will be products that will come in this segment, which come out of different parts of our PLs as well. I can't tell you more just now, Indrajit.
On the new segments that are already operational -- solar pump, solar rooftop and wires. What kind of top line could we estimate in the next couple of years? And is the margin broadly similar to the erstwhile ECD segment or materially different?
I gave you a sense of the kind of order book that we have in solar rooftop. Solar pumps, we've given you a sense of the kind of trajectory. We'll see how that trajectory evolves. And wires is something that we've started selling in the market just now. I would not speculate so much, and if you don't mind, we'll not talk about what kind of revenues will come in each one of these businesses. But I do want to say this that, the ROCE in these businesses is strong and that is because Crompton has a right to win. We don't enter a business unless we believe that we have a right to win. So, profit margins at an EBIT level, especially after the ramp up a little bit, are pretty robust.
For FY26, could you give some sense on category-wise growth in ECD? If not, at least which categories have delivered growth, and which have seen pain?
Across every product in ECD, we have gained share. The strongest growth in ECD has come from SDA where the growth for the year is early 20%s, last quarter close to 30% growth. Insofar as our fans business is concerned, we've grown market share. The BLDC range growth has, as a consequence, stepped up significantly. Insofar as Pumps is concerned, Solar Pumps I've already told you that it's doubled. Residential pumps was quite tepid -- we broadly maintained our market share. Agricultural and Speciality pumps grew in the teens. LDA, again not a great year for LDA at all because, as you know, summer was very tepid. There was heavy rain. In water heaters, we are the second largest player in GT. Air coolers, we and most of the market were stuck with heavy inventories.
With respect to margins -- given the new categories, R&D, A&P investments, how do you see the margin trajectory over the next couple of years? Do you see it going back to historical levels or do you think the improvement will be more gradual?
For margins in the near-term, obviously, everybody is kind of struggling with the fact, that there has been a sharp increase in input costs, which we are trying to address by passing on the cost to the consumer. Over a period of time, as the turbulence that we are hoping is episodic because of the war, as that settles down, I think margin should go back up. What speed they will go back up I cannot tell you. The stepped-up investments are already in the book. For a company of our size, we are spending annually about Rs. 100 Cr in R&D and innovation. A consistent theme in Crompton, not for the last 3 years, but for the last 10-12 years has been premiumization.
Would it be possible to share the breakdown of the ECD segment especially the broad breakdown? Given more segments getting added, useful to understand contribution from new segments versus growth in existing ones, e.g., rooftop solar.
I'm sorry, we don't really break that down. Kaleeswaran A.: We don't typically share, Pulkit. Today we have 3 segments as lighting, Butterfly and ECD. And within ECD, we see largely the growth opportunities are across the segments. As and when solar becomes a meaningful business, to the size at which we are operating a lighting or a Butterfly for us to materially impact the results, we'll start calling that out separately. We have already called out our aspiration in solar as a portfolio that we want to build a Rs. 1,500 Cr business in the next 3-4 years. Promeet Ghosh: I didn't say Rs. 1,500 Cr, I said Rs. 2,000 Cr.
I just want to know for the Rhion that has been launched, what will be our go-to-market strategy?
Please give us a little bit of time, we will come back. As you can imagine, when you launch more premium products, the business that the premium segment go-to-market comprises EBOs, MBOs, large format retail, e-commerce at a very broad level. The good news is that we had invested -- the business itself was not very large scale, which I think will change going forward. We had invested in building out an EBO platform for our LKA business. So, that's something that the Rhion brand would be able to significantly leverage off. We already have order of magnitude about 70 EBOs, which are running in the country. The share of MBOs, EBOs, LFR, e-commerce tends to be higher in premium products.
Our idea was to leverage Crompton's distribution network to expand Butterfly's business in non-South markets and we had also opened warehouses in these regions. Now it has been almost a year, could you provide some quantitative colour on how Butterfly's business has scaled in non-South markets?
Our focus on Butterfly has first been strengthen the core and really the effort of the last one and half years has exactly been this. We are a leading player in kitchen appliances in South India and that is where a bulk of our cash flows, our profitability, our brand recognition comes from. In the coming year, the focus will be on gaining traction in Butterfly, in other parts of the country, in North-East-West (NEW), so to say. There are various parts of Crompton which Butterfly will leverage out of, things like a huge service network, the fact that Crompton is a broadly very, very well-known brand and so on. What we would do in Butterfly is that we are starting in certain markets where we hope to gain material traction and then you will see this get rolled out in other parts of the country.
On the kind of cost inflation that we are seeing -- there have been sharp price increases that have also been taken. Just want to see the connect between cost inflation seen and price increases taken. Do you think that we have largely passed on the kind of inflation that we were seeing in the last few months?
Yes, very fair point. Because of the war, there have been cost inflation as well as availability issues in several of our products. So far, we have largely managed this by managing cost, but also passing on price increases into the market. In the last year since the war was launched, we have passed on two price increases into the market, in our ECD business, and frankly, those price increases have been ahead of competition. I am hoping that competition, rather than playing the pricing game, will now also start to see that the impact of the war is not going to go away anytime soon. We have a war room which is dealing with this on almost a weekly basis, if not a daily basis.
Any numbers that you can put to it? What kind of cost inflation would we have seen? And these two price increases cumulatively, how much would they account for?
So, if you look at it for Q4 or even cumulative for last year, we've taken about 7% to 8% price increase in our lead category like fans. A large part of that coming in Q4, by and large, offsetting the material cost inflation that we had. But subsequently, we are seeing further material cost inflation happening in April. A large part of that, we have tried to offset through pricing combined with some cost activities also, that we have taken as part of Unnati. Some of these benefits could be back ended.
On lighting -- you've had a reasonable top line growth, but we've seen some dip in margin. What explains that? And how should we look at this business going forward?
We have made a very concerted effort over the last 3 years to fundamentally change the trajectory of our lighting business. In B2B, we have changed the kind of contracts that we used to take on. The share of government-related contracts has declined by nearly 500 basis points last year. In B2C, the product mix has changed hugely. We used to be a Lamps and Battens company. Now we are actually a Panels and a Lamps and Battens company together with a range of other products like flood lights. We have also changed dramatically our supply chain in lighting. So earlier, the constant discussion about Crompton was, is there going to be a constant price erosion in our lighting business. Now I think we've managed to address those issues. We are growing strongly in the teens now and we also have robust profitability. Insofar as margins are concerned, we are now supplementing our profitability with more money back in the brand. If you look at year-on-year, the margin is roughly the same and that's after a materially higher investment in ad spends during this quarter.
On Butterfly, now we have taken a big write-off so what is the tax break, first of all, available on that? And earlier the thought process was to merge Butterfly with Crompton. So, any change in plans? Also, when do we see the national rollout for the wires happening? And from July we are going to see BEE norms getting implemented in geysers/water heaters -- what will be the cost increases plan and how do you see the readiness of industry as well as Crompton?
The write-down of Butterfly valuation -- Butterfly value has nothing to do with our plans to merge the companies. So, in fact, this certainly does not delay or adversely impact any merger that we may have. At the right time, definitely that is on the cards and that is something that we have announced in the past also. Shaleen Nayak: The launch did start with Tamil Nadu and Karnataka. We will ramp up throughout the country. It will not be spread over the entire year, and we will not restrict our distribution to select towns or cities but seek to leverage the maximum extent of Crompton distribution that we have nationwide. Rajat Chopra: As per our preparedness for the BEE for water heaters are concerned, I think we are fully prepared. We have already done the required changes in the product category. In terms of cost, there will be some changes, but that we are planning to mitigate and also maybe pass on to the market. Kaleeswaran A.: We are saying there is no tax impact on account of this. This is not a write-off. This is an impairment that has been done in line with the accounting practice. So, this is a test of value of an asset.
When we go on the ground, we're just hearing initial signs of stress in terms of payments being delayed from the last leg of the value chain (contractors, builders). I would want to know if this observation is correct. And on a similar line, would want to know if we do any kind of channel financing?
One of the strongest points of our business metrics and financial metrics is cash flow generation. You would have seen that it continues to generate a good amount of cash, even in FY26 crossing Rs. 500 Cr. In terms of how we are looking at the overall value chain on collections, our debtors in traditional trade kind of remain the same. There is no major change compared to last year to this year. In terms of solar pumps, which is the business that we do with government, the collections are moving in line with what is our expectation that we have with all the contractors with a very good ROCE coming in. So, we don't see any specific challenge in the categories that we operate in at this point of time. Promeet Ghosh: Builders and contractors, our exposure there is relatively small.
On kitchen industry and Butterfly -- in ECD industry, gross margins have seen slight pressures due to raw material inflation. In kitchen appliances segment for Butterfly, are we seeing similar pressures? Would this continue in the near long term? And are we passing on the cost increases fully or absorbing some cost?
Cost increases are across the board. All products are facing cost increases. The kitchen is no outlier. In kitchen, as well, it is inevitable that we add on -- pass on these cost increases to the consumer. The extent that we are able to pass on these cost increases depends on whether the consumer is willing to pay and whether your competitors are doing the same. Our preference has been to pass on price increases. Many of our products are only partially discretionary. So, if you need a fan, you need a fan. The people who are buying it because they don't need it are anyway people who can afford to pay. So, when prices go up, there's a sticker shock. Then in 2-3 days he'll realize Rs. 2,200 is not coming down, it is only going up, then he'll come and buy. You've also taken price increases in Butterfly, again similar price increases as Crompton ECD has taken.
Butterfly enjoys leadership in grinders and gas stoves. As we grow, according to you, which categories are evolving as being the next category leaders and have the potential to gain leadership?
We have a very strong leadership in gas stoves in South and gas stoves being our lead category, we will focus our energies in terms of taking the lead and moving forward in NEW and emerge as a category leader at a national level with respect to gas stoves. With respect to mixer grinders, we're also looking at stepping up another category within the mixer grinders, which is basically mixer grinders plus plus. Maybe it could be a food processor or a juicer or anything plus that comes from a mixer grinder. Apart from that, there are new emerging categories in kitchen that we are looking at, some of it which have already taken off, for example, air fryers where the penetration is low and the growth is very high. Even in case of chimneys, where you have a decent growth coming in from a low penetration category.