Celebrating the Change
Dear Shareholders,
I am pleased to present to you Butterfly's Annual Report for the
Financial Year 2024-25.
The Indian kitchen appliances industry has witnessed a dynamic
transformation, influenced by changing consumer preferences and lifestyle shifts. One of
the key trends shaping the industry is the increasing adoption of modern kitchens, which
offer seamless functionality and aesthetic appeal. This has led to a growing demand for
appliances that are energy-efficient, smart and visually appealing, aligning with the
kitchen's design ethos. Consumers prefer appliances that offer convenience, good
looks and sustainability with the willingness to premiumise. This leads to a shift towards
sleek, inclusive designs that blend seamlessly with the kitchen space.
The business was challenging last year, and there was a slowdown in
consumer demand even during the festive season. There was moderate growth in online sales
and suppressed demand in the micro-finance institutions (MFI) channel. Amidst this, we
remained focused on strengthening our fundamentals and made key structural interventions
to drive profitable business scale-up.
The improved performance in the year's second half reflects our
efforts to stabilise our business and our ambition to grow in a vastly competitive market.
The second half of F.Y. 2024-25 delivered 5.41% growth with 7.83% EBITDA while sustaining
our strong position in the South markets.
In our journey towards becoming a consumer-led organisation, we have
restructured our marketing and sales function to enhance insight-led portfolio management
and a robust go-to-market strategy that accounts for changing channel dynamics. We
successfully executed various festive campaigns, including the ‘Gifts of Diwali'
and a cause-based campaign for the Onam festival —
#FromKeralaWithLove.
Consumer at the Core
In sync with our motto of being close to the consumer, we have launched
a new series of products ‘Idea First Series', that will offer consumers a
first-of-its-kind interaction with a kitchen appliance. These products are conceived with
a deep respect for consumers' ingenuity and practical wisdom, embodying a modern
experience that reflects their evolving needs and aspirations. We have also outlined our
near-term and long-term product pipeline to sustain our position and build better loyalty.
Strategic Initiatives and Operational Excellence
We exemplified our unwavering commitment to quality by launching the
‘Good for Lifetime' programme, which enhances our quality processes across
in-house and sourced products. This initiative underscores our dedication to delivering
enduring value to our customers. We have strengthened our commercial hygiene and
governance frameworks, improving value chain management and enhancing profitability.
In line with our omnichannel strategy, we have also optimised our
portfolio balance between offline and online channels, ensuring efficient allocation of
advertising and promotional spends to maximise return on investment.
Future-ready Talent Pool
In our endeavour to cultivate an agile and empowered workplace, we have
rolled out an employee engagement survey, and improvement actions are currently underway
to address the insights gathered. Additionally, we have enhanced our training programmes
to cover functional and behavioural skills, ensuring that our workforce is equipped to
excel.
Furthermore, we have introduced various health initiatives to promote
employee well-being and enhance employee benefits, reinforcing our commitment to
supporting our most valuable asset— our people. In alignment with our strategic
objectives, we are harmonising our tools and processes with Crompton to foster consistency
and efficiency across operations. Additionally, we are leveraging our combined talent pool
to explore cross-functional synergies, preparing both teams to navigate an increasingly
competitive market landscape.
Performance Highlight
Total revenue for F.Y. 2024-25 stood at H86,450.15 Lakhs with EBITDA of
7.56%. The key categories delivered moderate growth in the second half of F.Y. 2024-25.
However, our auxiliary categories declined as we took a calibrated
approach towards product portfolio and trade spending to enhance profitability. Measured
price increases and channel optimisation resulted in improved gross margins. Our frugal
approach to investments and ROI- led A&P to help expand the EBITDA margin by 351 bps.
Our cash position as of 31stMarch 2025 is H966.70 Lakhs.
Looking Ahead
Moving forward, we remain optimistic about expanding our growth
horizon. Our growing portfolio emphasises the need for innovation and consumer-first
features. With this, we aim to make the time spent in the kitchen more enjoyable,
effortless and enriching. This urge to understand specific consumer needs drives us to
lead the kitchen space strategically and sustainably. The positive response towards our
products and their consistent offtake across channels is a testament to the preference for
Butterfly products. It gives us the confidence to embrace change, navigate industry
dynamics and stage a turnaround in the days ahead.
We remain grateful to all our stakeholders for their continued support
and trust in the Butterfly brand.
| Regards, |
| P M Murty |
| Chairman & Independent Director |