Butterfly Gandhimathi Appliances Ltd.

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Key Highlights Of ButterFly Gandhimathi Applianced Ltd.

  • Butterfly stands among the top 3 manufacturers of domestic kitchen appliances in India
  • It has a market leadership position in South India and a 10% market share across the nation
  • An aesthetically designed tabletop wet grinder, TWG – Celestra, was launched during FY22
  • Butterfly touched ₹1000crs in revenue, having a CAGR of 18% over the past six years
  • FY22 concluded with Crompton acquiring Butterfly

The Indian Appliance Industry

  • India’s kitchen industry ranks among the top five countries in terms of market volume
  • TTK Prestige Limited, Bajaj Electricals Limited, Stock Craft Limited, Butterfly Gandhimathi Appliances Limited, and Frank Fever India Limited are significant players in this industry
  • On a regional level, this market has been classified into North India, West & Central India, South India, and East India, where South India currently dominates the Indian kitchen appliances market
  • The household appliances market’s revenue amounts to $68.75bn in 2022, and the market is expected to register a CAGR of 5.68% between 2022 and 2027
  • The government has eliminated import taxes of 5% on metallurgical coke, 2.5% on coking coal, and 2.5% on ferronickel, which appears to benefit the sector
  • The Indian Consumer Electronics and Home Appliances market is estimated to grow by $2.12bn during 2021-2025

A Home of Modern Appliances

Butterfly Gandhimathi Appliances Ltd. (NSE: BUTTERFLY) is a leading manufacturer operating in the domestic kitchen stainless steel appliances industry. It enjoys market leadership in South India with a 25% market share and a 10% market share across India. It is among the top 3 manufacturers of domestic kitchen appliances. BGMAL has come a long way in providing homemakers with products for more than 50 years, trying to make our homes a better place to live. With cutting-edge production facilities, a dedicated R&D division, and in-house tooling and molded die-making capabilities, the company is one of the very few integrated producers of household appliances in India. This ensures consistency in product design and quality. The purchase of BGMAL by Crompton in February 2022 represents a new turning point in the company’s history, with plans for exceptional growth accompanied by positive business developments.


Butterfly Gandhimathi Appliances Ltd, a leading domestic kitchen and electrical appliance manufacturer, was founded by the late Shri V. Murugesa Chettiar. He was from a small town in the industrial belt of Coimbatore. Mr. Chettiar’s ancestors were metal merchants involved in the brassware business and had trading bases in Bombay, Calcutta, and Vijayawada. Brass was considered the magic metal in the late 1950s. Mr. Chettiar broke new ground with his first product, a humble tumbler made from stainless steel. With this innovation, Butterfly Gandhimathi came into existence. The skills inherited by Mr. Chettiar and his sons paid off well over the years. Butterfly has served Indian households for more than 50 years and was the first company to introduce India to stainless steel cookers and vacuum flasks.

Industry Analysis

The market for household appliances is anticipated to rise at a CAGR of 10.1% to $818.87bn in 2026. Region-wide segmentation in the global home appliance market includes North America, Europe, the Caribbean, South America, the Middle East, Africa, and Asia. North America accounts for a considerable portion of global sales of household appliances. The Asia Pacific market is anticipated to account for a sizable portion of the worldwide market by 2031, projected to see a CAGR of 6.1% over the forecast period.

Players in the international home appliance market include Whirlpool, Midea, and Haier. These companies hold ~15% of the global market. The largest market is in Asia-Pacific, which makes up over 60% of the worldwide market. Smart appliances result from technological improvement, which is anticipated to fuel market expansion throughout the upcoming years. Smart appliances are more energy-efficient and offer cutting-edge functionality. Consumers are more likely to replace their existing appliances with more innovative models due to rising disposable income, high living standards, and a desire for comfort, which is also anticipated to drive up market demand. India is among the top five countries in the kitchen sector in terms of market size. This market has been divided into four regional segments: North India, West and Central India, South India, and East India. The Indian Consumer Electronics and Home Appliances market is estimated to grow by $2.12bn during 2021-2025, progressing at a CAGR of 1% in the forecasted period.

Business Model

From just a handful of basic kitchen utensils, Butterfly Gandhimathi today manufactures a comprehensive range of home appliances, kitchen products, and cookware. The company has its headquarters and factory in Tamil Nadu. The company has around 25,000+ retail points with 500+ retail outlets. The company has gained certifications from government departments, conforming their products to be of high standards.

Butterfly Gandhimathi sells its products through distributors like e-commerce platforms, modern retail stores, direct dealers, and oil marketing companies such as Indian Oil, BPCL, and HPCL. With a multi-plant, multi-modal, indigenous production capability, operating on SAP platforms, and utilizing a rigorous, five-stage quality control system, Butterfly is one of India’s few integrated kitchen appliance manufacturers. A dedicated R&D wing, spearheads the company’s robust, innovation-led product development, with almost 80% of the products manufactured in-house. During FY22, efforts were made to increase efficiency by installing new machines at the motor manufacturing line of the Mixer Grinder facility at the Urappakkam plant, enhancing production from 6,000 to 9,000 units per day. The company’s solid online presence provides clients with cutting-edge products, a “value-for-me” proposition, and an impeccable and easy purchasing experience. Density is necessary to maintain agility as localization replaces globalization in channel and supply chain reconfigurations based on demand. Following this, BGMAL increased its footprint in the hinterland and underserved Tier 2 and non-metro markets by leveraging its pan-India presence and a well-established channel network.

Butterfly registers for 10% of the domestic appliances market in India and is among the leading manufacturers. Despite pandemic interruptions and rising raw material costs, the company recorded its best sales during FY22. A buffer against regional disruptions and business vulnerabilities would be provided by the company’s multi-plant operations, market expertise, strong brand credentials, and a commendable track record of financial responsibility. These factors would also give the company the headroom it needs to meet its chartered growth target.


The company is one of India’s few integrated manufacturers of household appliances, with cutting-edge manufacturing facilities, a dedicated R&D wing, and in-house tooling, mold, and die-making expertise that ensures consistency in product design and quality. BGMAL primarily serves domestic household consumers.

Crompton Acquisition

The most noteworthy event of the year was the acquisition of BGMAL by Crompton. The company has acquired Butterfly’s 98,33,754 equity shares, 55.00% of the equity share capital, through the stock exchange settlement process, resulting in it becoming the holding company. Due to this, the erstwhile promoters resigned, and new directors were appointed to the board. The acquisition aligns with Crompton’s long-term vision of becoming a leading pan-India kitchen appliances player. The roadmap for the company is for market expansion by leveraging the synergies of the Crompton channel, building a robust pan-India presence, and innovative consumer connect programs.

Differentiating Strategies

Diversified Product Portfolio

BGMAL has served customers with a wide range of products and established strong distribution channels over the years. During the fiscal year 2021-22, Butterfly expanded its product portfolio by launching 20+ new innovative and segment-specific products, besides refreshing the product suite with functional and aesthetic improvements. The company has focused on media and advertisements in the past financial year to grow exponentially with a robust demand pipeline.

Integrated Distribution Network

Online sales increased significantly over the previous year owing to the deployment of creative online shopping modules for consumer engagement and outreach. They targeted brand-building efforts on the OTT Platform. By leveraging its pan-India presence and a well-established channel network, BGMAL increased its footprint in the hinterland and underserved Tier 2 and non-metro markets.

Geographic Diversification

South India, where BGMAL has a substantial market share, accounts for most of the company’s revenue. In line with its strategy push for growth and a presence across the country, it has expanded its geographic footprint in India’s North, East, and Western regions over the most recent fiscal year.

Targeting New Markets

BGMAL is constantly striving to increase its market share across India and overseas. To grow, it expanded its geographic footprint in the North, East, and Western areas of India, keeping with its strategic push for growth. The company aims to utilize Crompton Greaves Consumer Electricals Limited’s complementary synergies and extensive distribution and marketing channels to penetrate the high-potential markets further. BGMAL has created an ambitious roadmap for the fiscal year 2022–2023 with its aim of a pan-India market expansion.

SWOT Analysis


  • The company has its own ‘State of Art’ manufacturing facility, equipped with the latest technology, ensuring proper product quality control.
  • Having 25,000+ retail points and over 550 distributors is an absolute advantage for the company, which helps it provide post-sales service to its customers and create an enhanced brand image.


  • Failure to estimate the seasonal demand timely and prepare for it is a big challenge for the company, which translates into high operation costs.
  • Steel and aluminum prices, which make up two of the most crucial input materials, are volatile, making the operating margin fragile. Any sharp movement in their prices could influence the overall margin.


  • The number of nuclear families has increased the volume of appliances sold, which expands the total industry catered by Butterfly.
  • Urban customers are now considering appliances as lifestyle products resulting in escalated demand for modern and fancy appliances.
  • The increase in 0% finance schemes, credit cards, cashback schemes, and affordable monthly installment payments have changed consumer perceptions and made those expensive products affordable.


  • The industry is highly fragmented and has cut-throat competition; adding to that are the international companies entering the sector, further intensifying the competition.
  • Some competitors entering this industry, attracted by the growth and returns, are sourcing low-value quality products from China, causing distortions in prices and demand.

Michael Porter’s 5 Forces Analysis

  • Barriers to Entry
    Many competitors have emerged over time in the home appliance industry, lured by its growth and returns. Importing cheap products from China has made it easier for competitors to participate in the Indian market to accomplish their short-term profit-making agendas. Though the barriers to entry in this industry are low to moderate, sustainability is still a question.
  • Bargaining Power of Suppliers
    For over 50 years, BGMAL has created a loyal brand image and a large ecosystem of trustworthy suppliers. Despite good business relations, BGMAL is significantly dependent on its suppliers for raw materials used extensively in manufacturing their products and is greatly affected by price fluctuations. Thus BGMAL has low bargaining power over its suppliers.
  • Bargaining Power of Buyers
    Due to intense competition, it is nearly impossible for BGMAL to hike prices as consumers can easily switch to their competitors, which gives buyers high bargaining power. The company aims to provide consumers with a comprehensive portfolio of products.
  • Threat of Substitutes
    BGMAL has patented technology and low substitution possibility because of high-quality differentiation. Though brand migration of customers is low, it is probably because of the emergence of escalated AI-embedded technologies as a new game changer.
  • Rivalry among Competitors
    The kitchen appliance industry has seen enormous growth in the past few years, leading international brands to enter, making it challenging for BGMAL. Moreover, the growing trend of modular homes, the increasing population of tech-savvy consumers, and the availability of a wide range of appliances are resulting intense feuding among brands.

Financial Analysis

Operating Profit Margin

Butterfly faced major movements in its operating profit margin in the last two fiscal years, with a sharp decline of 37% in FY22 due to growing raw material expenses, which rose by ₹1,907.62lakh, inviting higher product costs. This also impacted the interest coverage ratio and placed the company under long-term strain.

Revenue Analysis

As shown below, BGMAL’s revenue has been steadily increasing since 2018, reaching an all-time high of nearly
₹1,000 crores in FY22. The company’s policy of releasing a new product every year has worked in its favor. Moreover, the relentless focus on improving debtor days has yielded results. The increased revenue can also be justified by the substantial discounts provided to customers.

Debt to Equity (D/E)

Butterfly aims to maintain a low D/E ratio which can be observed in the financials, except for FY22, when it significantly grew by ~ 77% due to increased short-term debt, as claimed by the company. The company’s total debt and equity stood at ₹5,331.95lakh and ₹23,500lakh.

Cash Flow

BGMAL’s net cash flow has stayed negative for a few years but gained an upward trajectory in 2021. Operating activities provided primary positive cash flow, resulting in a positive net cash flow in FY21 because of high revenue numbers. Unfortunately, by the end of FY22, the net cash flow fell by 200% resulting from negative investing and financing activities throughout the year.

Risk Analysis

  • Global Economy Risk
    Due to COVID, the world economy has suffered a hit, which has led to a fall in global financial circumstances. BGMAL purchases items from China. However, until it switches its sourcing needs to India, the company may be impacted by the rising hostilities between India and China.
  • Foreign Exchange Risk
    BGMAL also exports its product to many countries like the U.K., Sri Lanka, the USA, etc. It analyses the effects of foreign exchange rate variations by determining its exposure to exchange rate risks. The company’s policy is to hedge all of its trade payables. It has hedged 57.05% of its foreign exchange exposure, thus minimizing currency risk.
  • Raw Material Price Risk
    The cost of raw materials is essential for BGMAL because the company must import materials like ABS plastics and stainless-steel motors. Reduced profit margins might result from any change in the cost of their product’s essential components.
  • Regulatory Risk
    Companies engaged in international commerce are significantly impacted by government regulations linked to international trade. BGMAL is involved in exporting and importing its products and raw materials. As a result, it is critical for the company to monitor any modifications or the introduction of new guidelines and act appropriately.
  • Financial Risk
    There is a chance that a company’s cash flow could prove insufficient to meet its obligations in the event of financial risk. The company faces market risk, credit risk, and liquidity risk. BGMAL has adopted a risk management policy that addresses the risk associated with financial assets and liabilities.

Environmental, Social & Governance


Innovative products by BGMAL have been created with ecology, energy efficiency, and fuel conservation in mind, particularly in LPG stoves and power-saving smart kitchen equipment. The company has taken steps to lessen its influence on the environment by using recyclable plastic covers, less thermocol, introducing stainless steel water bottles to replace plastic ones, and environment-friendly waste management.


The CSR committee of Butterfly has adopted guidelines that outline the objective of catalyzing economic development that positively improves the quality of life for society. It aims to be responsible and create a beneficial effect through its activities on the environment, communities, and stakeholders. During FY22, the company spent ₹10.29lkh on CSR activities initiating education, environment, and social development projects.


The company has established committees as a matter of good corporate governance practice and per the requirements of the Companies Act, 2013, and SEBI Regulations, 2015. BGMAL has Mr. P. M. Murty as the Chairman and Mr. Rangarajan Sriram as the Managing Director, with 9 Non-executive directors, including both independent and non-independent directors.

COVID-19 Impact

The Covid-19 crisis has severely affected the industry, and the impact is quite visible in the company’s books. The losses in the last two fiscal years have brought a question of survival for the company. The second pandemic wave and the resultant lockdown disrupted operations and dampened the appliances market. Though situations are normalizing, the impact of the deadly pandemic is still being witnessed. Even though BGMAL’s manufacturing facilities achieved record production, which increased revenue by 13.50%, the profit after taxes fell by nearly 50%.

End Note

Butterfly has continuously expanded its brand name through e-commerce platforms and more brand displays in supermarkets and retail stores. As observed, the company leverages its constant introduction of new products yearly to provide consumers with cutting-edge, high-tech goods. Although BGMAL faces weak financials, the company keeps recording high revenue margins. The roadmap for the company is for market expansion by using the synergies of the Crompton channel, building a robust pan-India presence, and innovative consumer connect programs. The company’s share price has faced a significant movement of 155.2%, a major increase due to the anticipation of the Crompton acquisition that escalated investor confidence in the stock.

Do you think Butterfly Gandhimathi Appliances Ltd. will prosper post-Crompton acquisition, or will its financial situation remain dire?

What is the product portfolio of Butterfly Gandhimathi Appliances Ltd?

Butterfly Gandhimathi Appliances Ltd offers a wide range of kitchen appliances, including gas stoves, mixer grinders, pressure cookers, and more.

How has Butterfly Gandhimathi Appliances Ltd performed financially in recent years?

Butterfly Gandhimathi Appliances Ltd has been performing well financially, with consistent growth in revenue and profits in recent years.

What is the competitive landscape of the kitchen appliance industry in India?

The kitchen appliance industry in India is highly competitive, with several key players like Bajaj Electricals, Philips, and Preethi Appliances competing with Butterfly Gandhimathi Appliances Ltd.

How has Butterfly Gandhimathi Appliances Ltd adapted to changes in consumer preferences and behavior?

Butterfly Gandhimathi Appliances Ltd has adapted to changes in consumer preferences and behavior by launching new products, expanding its distribution network, and investing in digital marketing.

What is the vision and mission of Butterfly Gandhimathi Appliances Ltd?

The vision of Butterfly Gandhimathi Appliances Ltd is to be a leading brand in the Indian kitchen appliances industry, while its mission is to provide innovative and high-quality products to customers.

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