TOC Sets New Industry Standards

News Release

Ambit Insights | May 17, 2018

TOC Sets New Industry Standards

Theory of constraints processes for distribution and retailing has become an industry standard and is so recognized by analysts and competing players of Bajaj Electricals where these processes have been rolled out.

In the May edition of “Ambit Insights” – a monthly equity market research note published by Ambit – a leading analyst in the Indian markets, a portion pertaining to Crompton Consumer reads as follows:

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Crompton Consumer (BUY): GTM execution is the key
In Crompton’s post-results conference call, management formally announced its Go To Market (GTM) strategy that is being implemented on a pan-India basis. GTM includes measures to strengthen distribution partnership similar to Bajaj Electricals’ Theory of constraint (TOC). Currently, GTM rollout in lighting has progressed much ahead of fans; in terms of region, implementation in South/West is ahead of North/East. Management said the rollout will be completed in 12 months and revenue growth will pick up from FY20. Given the fans market is dependent on the wholesale channel, we believe implementation may take time. So, we have cut our FY19/FY20 revenue growth estimates to 9%/14% from 22%/16%. But we remain BUYers as we believe GTM if implemented consistently across India would be very beneficial.

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