Crompton Greaves Consumer Electricals: Target Price Raised to Rs 320 by Prabhudas Lilladher
Crompton Greaves Consumer Electricals Sees Strong Growth in ECD Segment
Crompton Greaves Consumer Electricals has delivered a strong performance in its ECD segment, driven by robust growth across various product categories. The company's pumps business witnessed double-digit growth, with a significant gain in market share, alongside the launch of new products. The SDA segment also saw strong growth, driven by the popularity of air fryers and induction cooktops, while mixer grinders continued to gain market share.
The company's lighting segment grew by 14.3%, driven by strong double-digit volume growth across both B2C and B2B segments. Butterfly revenue grew 16.8%, led by the success of cookers and gas stoves, while electric cooking appliances benefited from LPG supply constraints. To mitigate commodity inflation, Crompton undertook calibrated price hikes across key categories in the ECD segment. The company is also executing solar rooftop projects and has commenced a phased retail rollout across select cities.
Crompton Greaves Enters Residential Wires Segment
In a strategic move, Crompton Greaves has entered the residential wires segment with the launch of 'Crompton Armor' in southern markets. The company is leveraging its strong brand and distribution network to drive growth in this new segment.
Outlook and Recommendations
We estimate that Crompton Greaves Consumer Electricals will achieve revenue, EBITDA, and PAT CAGR of 16.9%, 20.4%, and 21.4% respectively over FY26-28E. However, we have downward revised FY27 and FY28 earnings by 5.7% and 7.0% respectively, factoring in persistent cost pressures partially offset by price hikes, incremental costs arising from new segments, and additional expenses related to BEE norms implementation for water heaters effective July 26.
| FY26 | FY27E (Revised) | FY28E (Revised) |
|---|---|---|
| Revenue Growth | 16.9% | 14.3% |
| EBITDA Growth | 20.4% | 17.2% |
| PAT Growth | 21.4% | 18.3% |
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Based on our revised estimates, we downgrade Crompton Greaves Consumer Electricals to an 'Accumulate' rating from 'BUY', with a revised target price of Rs320 (Rs344 earlier), based on 27x Mar'28 earnings.
Investor Takeaway
Investors should consider the raised target price of Rs 320 for Crompton Greaves Consumer Electricals.
More in Market
SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
