Motilal Oswal Initiates Coverage on Crompton Greaves Consumer Electricals with Buy Recommendation, Target Price Set at Rs 350

Motilal Oswal Research Report: Crompton Greaves Consumer Electricals

Key Highlights

• Crompton Greaves Consumer Electricals' (CROMPTON) total addressable market (TAM) has expanded to over INR1.63 trillion, effectively doubling its market opportunity, following the company's entry into solar pumps, rooftop solar, and residential wires.
• CROMPTON is the #1 player in fans, #1 brand in residential pumps, #2 in water heaters (general trade), and a top-three brand in kitchen appliances (Butterfly) in South India.

Market Opportunity

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• CROMPTON's core TAM stood at INR770 billion, comprising fans, residential & agri pumps, lighting, and appliances (LDA & SDA), including kitchen appliances.
• The company's entry into new segments has expanded its TAM, with fans remaining its primary growth engine.
• Premium products (BLDC and premium induction) now contribute approximately 25% of the mix, targeting 40% over the medium term.

Demand Outlook

• Channel checks indicate proactive inventory build-up ahead of the summer season, signaling improving demand confidence.
• Price hikes of 2-3% taken in January-February 2026 are expected to partly offset input cost pressures, with further hikes expected in the coming months.

Financial Projections

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• We expect CROMPTON to report a revenue/EBITDA/PAT Compound Annual Growth Rate (CAGR) of 8%/14%/17% over FY26-28.
• We estimate its Operating Profit Margin (OPM) to expand to 11% by FY28 from 10% in FY26.
• The company trades at 29x/24x FY27E/FY28E Price-to-Earnings (P/E) ratio.

Recommendation

• We reiterate our BUY rating with a Target Price (TP) of INR350, based on 33x FY28E Earnings Per Share (EPS).