Comments
Target: ₹325
CMP: ₹290.15
Crompton Greaves Consumer Electricals standalone revenue grew 15 per cent y-o-y to ₹1,460 crore in Q3-FY24 at a three-year CAGR of 3 per cent. It was 6 per cent ahead of our estimates, driven by new product launches and demand uptick.
Segment-wise, revenue from electrical consumer durables increased 19 per cent y-o-y vs Havells’ 3 per cent, and V-Guard’s 11 per cent. Lighting (17 per cent) reverted after a series of subdued quarters, with 1 per cent y-o-y growth vs Havells’ 2 per cent. Alternate channels delivered robust growth of 38 per cent (eCommerce revenue doubled in Q3).
We have incorporated Butterfly Gandhimathi’s (BGAM) financials into Crompton. We lower our EPS by 7 per cent for FY24E and 4 per cent for FY25 on delay in Butterfly breakeven and continued ad expenses dragging margin. However, we raise our TP to ₹325 from ₹315 on 28x (unchanged) December 2025E P/E as we roll forward by a quarter.
With improved demand, there is a possibility of rerating as Crompton has a strong brand recall, industry-leading EBITDA margin, EPS-accretive acquisition of BGAM, and the go-to-market strategy. We expect an earnings CAGR of 17 per cent during FY23-26, with an average ROE and ROCE of 30 and 28 per cent respectively, during FY24-26.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.