Brokerages cut target prices on CG Consumer despite positive Q3; shares up 1.5%

CG Consumer reported a 27.7 percent year-on-year increase in net profit at Rs 109.8 crore for Q3.

Brokerages trimmed their target prices on consumer durables player Crompton Greaves Consumer Electricals despite it recording healthy growth in net profit for the quarter ended December 2024. However, the bullish buy rating was maintained across broking houses.

CG Consumer posted a 27.7 percent year-on-year increase in net profit for the December quarter, reaching Rs 109.8 crore. Revenue rose by 4.5 percent year-on-year to Rs 1,769.2 crore, while EBITDA saw a strong 25.5 percent growth, coming in at Rs. 188 crore.

Despite revenue growth lagging expectations, stable demand across product categories supported the topline. Meanwhile, better cost efficiencies and an improved product mix contributed to higher profitability.

At 11.10 am, CG Consumer shares were quoting Rs 345.55, higher by 1.4 percent on the NSE, compared to the previous close.

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The firm's electrical consumer durables (ECD) segment grew six percent and lighting arm gained four percent on-year. The Fans grew in mid double-digit, with healthy growth in pumps and appliances category. Green shoots are visible in the firm's Butterfly brand with revenue decline arrested and significant EBITDA margin expansion.

Innovation and digitisation remain the key focus area with continuous product launches across categories. However, Nuvama Institutional Equities cut its target price to Rs 500 per share, from Rs 510 earlier.

PL Capital also trimmed its target price on the company's shares to Rs 504, from Rs 536 earlier, while trimming its FY26 and FY27 earnings estimates.

Butterfly was a drag on profitability since its acquisition. "We note Butterfly has achieved stable revenues as well as improved margins after multiple quarters. Crompton has also repaid the debt raised for the acquisition of Butterfly," said ICICI Securities. However, the brokerage also slashed its target price to Rs 440 from Rs 508 earlier.

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