Buy Crompton Greaves CE; target of Rs 336: Emkay Global Financial

Emkay Global Financial is bullish on Crompton Greaves CE has recommended buy rating on the stock with a target price of Rs 336 in its research report dated August 23, 2023.

Broker Research

August 24, 2023 / 17:24 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Crompton Greaves CE

We met Crompton’s senior management to understand the broad strategy and tenets to drive the company’s future growth. Key takeaways – 1) Drive double-digit topline growth by focusing on premiumization in fans, category expansion in pumps (nonresidential and agricultural) and arrest the decline in lighting by introducing new SKUs (ceiling and panel) and expanding overall reach; 2) Foray into new categories like switches, wires and cables, and modular kitchens, which have synergies with the existing portfolio; 3) Support margins by extending project Unnati to encompass indirect costs (Rs8bn); 4) Harvest synergies between BGAL and Crompton on logistics, manufacturing and after sales services; and 5) Continue to invest in branding (ad spend: 4.0-4.2% of sales) and R&D and capex (Rs0.8bn each) to strengthen the value proposition for customers and promotion spends. We re-iterate BUY with TP of Rs336 based on 30x P/E.

Outlook

However, near-term headwinds like weak consumer demand, revamping internal team structure and increased A&P spends will likely cap short-term gains, in our view. We maintain our BUY rating with a TP of Rs336, based on 30x P/E.

For all recommendations report, click here