ICICI Securities research report on Crompton Greaves Consumer Electricals
Crompton has done key fundamental changes to its business under strategy 2.0 which are likely to be DCF accretive in our view. (1) it plans to divide the business in multiple SBUs which will likely drive the accountability and improve efficiencies, (2) there will be separate on-ground sales teams for multiple product(s). It is likely to result in stronger connect with the trade and higher throughput-per-store, (3) Crompton has plans to premiumize the portfolio and believes Crompton and Butterfly brands have potential to drive premiumization, (4) There will be higher focus on E commerce and digital and (5) it plans to enter multiple new categories such as switches, switchgears, wires and cables and other adjacent products.
Outlook
We remain positive and maintain BUY rating with DCF based TP of INR 350.
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