Buy Crompton Greaves Consumer Electricals; target of Rs 423: Prabhudas Lilladher

Prabhudas Lilladher's research report on Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals (Crompton) ECD segment modest growth of 5.7% with fans reporting a moderate volume growth in FY25 while solar pumps reported a strong quarter. Lighting segment declined by 1.8% while EBIT margin expanded (+700bps) due to better product mix. Butterfly business has reported a strong quarter driven by pricing actions, margin improvements and sequential market share gains in few categories. Company has announced its entry into the solar rooftop category. It has announced greenfield capex of Rs 3.5 bn first phase of which will be focused on the fans with plans to upscale operations going forward by adding other production lines and expanding capacity.

Outlook

We estimate Revenue/EBITDA/ PAT CAGR of 13.6%/16.3%/19.1% over FY25-27E. We downward revise FY26/FY27E earnings estimate by 2.8%/2.5% and maintain ‘BUY’ rating with revised TP of Rs423 (Rs 440 earlier), based on 35x FY27E earnings.

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