Buy Crompton Greaves Consumer Electricals; target of Rs 425: LKP Research

LKP Research is bullish on Crompton Greaves Consumer Electricals has recommended buy rating on the stock with a target price of Rs 425 in its research report dated February 13, 2025.

Broker Research

February 14, 2025 / 13:41 IST

Buy

26 Aug, 2025 12:21

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LKP Research's research report on Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals (Crompton) delivered a strong operational performance in Q3FY25 with revenue of ₹17.7 bn, marking a 4.5% YoY growth. Cost optimization initiatives and a focus on premium products and innovation contributed to a gross margin expansion of 80 bps YoY, reaching 33.3% while operating profit surged by 25.5% YoY, with an improved margin of 10.6%, up 180 bps YoY, driven by strong results in the ECD segment, particularly pumps and SDA. PAT grew by 28% YoY to ₹1.1 bn. Butterfly’s revenue decreased by 4% YoY to ₹2.2 bn, however its margin saw a significant improvement of 630 bps YoY, reaching 5.5%, aided by a favorable product mix and ongoing restructuring efforts. Crompton’s consolidated sales grew 5% YoY, with ECD sales rising by 7% YoY, driven by strong growth in pumps (+19% YoY), alongside steady performance in fans and appliances. Lighting sales grew modestly by 3% YoY, while Butterfly experienced a 4% YoY decline. Looking ahead, Crompton is committed to continuing its focus on premiumization, innovation, and GTM strategies. The company aims to reignite growth in its lighting and Butterfly segments (restructuring nearing an end) by FY26E.

Outlook

Hence looking at the performance in 9MFY25, we have adjusted our margin and earnings estimates for FY25E and FY26E and introduced FY27 projections. We are rolling forward our estimates to FY27E and maintain our BUY rating with a revised target price of ₹425 (34x FY27E EPS).

For all recommendations report, click here