Buy Crompton Greaves Consumer; target of Rs 470: Anand Rathi

Anand Rathi is bullish on Crompton Greaves Consumer has recommended buy rating on the stock with a target price of Rs 470 in its research report dated January 25, 2021.

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February 01, 2021 / 18:12 IST

26 Aug, 2025 12:21

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Anand Rathi's research report on Crompton Greaves Consumer

Driven by a strong uptick in rural/e-commerce sales, premiumisation, cost optimisation and an expanding distribution network, Crompton’s Q3 revenue/PBT were up 26%/46% y/y. In key categories (geysers, fans, etc,) it continued to gain more market-share than peers, said management. Price hikes from Jan’21 (5-8%) would help it face rising RM costs. We introduce FY23e and expect 12%/14% revenue/PAT CAGRs over FY20-23, with a~15% EBITDA margin, healthy return ratios and FCFs. Its strong net cash (Rs8.1bn) would be used to reinvest in growth, incl. inorganic expansion and greater localisation.

Outlook

Thus, we retain a Buy on Crompton, with a target of Rs470 (40x FY23e P/E, a 20% discount to Havells), earlier Rs352. A strong operating performance is key for the recent stock re-rating to be sustained.

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