Buy Crompton Greaves; target of Rs 260: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on Crompton Greaves

CRG reported 16% growth in sales (excise adjusted), led by 20% and 15% YoY surge in lighting and fans segments, respectively. On account of sharp focus on premiumisation, the share of premium fans in total fans revenue jumped to 18% (16% in FY17). Despite the non-cash ESOP charge of INR141mn during the quarter (INR 281 mn in H1, which management expects to be lower next year), CRG’s margin expanded 100bps due to cost efficiencies and reduced ad spends.

Outlook

Apart from sustained margin expansion over the past 4 quarters, cost efficiencies and premiumisation focus have helped CRG gain operational excellence (especially on cost front) in its existing business. We perceive potential strategic entry in the white goods as a key valuation driver. At CMP, the stock trades at 30x FY19PE. Maintain ‘BUY/SO’.

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