Anand Rathi 's research report on Crompton Greaves
Aided by cost controls, a stable EBITDA margin (13.9%) in Q1 despite a 47% y/y decline in revenues strengthens our belief in Crompton’s resilient business model. On a gradual recovery in Q1, we expect a return to normalcy by Q3 with better margins as some cost savings would be retained. `9.7bn cash after the `3bn NCD issue and tightening WC will be used to re-invest in future growth incl.
Outlook
inorganic expansion and greater localisation. Thus, we maintain our Buy recommendation on the stock with a higher target of `281 (32x FY22e P/E), earlier `270.
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