Buy Crompton Greaves; target of Rs 240: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital`s research report on Crompton Greaves“Crompton Greaves’ Q2FY15 results were broadly in line with our expectation (however below consensus estimates) as we had factored recovery in the international business to kick off from Q3FY15 onwards. We continue to believe that Crompton would be the key beneficiary of recovery in domestic industrial capex and gradual recovery in international business margins should also augur well for the company going ahead.” “Crompton’s standalone revenue for the quarter grew 9% YoY to Rs19.0 bn (3% above our estimates). On a segmental basis, Power & Consumer segment revenues grew 6% YoY and 13% YoY – both in line with our estimates. However the Industrial system business surprised positively with +7% YoY revenue growth during the quarter. The management stated that there initial signs of capex revival were visible during the quarter. For the quarter, Crompton benefited from orders from Railways and orders for HT motors. It expects the recovery to be sustainable going ahead. On a consolidated basis, revenues grew 7% YoY to Rs 34.3 bn (in line with estimates), implying a 5% YoY growth in the subsidiaries.” “Demerger of the consumer business will unlock shareholder value and the domestic business would certainly be the key beneficiary of expected revival in industrial capex, going forward. The International business which has been a drag on the company for long is set to improve gradually from Q3FY15 onwards. At CMP of Rs 189, Crompton trades at a P/E of 16.3x based on our FY16 EPS estimate of Rs11.8 per share. We reiterate our BUY rating on the stock with a target price of 240 per share, implying an upside of 27% from current levels,” says Dolat Capital research report.

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