Buy CG Consumer Electricals; target of Rs 260: Dolat Capital

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Dolat Capital's research report on CG Consumer Electricals

Q4 numbers were a miss across our and consensus estimates, due to impact of March lockdown on sales, despite a strong Jan and Feb. However, margins were helped by lower costs, especially in ad expenses, which enabled CG Consumer to maintain 13.8% margins. At segmental levels, ECD margins were flat while lightning margins improved QoQ by 80bps showing a breather on price erosion in LEDs Given that Q1’20 is severely impacted due to lockdown, and recovery likely to be gradual, we trim our FY21E and FY22E estimates of sales/ EBIDTA/PAT by 26% / 34% / 34% and 22% / 26% / 26%, respectively.

Outlook

CG consumer is best primed for faster recovery within the FMEG space given its main portfolio of fans and lighting are low ticket, replacement items. Given recent price correction, we upgrade our rating to Buy with a TP of Rs 260, valuing the stock at 34xFY22E.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More