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    Buy Crompton Greaves Consumer Electricals, target price Rs 400: HDFC Securities

    Synopsis

    Crompton Greaves Consumer Electricals, incorporated in the year 2015, is a Mid Cap company (having a market cap of Rs 20043.12 Crore) operating in Consumer Durables sector.

    Crompton Greaves Consumer ElectricalsAgencies
    HDFC Securities' believe the current valuation at 25x P/E on FY25 EPS will re-rate once the earnings normalise. Various steps have already been initiated to fix the gap in the portfolio and marketing front.
    HDFC Securities has buy call on Crompton Greaves Consumer Electricals with a target price of Rs 400. The current market price of Crompton Greaves Consumer Electricals is Rs 314.95.

    Crompton Greaves Consumer Electricals, incorporated in the year 2015, is a Mid Cap company (having a market cap of Rs 20043.12 Crore) operating in Consumer Durables sector.

    Crompton Greaves Consumer Electricals key Products/Revenue Segments include Electrical Consumer Durables, Lighting Products, Scrap, Sale of services and Export Incentives for the year ending 31-Mar-2022.

    Financials
    For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1537.51 Crore, down -10.50 % from last quarter Total Income of Rs 1717.80 Crore and up 7.92 % from last year same quarter Total Income of Rs 1424.63 Crore. Company has reported net profit after tax of Rs 88.19 Crore in latest quarter.

    The company’s top management includes Mr.H M Nerurkar, Mr.Shantanu Khosla, Mr.Mathew Job, Mr.Promeet Ghosh, Mr.D Sundaram, Mr.P M Murty, Ms.Smita Anand, Mr.P R Ramesh, Mr.Hiroo Mirchandani. Company has MSKA & Associates as its auditors. As on 31-12-2022, the company has a total of 64 Crore shares outstanding.

    Investment Rationale
    On account of slow consumer demand, weak Q3, step-up investments and gradual replenishment of rated fans, we cut our EPS estimate by 20/16/13%. The brokerage's revised numbers capture 10% revenue CAGR with an EBITDA margin of ~13.5% in FY24/FY25. Crompton is among the top-3 companies in the consumer durable space (~INR 70bn revenue, >8bn EBITDA) with best in class operating profile. HDFC Securities' believe the current valuation at 25x P/E on FY25 EPS will re-rate once the earnings normalise. Various steps have already been initiated to fix the gap in the portfolio and marketing front.

    Promoter/FII Holdings
    Promoters held 2.54 per cent stake in the company as of 31-Dec-2022, while FIIs owned 39.54 per cent, DIIs 44.5 per cent.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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