Crompton Greaves Consumer Electricals Ltd. share price target

Crompton Greaves Consumer Electricals Ltd (CGCEL) reported PAT of INR 80 crore for Q3FY19 (beats our estimate by 11.9% but came largely in-line with street estimates).

At 35x Dec-20 EPS, our TP is at Rs 297 (earlier Rs 295). We reiterate BUY. Crompton reported an in-line quarter marked with consistent solid performance in ECD and partial recovery in lighting margins. Net revenues grew by 10% (exp 11%) driven by premium fans and geysers. EBITDA/APAT grew by 8/15% (exp. 10/15%).

Crompton Greaves Consumer Electricals (CGCE) reported mixed set of numbers in Q2FY19 which was marginally lower than our estimates. Its revenue grew by 8.1% yoy led by 14.6% growth in the Electric Consumer Durables (ECD) segment. However, margins were impacted due to continuous price erosion and higher commodity prices in the lighting segment.

Crompton Greaves Consumer Electricals Ltd. (CGCEL) net sales grew by 8.1% y-o-y and 4.6% above our estimates in Q2FY19

We model 19% EPS CAGR over FY18-21E. At 35x Sep-20 EPS, our TP is at Rs 280 (earlier Rs 291). We reiterate BUY. Crompton reported a mixed bag with beat in ECD and a miss on lighting performance. Cromptons revenues grew by 8% (vs. exp of 10%). Lighting revenue contracted by 4% (ex-EESL 14% growth) while ECD was up by 15%. EBITDA growth (3% vs. exp of 13%) was muted owing to margin decline in lighting business.

CG Consumer Electricals (CGCEL) has delivered an in-line performance in 2QFY19 aided by strong growth in Electrical Consumer Division (+14.6% YoY) offset by poor performance in lighting segment (- 3.8% YoY). In line with our estimate, while its total income grew by 8.7% YoY, while net profit grew by 8.6% YoY. Expected double-digit growth in light electrical industry continues to augur well for CGCEL, in our view. Valuing at 35x P/E to its FY20E EPS, we maintain our BUY...

Crompton Greaves Consumer Electricals (CGCE) is engaged in manufacturing and marketing of a wide range of consumer products ranging from fans, light sources and luminaires, pumps and household appliances such as geysers, mixer grinders, toasters and irons.

To mitigate the cost pressure on account of rise in key raw material prices(copper), Crompton went in for price hikes in the Fans category (1.5-2.0%) across its range. Crompton expects the Fans industry to register a 6-7% volume growth. Premium category sales, which now accounts for 18-20% of the overall Fans category sales, remains Crompton's focus area.

Crompton Greaves Consumer Electricals Ltd. manufactures and markets a wide spectrum of consumer products ranging from fans, light sources and luminaires, pumps and household appliances.

Revenue rose by 6.89% to Rs. 1203.89 Cr in Q1FY19 when compared to the previous quarter. Crompton Greaves Consumer Electrical Ltd Q1FY19 results Comment