Crompton Greaves Consumer Electricals Ltd. share price target

A Strong Show; Sustained Cost Reduction Efforts Aid Profitability Crompton Greaves Consumer Electricals (CGCEL) continued to report a strong performance in 3QFY18 led by higher volume in Lighting and Consumer Electrical segments. Its reported revenue grew by 3.7% YoY to Rs9.3bn, while adjusted revenue considering the impact of Excise Duty grew by 12.2% YoY. Its reported PAT grew by 27.9% YoY to Rs0.69bn, while adjusted for incremental non-cash ESOP charge of Rs55mn, its PAT surged by 33% YoY in line with our estimate. We continue to believe that the expected strong double-digit growth in light electrical industry augurs well for CGCEL. Rolling over our estimates to FY20E and valuing CGCEL at...

Instead of multiple small changes, CROMPTON will focus on a few big changes/products with meaningful innovation for the customer. An example of a big change is anti-dust fans, which have done very well for the company. CROMPTON is targeting at least one big change each year. Within fans, it would be launching 2-3 new innovations in the upcoming summer season....

Crompton Greaves Consumer Electricals Ltd. (CGCEL) Q2FY18 reported sales at INR 960cr grew ~10% y-o-y and ~3% below our estimates. This growth has largely been driven by underlying volume growth.

We reiterate BUY with a TP of Rs 268, based on 35x Sep-19 EPS. Cromptons net revenue grew 9.8% to Rs 9.6bn. Like-to-like revenue growth was at 15.9%, and our expectation was 9.3%. Adj. EBITDA (Ex-ESOP) and APAT was up 33% and 39%, respectively. Restocking was partial during 2Q, as recovery was slow for seasonal products. However, even in this challenging phase, Crompton gained market share in Fans and LED lamps (B2C). Fans gained a sharp 3 to 4% market share, primarily in the premium segment. Premium Fans contribute 18% to Cromptons Fans business.

Revenue from lighting business which contributes 35% to CGEL's total sales grew by 15.5% YoY. Within the lighting business, LED segment grew by 25% YoY to account for ~70% of its total CGCEL's lighting sales. Consumer Electrical segment, which contributes ~64% to CGCEL's total revenue, grew by 2.4% YoY. Sales volume of premium fans also remained strong. The markets witnessed some normalcy following disruption in run-up to and following GST roll-out, which led to notable improvement in two biggest businesses i.e. Fans & Lighting. While leveraging innovation in Anti Dust Fans led to gain in consumption market share in Fans segment, cost optimisation led to healthy growth in B2C lighting growth. The Company expects the business...

Crompton Greaves Consumer Electricals Ltd. (CGCEL) Q1FY18 reported gross sales at INR 1,081cr de-grew 4.4% y-o-y and ~9% below our estimates of INR 1,185cr mainly due to the channel de-stocking ahead

We reiterate BUY with a TP of Rs 252, based on 35x Jun-19 EPS. Cromptons net revenue contracted by 3.7% to Rs 10.5bn in 1QFY18, against our expectation of 2% growth. Adj. EBITDA and APAT were down by 11% and 7% respectively. As per mgt, channel destocking impacted revenues worth Rs 1.3 to 1.5bn in 1QFY18. Adjusting for the same, revenue growth was at 7-8%, suggesting healthy underlying demand. The ECD segment (75% of revenues) saw 8.6% decline in revenues, owing to high dependence on the wholesale channel. While, Crompton gained ~1% market share in Fans (especially premium) during the last six -months. Premium fans (16% of fans) grew by a strong 25%.

The Company reported decline in margins by 194bps YoY to 12.0% in 1QFY18 on account of high ESOP cost of Rs113mn and 63bps YoY decline in margin of Electrical Consumer Durable business, which was, however partially off-set by improved margins (+210bps) in lighting products business. Overall segmental EBITDA margins decreased 80bps QoQ in 1QFY18. Revenue from Lighting segment grew by 10.3% YoY with 210bps YoY expansion in margin due to higher sales of CFL and traditional bulbs both in terms of volume and value. However, despite adverse revenue mix CGCEL's cost structure remained stable owing to continued efforts on operational efficiencies. Its net profit declined by 14.1% YoY to Rs803mn in 1QFY18 owing to...

Crompton Greaves Consumer Electricals (CGCEL) has delivered a decent performance in 4QFY17. Its net sales grew by 7.4% YoY to Rs10.7bn matching our expectation of Rs10.7bn. Led by betterthan-expected expansion in operating margin, its EBITDA and adjusted net profit grew by 9% YoY and 29.8% YoY to Rs1386mn and Rs864mn, respectively. Apart from expansion in margin, higher other income (Rs160mn in 4QFY17 vs. Rs69mn in 4QFY16) aided earnings growth. Looking ahead, we believe that the expected strong double-digit growth in light electrical industry augurs well for CGCEL. Rolling over our estimates to FY19E, we maintain our HOLD recommendation...

Crompton Greaves Consumer Electricals Ltd. (CGCEL) Q4FY17 reported revenues at INR 1,076cr (up 7.4% YoY) marginally below our estimates.