Crompton Greaves Consumer Electricals Ltd. share price target

Market leader in the domestic fan industry with value market share of 27%. The company has enhanced focus on increasing market share in home appliances categories like (air coolers, water heater and kitchen appliances) Robust balance sheet with RoE & RoCE of 34% & 39% (three-year average),...

Acquisition of Butterfly Gandhimathi Appliances Ltd

The acquisition values Butterfly at MCap/sales of 2.3x on annualized FY22E sales (TTK FY22E Mcap/Sales: 4.2x). The acquisition will help Crompton to (1) have stronger connect in south India, (2) expand distribution network, (3) will offer better right-to-win in kitchen appliances and (4) reduce over dependence on Crompton brand.

Market leader in the domestic fan industry with value market share of 27%. The company has enhanced focus on increasing market share in home appliances categories like (air coolers, water heater and kitchen appliances) Robust balance sheet with RoE & RoCE of 34% & 39% (three-year average), respectively, with stringent working capital policy Q3FY22 Results: Delivered in line performance; premium fans reported 30% YoY...

Soft result after performing well in five consecutive quarters

Revenue grew 7% to INR14b and was broadly in line with our estimates. The two-year revenue CAGR was strong at 15%, driven by the Electrical Consumer Durables (ECD) segment (+18%). While operating performance...

PAT for Q2FY22 was at | 24 crore, up 172% YoY but down 13% QoQ 12 months (from ~| 67 in October 2020 to ~| 262 levels in October 2021). We continue to remain positive and retain our BUY rating on the stock Target Price and Valuation: We value VSSL at | 340 i.e. 7.5x FY23E EV/EBITDA In June 2021, VSSL was granted environmental clearance (EC) for expansion of capacity at its existing plant in Ludhiana, to up to 280000 tonnes per annum (TPA) of rolled production. With this approval, the path for enhancement of capacity has been cleared. To begin with, the current...

Healthy performance amid margin pressure

We increase our FY22/ FY23/ FY24 earnings by 6.3%/ 2.7%/ 2% and reiterate BUY on Crompton. Crompton remains optimistic of sustaining double digit 2yr CAGR growth in H2FY22 buoyed by strong consumer demand further aided by tailwinds in real estate and infrastructure segments. Despite...