Anand Rathi has given Buy recommendation for Crompton Greaves Consumer with a target price of Rs. 459 in its research report issued on May 24, 2021
Anand Rathi’s research report on Crompton Greaves Consumer
Helped by a low base, revived sentiment, premiumisation, network expansion, pricing and cost control, Crompton’s Q4 revenue/adj. PAT were up 48%%/64% y/y. Market-share gains in key categories continue (up 1% in fans). Management expects demand to return once markets open; premiumisation, cost control and pricing will protect margins in rising RM costs scenario. Product innovation, network expansion (rural/weak regions) and strong balance-sheet are key growth drivers. High cash (Rs9bn) and future FCFs will be re-invested in growth capex or be distributed as dividend.
We remain positive on Crompton’s prospects; maintain a Buy with a TP of Rs459 (40x FY23e P/E, a 15% discount to Havells). A strong performance is key to a high P/E.