Accumulate Crompton Greaves Consumer Electricals Ltd For Target Rs.320 by Prabhudas Liladhar Capital Ltd
Sustained market share gains across key segments
CROMPTON’s ECD segment delivered 9.5% growth led by strong traction across pumps, SDA and fans, with fans witnessing sequential improvement supported by robust BLDC growth and high volumes in Mar’26. Pumps registered double-digit growth across residential, agri and solar pumps while gaining market share, alongside new launches. SDA segment saw strong growth driven by air fryers and induction cooktops, while mixer grinders continued to gain market share. Lighting segment grew by 14.3%, driven by strong double-digit volume growth across both B2C and B2B segments. Butterfly revenue grew 16.8%, led by cookers and gas stoves, while electric cooking appliances benefited from LPG supply constraints. Company undertook calibrated price hikes across key categories in ECD segment to offset commodity inflation and continued executing solar rooftop projects while commencing phased retail rollout across select cities. CROMPTON also entered the residential wires segment with launch of ‘Crompton Armor’ in southern markets, leveraging its strong brand and distribution network.
We estimate revenue/EBITDA/PAT CAGR of 16.9%/20.4%/21.4% over FY26-28E. We have downward revised FY27/FY28 earnings by 5.7%/7.0%, factoring persistent cost pressures partially offset by price hikes, incremental costs arising from new segments and additional expenses related to BEE norms implementation for water heaters effective Jul’26. We downgrade to ‘Accumulate’ from ‘BUY’ rating with revised TP of Rs320 (Rs344 earlier), based on 27x Mar’28 earnings.
Q4FY26 performance:
Revenue grew by 10.8% to INR 22.8bn (PLe: INR 21.9bn). Gross margin stood at 31.6% (PLe: 31.5%), contracted 230bps YoY. EBITDA grew by 2.4% to INR 2.7bn (PLe: INR 2.3bn) with EBITDA margin contracting 100bps YoY to 11.9% (PLe: 10.4%). PAT loss stood at INR 5.3bn (PLe: INR 1.4bn), impacted by a one-time impairment charge of INR 7.2bn on investment in Butterfly Gandhimathi Appliances, leading to a reduction in goodwill carrying value. ECD segment grew 9.5% YoY to INR 17.6bn driven by broad-based growth across pumps, SDA and fans and Lighting revenue grew 14.3% YoY to INR 3.2bn led by strong B2C and B2B demand, ECD EBIT margin expanded by 120bps YoY to 15.5%, while Lighting EBIT margin contracted by 370bps YoY to 12.2%.
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