Buy Crompton Greaves Consumer Electricals Ltd for the Target Rs 294 by Prabhudas Liladhar Ltd
Growth Momentum Strengthens Across Categories
CROMPTON’s ECD segment delivered 19.2% YoY growth, led by 40% growth in BLDC fans, double-digit growth in residential, agricultural and specialty pumps, and over 20% growth in small domestic appliances (SDA), driven by induction cooktops, air fryers and mixer grinders. General trade and rural trade recorded double-digit growth, while ecommerce remained subdued. Water heaters gained market share, while solar pump growth remained muted due to lower PM-KUSUM order inflows, with a potential recovery expected under PM-KUSUM 2.0. Lighting revenue grew 14.3% YoY, supported by ceiling lights, outdoor lighting and LED battens in B2C, alongside industrial and commercial projects in B2B; however, EBIT margins contracted by 260 bps due to precontracted lower-priced orders. Butterfly revenue grew 16.6% YoY, driven by pressure cookers, induction cooktops, mixer grinders and electric rice cookers, alongside market share gains in mixer grinders, glass cooktops and pressure cookers. Exports grew 70% YoY, led by fans followed by pumps, with the Middle East, Africa and South Asia being key markets. The company implemented cumulative fan price hikes of 17–18% from Jan’26 to Sep’26 and has passed on ~80% of the overall cost increase. In the solar rooftop business, more than 50% of the Andhra Pradesh government order book has been executed. We estimate revenue/EBITDA/PAT CAGR of 12.9%/15.0%/15.5% over FY26-29E. We have upward revised FY28/FY29 earnings by 0.9%/0.8%. We maintain ‘BUY’ rating with TP of INR294 (same as earlier), based on 25x Sep’28 earnings
Q2FY27 performance:
Revenue grew by 18.2% to INR 22.63bn (PLe: INR 20.8bn). Gross margin stood at 29.8% (PLe: 32.1%), contracted 180bps YoY. EBITDA grew by 29.2% to INR 2.0bn (PLe: INR 1.9bn) with EBITDA margin expanding 80bps YoY to 9% (PLe: 9.3%). PAT grew by 67.7% YoY to INR 1.2bn (PLe: INR 1.2bn). ECD segment grew 19.2% YoY to INR 16.3bn Lighting revenue grew 14.3% YoY to INR 2.9bn and Butterfly grew by 16.6% to INR 3.3bn. ECD EBIT margin expanded by 100bps YoY to 11.6%, while Lighting EBIT margin contracted by 260bps YoY to 12.9% and butterfly margins contracted by 40bps YoY to 7.4%.
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SEBI Registration number is INH000000933
