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Business News/ Markets / Stock Markets/  Crompton Greaves stock soars 15% to 20-month high on stellar Q4 performance
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Crompton Greaves stock soars 15% to 20-month high on stellar Q4 performance

Crompton Greaves Consumer Electricals' shares hit a 20-month high after strong March quarter results. ECD segment sales grew by 14%, driven by fans, pumps, and appliances. Company achieved record revenue with a 40 basis point increase in gross margin.

Following this company's financial performance, Centrum Broking retained its 'Add' rating on the stock with a revised target price of ₹345 apiece. (Mint)Premium
Following this company's financial performance, Centrum Broking retained its 'Add' rating on the stock with a revised target price of 345 apiece. (Mint)

Crompton Greaves Consumer Electricals, one of the leading consumer companies in India, saw its shares surge by 15% during early morning trading today, reaching a 20-month high of 390.40 per share. This increase followed the company's impressive performance in the March quarter, surpassing street estimates, largely due to heightened demand for its fans and air coolers.

In March, the company achieved its highest-ever quarterly standalone revenue of 1,797 crore, marking 12% year-on-year growth. Additionally, it maintained a robust EBIT margin of 11.5% (12.3% adjusted for EPR). On a consolidated basis, the revenue for the quarter stood at 1,961 crore.

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Sales in the ECD segment grew by 14% year-on-year to 1,520 crore, primarily driven by fans (13% growth), pumps (9% growth), and appliances (27% growth). However, lighting sales remained flat year-on-year at 280 crore due to persistent price erosion, despite witnessing healthy volume growth in B2C lighting categories such as ceiling lights, battens, and accessories.

The company saw a 40-basis point increase in gross margin year-on-year to 31.9%, attributed to cost savings from Project Unnati and a better product mix.

During the fiscal year, the company achieved significant milestones, including selling more than 20 million fans with double-digit volume growth and executing several solar pump orders with a total empanelment of 122 crore.

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Moreover, the company surpassed the milestone of selling 1 million units of mixer grinders in FY24, contributing to a robust growth of 39% in small domestic appliances.

"The B2B segment demonstrated strong growth during the quarter, led by streetlight and industrial segments; we secured large projects from NHAI, TCS, JSW, and Megha Engineering & Infrastructure Ltd," the company said in its earnings report. 

Butterfly Gandhimathi's revenue declined by 11% YoY in Q4, impacted by one-time settlements and extraordinary items.

"Core categories revenue sustained along with stable market share, and regional chain stores continued to grow for the fourth consecutive quarter. New product launches and premiumisation contributed substantially to Q4 revenue," the company said. 

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On the bottom line, the standalone profit after tax for the March quarter surged to 161 crore, marking a 22% year-on-year increase. However, for the full fiscal year (FY24), the company's net profit stood at 466 crore, reflecting a 2% decline compared to the previous fiscal year's net profit of 476 crore.

Additionally, the revenue from operations (standalone) increased by 10% year-on-year to 6,388 crore in FY 24. 

Following the company's financial performance, Centrum Broking retained its 'Add' rating on the stock with a revised target price of 345 apiece. 

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"We expect Crompton to report a revenue CAGR of 17% and an EPS CAGR of 36% (on a low base) over FY24–26E. Growth will be led by premium fans, appliances, and lighting. Sustainable levels of ECD margin and Butterfly turnaround are key variables and risks, said Centrum Broking.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 17 May 2024, 10:32 AM IST
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