Shares of Crompton Greaves Consumer Electricals have seen a significant surge, rallying as much as 6% to their day’s high of Rs 264.30, following a Buy rating from a leading brokerage firm. This positive outlook is largely due to the company’s strategic growth initiatives and recent acquisitions, which are expected to drive substantial revenue growth and improve profitability.
Key Drivers of Growth
The brokerage firm has cited several key factors that will contribute to the company’s growth, including its recent acquisition of Butterfly, which has broadened its appliances portfolio and created strong synergies. The company’s new ‘Crompton 2.0’ program also bodes well, focusing on four strategic pillars: strengthening and protecting the core portfolio, driving gains in the kitchen segment, transforming the lighting business, and expanding into new segments.
Strategic Initiatives
These priorities are supported by key enablers such as organisational development, brand building, operational excellence, a sharper go-to-market strategy, digital enablement, consumer-centric innovation, and portfolio premiumisation—aimed at delivering faster growth and improved profitability. The company has also stepped up investments in advertisements to enhance the overall brand visibility, with a raised allocation towards digital platforms to drive consideration and preference for the brand.
Financial Projections
The brokerage firm expects Crompton to deliver around an 8% revenue CAGR over FY26–FY28, with segment-wise growth estimated at 8% in ECD, 6% in Lighting and 10% in Butterfly. Gross margins are likely to improve during FY27–FY28, supported by pricing actions, product premiumisation and ongoing cost-efficiency initiatives. EBITDA and PAT CAGR are estimated at 17% and 21%, respectively, with EBITDA margins seen rising to 10.3% in FY27 and 11.2% in FY28.
Investment Outlook
With a target price of Rs 350, the brokerage implies an upside potential of 40% from current market levels. The stock has traded at an average P/E multiple of 35x over the past five years, and applying the same multiple to December 2027E earnings yields a target price of Rs 350. However, it is essential to remember that this is just a perspective and not a prediction. Investors should do their own research and consider their individual financial goals and risk tolerance before making any investment decisions.
- Key Takeaways:
- Crompton Greaves Consumer Electricals shares rallied 6% after a Buy rating from a leading brokerage firm.
- The company’s recent acquisition of Butterfly and its new ‘Crompton 2.0’ program are expected to drive growth and improve profitability.
- Financial projections indicate an 8% revenue CAGR over FY26–FY28, with improving gross margins and EBITDA margins.