New norms likely to hit demand, keep CG Consumer stock under pressure

The stock of Crompton Greaves Consumer (CG Consumer) could continue to underperform the broader markets due to near-term challenges in the fans segment, where it is the market leader. The stock has underperformed the broader indices -- such as the BSE 100 -- with a flattish performance since the start of October.

The transition to energy efficiency norms from January 1 2023 for fans would mean near-term headwinds for the market leader due to destocking, demand drop and higher prices.

The new norms will make it mandatory for ceiling fans to have star ratings, as is currently the case with air conditioners and refrigerators. The transition will mean that the cost of energy efficient fans is expected to be 15-20