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Brokerages bullish on Crompton Greaves post Q4; stock hits 52-week high

On a yearly basis, Crompton Greaves' profit soared 5.5 per cent to Rs 138.4 crore in the March quarter of FY24, from Rs 131 crore in the March quarter of FY23

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Tanmay Tiwary New Delhi

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Crompton Greaves hits 52-week high: Shares of Crompton Greaves surged as much as 16.30 per cent to hit a fresh 52-week high of Rs 394. The uptick in stock came after brokerages raised their target price on the company after it announced quarter-ending March of financial year 2024 (Q4FY24) results.

Analysts at Nuvama said Crompton Greaves reported a healthy growth in Q4FY24 with revenue/Ebitda/PAT growing 16 per cent/36 per cent/61 per cent Q-o-Q. The electric consumer durables (ECD) segment rose due to healthy growth across fans, pumps and appliances portfolio. Fans growth, analysts noted, was led by higher volume.

The company also witnessed robust growth in the e-com segment in appliances product category on the back of sustained product launches.

"ECD is faring well with B2B lighting remaining robust. The focus is on improving Butterfly performance, which is likely to recover Q2FY25 onwards. In all, we are increasing FY26–26E by 3–9 per cent, yielding a target price of Rs 393, up from Rs 365, valuing the stock at 37x FY26E, retaining ‘Buy,’ Nuvama said in a note.

On a yearly basis, Crompton Greaves' profit soared 5.5 per cent to Rs 138.4 crore in the March quarter of FY24, from Rs 131 crore in the March quarter of FY23.

The company's topline surged 9.5 per cent to Rs 1,961 crore, as opposed to Rs 1,791 crore in the same quarter a year ago.

Meanwhile, earnings before interest, taxes, depreciation and amortisation (Ebitda) dropped 4 per cent on a year-on-year basis to Rs 203.6 crore, from Rs 211.8 crore in the same quarter a year ago. Its margin also squeezed 140 basis points (bps) to 10.4 per cent in Q4FY24, from 11.8 per cent in Q4FY23.

Given this, analysts at ICICI Securities have raised their earnings estimates by 4.3 per cent each for FY25/26E to factor in Q4FY24 results.

"We maintain 'Add' with a revised target price of Rs 360 (implied P/E of 36x FY26E) as we believe the performance may start improving from H2FY25E with benefits of restructuring initiatives kicking-in," they said in their result review report.

Moreover, global brokerages such as CLSA and Jefferies have reportedly expressed bullish sentiments towards Crompton Greaves. CLSA has maintained an 'outperform' rating while raising target price to Rs 370 per share.

Similarly, Jefferies has maintained a 'Buy' rating with an increased target price of Rs 390 per share.

At 10:36 AM, shares of Crompton Greaves were trading 14.36 per cent higher at Rs 387.40 per share. By comparison, S&P BSE Sensex was trading 0.28 per cent higher at 73,868.59 levels.

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First Published: May 17 2024 | 10:39 AM IST

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