Crompton Greaves - Well Placed To Reap The Benefits Of Upturn In The Industry: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Retail Research.Crompton Greaves Consumer Electricals Ltd. is one of India's leading consumer electrical companies, having a rich legacy of more than nine decades in the electrical consumer durable and lighting segments. In addition, the acquisition of Butterfly Gandhimathi Appliances Ltd. will accelerate the long-term strategic goal of becoming a key pan India player in small domestic appliances. It will provide greater exposure to the South Indian market, since Butterfly is the leading brand in key categories like LPG stoves and table-top wet grinders..Valuations and recommendations-Profitability for Crompton Greaves' FY23 was hit by:weak margin performance in the electrical consumer durable and lighting segments; continued investment in innovation, brand building, etc; and higher interest payment due to the Butterfly-acquisition funding. While maintaining its fans market share in the mass segment, Crompton has gained market share in premium fans (number two in BLDC). Lighting remained weak due to subdued B2B performance. The company is focusing on fixing white spaces by taking various corrective steps like-higher brand investments;innovation and research and development;expanding go-to-market reach;new brand architecture in pumps; anddedicated sales team in lighting, costs incurred on branding, distribution and R&D expenses are upfront in nature, thereby impacting operating margin. We believe revenue acceleration will be visible gradually but in the interim cost increase may impact margin in the near term. In our opinion, if management executes this strategy well, then investors’ confidence on valuation multiple will improve. Deficient rainfall may impact rural consumption to some extent, but the recovery should also be fast with a lag of a few quarters..Click on the attachment to read the full report:.KEC International - Take-Off Ready After Repairs; Upgrade To 'Buy': Yes Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Crompton Greaves - Well Placed To Reap The Benefits Of Upturn In The Industry: HDFC Securities

Crompton has been the market leader in fans, domestic pumps and street lighting for over 20 years.

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