Synopsis: Crompton Greaves Consumer Electricals is in focus after Kotak estimates that the stock would rise by another 56 percent, citing strong margin recovery and new business scaling to Rs 1,000 crore each within the next 24 months.
The shares of this leading consumer durable stock are in focus after Kotak has projected a staggering 56 percent upside, citing strong margin recovery and a new good revenue potential from new segments. In this article, we will delve further into the details.
With a market capitalisation of Rs 16,928 crore, the shares of Crompton Greaves Consumer Electricals Ltd are currently trading at Rs 263.60 per share, up 6 percent from its previous day’s closing price of Rs 249.30 per share. Over the past five years, the stock has corrected by approximately 30 percent, as compared to NIFTY 50’s positive return of 88 percent.
Analyst Comments
Leading domestic brokerage house, Kotak Securities, has reiterated its Buy call on Crompton Electricals and has assigned a target price of Rs 390 per share, signalling an upside potential of 56 percent from its previous day closing price of Rs 249.30 per share.
Kotak Securities expects Crompton’s core Electric Consumer Durables (ECD) business to see a steady margin recovery over the next three quarters. The brokerage noted that the company is confident of passing on BEE-related raw material cost increases to consumers, which should support profitability. Kotak also highlighted Crompton’s market share gains in fans and believes that margin improvement in the lighting segment can be sustained, provided the company maintains its brand investment levels.
The research firm further noted strong traction in Butterfly’s new product portfolio, indicating better performance ahead. It also sees meaningful growth potential in Crompton’s emerging solar verticals, particularly solar pumps and rooftop systems, both of which could scale to Rs 1,000 crore in annualised revenues within the next two years.
Given these improving fundamentals, Kotak believes the recent valuation correction in Crompton is overdone, especially when compared with sector peers. The brokerage maintains that the company’s ongoing margin revival, market-share gains, and new high-growth categories make the stock well-positioned for a strong upside from current levels.
Operational, Financial and Other Highlights
Crompton Greaves Consumer Electricals Limited is an Indian company that produces and sells a wide range of consumer electrical products. Its products range from fans to household and farm pumps, air and water heaters, air coolers, kitchen devices, and irons. It also deals in a range of LED and traditional light fittings, including bulbs, battens, lamps, and ceiling lights for domestic and commercial use.
Crompton Greaves reported a revenue from operations of Rs 1,916 crore in Q2 FY26, a minor growth of 1 percent as compared to Rs 1,896 crore in Q2 FY25. However, on a quarter-on-quarter basis, it declined slightly by 4 percent from Rs 1,998 crore.
Coming to its segmental highlights, the company’s ECD division reported a revenue decline of 2 percent to Rs 1,371 crore in Q2 FY26 from Rs 1,393 crore in Q2 FY25. However, its Lighting division reported a revenue growth of 3 percent to Rs 261 crore in Q2 FY26 from Rs 253 crore in Q2 FY25. Also, its Butterfly segment, which was the main highlight of this quarter, grew by 14 percent to Rs 293 crore in Q2 FY26 from Rs 258 crore in Q2 FY25.
Regarding its profitability, it reported a net profit of Rs 75 crore in Q2 FY26, a significant decline of 41 percent as compared to Rs 128 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it declined by 40 percent from Rs 124 crore.
Written by Satyajeet Mukherjee
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