Post Q3 results, various Brokerages have come up with target prices on stocks of various companies discounting potential financial performance, synergies, and many more.
Listed below is one such consumer durable stock to buy now for a potential upside of more than 25 percent:
Crompton Greaves Consumer Electricals Limited
With a market capitalization of Rs 18,570.06 crores, the stocks of Crompton Greaves Consumer Electricals Limited started their trading session on Tuesday at Rs 289.35 and currently trade at Rs 290.05, a flat movement as compared to the previous closing levels of Rs 290.15 apiece.
Having a glance at the financials of the company, the prime indicators of business such as operating revenues as well as after-tax profits showed a dip in numbers.
The former fell from Rs 1,782 crores during the September 2023 quarter to Rs 1,692 crores during the December 2023 quarter and the latter, keeping the timeframe the same, shifted down from Rs 100 crores to Rs 85 crores.
As a result of the annual underperformance of the company, the basic profitability ratios saw a downfall with the return on equity (RoE) falling from 23.57 percent during FY21-22 to 17.41 percent during FY22-23 and the return on capital employed (RoCE), during the same period, fell from 23.29 percent to 18.41 percent.
On the contrary, HDFC Securities, one of the well-known Brokerages based in India, gave a ‘Buy’ recommendation on the stocks of Crompton Greaves Consumer Electricals Limited with a target price of Rs 375 per share indicating a potential upside of 29.3 percent compared to the prevailing share price level.
The investment rationale behind providing such a recommendation pertains to the outperformance of the company’s ‘Electrical Consumer Durables’ (ECD) segment, securing new orders pertaining to solar pumps, and initiating further price hikes in the last couple of weeks.
In addition, the ‘Crompton 2.0’ strategy could help with favourable movements focusing on protecting and growing the core, viz, the fans & pumps business, transforming the lighting business, scaling up the kitchen portfolio, premiumization of the portfolio led by innovation, and entering 2-3 new business segments.
According to the latest shareholding data for the quarter ended December 2023, the Public (retail) investors hold a 16.11 percent stake, and the Foreign Institutional Investors (FIIs) hold a considerable stake of 35.58 percent in the company.
Crompton Greaves Consumer Electricals Limited is engaged in the business of manufacturing as well as marketing various consumer products in India. The company offers fans, professional LED and conventional lighting, lamps and consumer luminaires, pumping systems, and other accessories.
Written by Amit Madnani
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
