Crompton Greaves Share Price up 15% to 20-Month High After Strong Q4 Performance

Crompton Greaves Consumer Electricals saw its shares surge by 15% this morning reaching a 20 month high of ₹390.40 per share. The increase came after the company reported results for the March quarter surpassing market expectations due to strong demand for fans and air coolers.

In March, Crompton Greaves achieved its highest ever quarterly standalone revenue of ₹1,797 crore marking a 12% yoy growth. The company maintained a robust EBIT margin of 11.5%, adjusted to 12.3% for Exceptional Project Returns or EPR. Consolidated the quarter's revenue stood at ₹1,961 crore.

Segment Performance

ECD Segment: Sales grew by 14% yoy to ₹1,520 crore. This growth was driven by:

• Fans: 13% growth
• Pumps: 9% growth
• Appliances: 27% growth
• Lighting: Sales remained flat yoy at ₹280 crore. Despite healthy volume growth in B2C lighting categories like ceiling lights, battens and accessories, persistent price erosion impacted overall sales.

The company saw a 40 basis point increase in gross margin yoy reaching 31.9%. This improvement was due to cost savings from Project Unnati and a better product mix.

Fiscal Year Achievements

During the fiscal year, Crompton Greaves achieved significant milestones:

• Sold over 20 million fans with double digit volume growth.
• Executed several solar pump orders totaling ₹122 crore in empanelment.
• Sold over 1 million units of mixer grinders contributing to a 39% growth in small domestic appliances.

B2B segment showed strong growth led by streetlight and industrial segments. The company secured large projects from TCS, NHAI JSW and Megha Engineering & Infrastructure Ltd.

Butterfly Gandhimathi Performance

Butterfly Gandhimathi a subsidiary saw its revenue decline by 11% yoy in Q4 due to one time settlements and extraordinary items. However core categories's revenue remained stable with regional chain stores growing for the fourth consecutive quarter. New product launches and premiumisation also contributed to Q4 revenue.

Profit and Revenue Highlights

• Standalone Profit After Tax: Surged to ₹161 crore in the March quarter a 22% yoy increase.
• Net Profit for FY24: ₹466 crore a 2% decline compared to the previous fiscal year's net profit of ₹476 crore.
• Revenue from Operations: Increased by 10% yoy to ₹6,388 crore in FY24.

Analyst Recommendations

Following the strong financial performance Centrum Broking retained its add rating on Crompton Greaves's stock with a revised target price of ₹345 per share. Centrum Broking expects the company to report a revenue CAGR of 17% and an EPS CAGR of 36% over FY24–26E driven by premium fans, appliances and lighting. They noted that sustainable ECD margin levels and the turnaround of Butterfly Gandhimathi are key variables and risks to watch.

Final Words

Crompton Greaves Consumer Electricals's robust performance in the March quarter has boosted investor confidence leading to a rise in its share price. The company's strategic focus on cost savings, product mix improvement and expansion in both B2C and B2B segments has positioned it well for future growth.