Wednesday, May 26, 2021

Crompton Greaves Consumer Electricals Ltd (539876) – Gaining Market Share

Crompton Greaves Consumer Electricals Ltd (539876) is Trading  at 399.45  with  a  Loss  of  -0.9%   on    26-May-2021  with formation of  a  Red  Candle    on Daily  Price Chart at the time of writing this article.

About the Company : Crompton Greaves Consumer Electricals Limited is one of the leading consumer companies in India with a 75+ years old brand legacy. It is an independent company under professional management and have 2 business segments – Lighting and Electrical Consumer Durables. We market our products under the “Crompton” brand name in India and select export markets

Sector Update : Stable

Strength :  1. The company gained a 1 per cent share in fans from smaller players in FY21 with its current share at 28 per cent

2.. All the main consumer product categories such as fans, appliances and pumps which make up 78 per cent of revenues reported robust growth ranging from 59-74 per cent. Growth in the lighting segment was led by consumer lighting which grew by 41 per cent.

3. It has also outperformed the sector growth across segments such as pumps, mixer grinders and air coolers.

Financials : Crompton Greaves Consumer Electricals Ltd  has posted Net Sales / Revenue   of 4803.50 Cr & Net Profit of 141.10 Cr in FY2020 and expected to post Net Sales / Revenue   of 1358.60 Cr & Net Profit  of 616.70 Cr in FY2021 and expected to post Net Sales / Revenue   of 5429.40 Cr & Net Profit of 573.90 Cr in FY2022 & Net Sales / Revenue of 6521.50 Cr & Net Profit of 744.10 Cr in FY2023.

Valuations  : The Company is now Trading at X 32.50  of its  valuations ( FY2021 earnings considered here) with ~150 % premium and at X2.66  of its FY 2022, which is almost  ~166%  premium   to its value and  X 2.05  of its FY 2023 earning with a  Premium  of ~105%  of its FY2023 earning .

Margin of Safety (1Yr Bond Yield: Value>1 ) is now  0.60  which  makes is attractive after a ~40% fall in market price. The  Equity Value Per Share ( Enterprise Value Method ) is  393.50

Whats  best in It   : Strong growth, higher cash flows due to efficient working capital management and improving balance sheet are positives will  help it to capitalise on pent up demand once normalcy returns.

If We factor its earnings/valuations, its Price arrives at 491.00 with consideration FY2023 earnings.

Disclaimer : We are / may going to take exposure shortly.

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Data Source NSE Website | Screener.In  | Capital Line Money Control |

The author tracks economic, behavioural and corporate tends, hoping to gauge good avenues of return based on Fundamental Valuations of Stocks, a follower of EPV method. You can reach me/us at | Twitter # NiftyNext1 |  e-Mail : Mail@NiftyNext.Com  |  Tel +91 8802230836  |  Telegram # TheNiftyNext   |

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