Crompton Greaves Consumer Electricals Ltd (CROMPTON) – Complete Analysis Report:
Crompton trades at ₹257-259 near 52-week low ₹248 with strong 12.4% open interest surge + recent 6% rally on brokerage upgrades; Motilal Oswal ‘Buy’ targets ₹350 (33% upside). Mixed technicals show short-term bounce potential amid consumer durables rotation despite poor long-term growth.
Technical Analysis (Detailed):
Stock consolidates above pivot ₹259-260 (R1 ₹262-264) with supports at S1 ₹256/S2 ₹253; RSI 36.57 neutral-oversold, Stochastic 47 neutral, MACD -7.42 shows mild bullish divergence. Trading below all key MAs (50-day ₹310, 200-day ₹336) but above 5/20-day short-term MAs signals intraday strength; ADX 45 confirms trend potential. Recent bounce from ₹248 low + volume pickup supports ₹270-280 targets if breaks ₹264 decisively; breakdown below ₹253 risks ₹240.
Fundamental Analysis (Detailed):
Market cap ₹16,584-18,605 Cr, P/E 34.1 (peer median 50+), ROE 17.4%, ROCE 19%, dividend yield 1.17% with 39.9% payout. FY25 revenue ₹7,864 Cr (+7.5% YoY), PAT ₹564 Cr (+27% YoY), EBITDA ₹888 Cr (11.3% margin); Q2FY26 profit -31% QoQ to ₹75 Cr but revenue +1%. 5-yr sales CAGR poor 11.7%, profit 2%; debt reduced to near-zero strengthens balance sheet.
Recent Buying Pressure Reasons:
Continuous buying driven by Motilal Oswal ‘Buy’ initiation (Dec 18, ₹350 TP) citing Crompton 2.0 strategy + 12.4% OI surge reflecting fresh positions. 6% single-day jump to ₹264 + premiumisation focus (170 new products FY25) attracts traders; 71% delivery volume confirms institutional accumulation near lows.
Upcoming News/Events & Impact:
Q3FY26 Results (Nov 6): Expected revenue ₹1,950-2,000 Cr, margins 10-11%; Crompton 2.0 updates critical.
Solar EPC Order (Dec 24): ₹46 Cr MSEDCL 2,000 pumps (60-day execution) boosts EPC segment visibility.
Patent Grant (Dec 20): Energy-efficient fan/AC tech (20-yr term) supports premiumisation narrative.
Impact: Results beat + order wins could trigger ₹280-300 breakout; GST appeals (₹3-6 Cr demands) minimal risk.
Short/Long Term Position Levels:
Short Term (1-4 weeks): Buy dips ₹253-256 (S1-S2), targets ₹270/₹285, SL ₹248 (52-wk low).
Long Term (6-12 months): Accumulate ₹240-250 zone, targets ₹320-350 (broker TPs), SL ₹230; hold above 200-WMA ₹336 for bullish confirmation.
Micro View (Stock-Specific):
Crompton 2.0 revamp (3.6% A&P spend, ₹100 Cr innovation) targets 8% revenue CAGR FY26-28 via premiumisation/GTM; EBITDA margins to 11.2% FY28. Solar pumps/EPC diversification + debt-free status de-risks; Q2 margin pressure temporary from ad spends.
Macro View (Industry/ Economy):
Consumer durables benefits from rural recovery + festive spillover; falling rates aid discretionary spending. Peers (Voltas/Blue Star) premium valuations (P/E 68-84) make Crompton attractive at 34x; China+1 shifts favour domestic players amid urban premium demand.
Disclaimer & Disclosure:
Investogainer Research (SEBI Reg INH000012856) provides educational analysis only. No buy/sell recommendations. Past performance no guarantee of future results. Consult certified advisor. No personal holdings in CROMPTON. Risks include margin pressure, slow sales growth, GST litigations.