Mehabe score: 5 G Factor: 5 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 7.
Description
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.
Main Points
Revenue Breakup
Presently, Electrical Consumer Durables (Fans, Pumps & Appliances) accounts for 75% of revenues and Lightning Products (Luminaire, Light sources) accounts for the rest 25% revenues. #Site:CROMPTONMain Symbol:CROMPTON
Stock trades at 473.0, above its 50dma 426.87. It also trades above its 200dma 375.12. The stock remains bullish on techicals
The 52 week high is at 496.70 and the 52week low is at 238.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 39.58% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 38.12%
Weakness
– Stock is trading at 15.47 times its book value
-Promoter holding has decreased over last quarter: -5.37%
-Promoter holding is low: 5.99%
-Tax rate seems low
Competition
– The industry trades at a mean P/E of 28.9x. A B B trades at the industry’s max P/E of 151.46x. CROMPTON trades at a P/E of 49.1x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 7.0. CROMPTON has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 1.3%. The max 1- month return was given by Havells India: a return of 15.3 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1046.0 cr compared to Rs 713.0 cr for period ended Jun 2020, a rise of 46.7%
Operating Profits reported at Rs 123.0 cr for period ended Jun 2021 vis-vis 99.0 for period ended Jun 2020 .
Operating Margins contracted -212.6 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 1.48 compared to Rs 3.93 for previous quarter ended Mar 2021 and Rs 1.18 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5083.0 cr for period ended TTM vis-vis sales of Rs 4750.0 cr for the period ended Mar 2021, a growth of 6.6%. The 3 year sales cagr stood at 4.3%.
Operating margins shrank to 14.0% for period ended TTM vis-vis 15.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 624.0 cr for period ended TTM vis-vis sales of Rs 605.0 cr for the period ended Mar 2021, rising 3.0%.
Company recorded a healthy Net Profit CAGR of 15.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 815.0 cr for period ended Mar 2021 vis-vis Rs 421.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 36.0% compared to 38.0% over the last 3 Years. – The stock has given a return of 87% on a 1 Year basis vis-vis a return of 25% over the last 3 Years. – The compounded sales growth on a TTM bassis is 5% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 22% vis-vis a compounded profit growth of 23% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 40.14% vis-vis 39.18% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 10.19% vis-vis 10.77% for Mar 2021
Conclusion
– has delivered good profit growth of 39.58% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 38.12% – Stock is trading at 15.47 times its book value
-Promoter holding has decreased over last quarter: -5.37%
-Promoter holding is low: 5.99%
-Tax rate seems low
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 426.87 and is trading at 473.0, thus bullish price action wise.
