CROMPTON - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

💡 Fundamental Analysis: Crompton Greaves Consumer Electricals Ltd (CROMPTON) Fundamental Rating: 3.5

📊 Core Financials

Profitability

EPS: ₹8.64 ➜ steady income generation in consumer durables

PAT Qtr: ₹169 Cr vs ₹110 Cr ➜ QoQ growth of 27% — encouraging

Returns

ROCE: 19.0%, ROE: 17.4% ➜ respectable but not industry-topping

Leverage & Dividend

Debt-to-equity: 0.14 ➜ low leverage — financial stability

Dividend Yield: 0.92% ➜ decent income for conservative investors

📉 Valuation Metrics

Metric Value Interpretation

P/E Ratio 38.0 discount to industry avg (53.3) — attractively priced

P/B Ratio ~6.22 (₹328 / ₹52.7) ➜ pricey relative to book value

PEG Ratio -20.3 anomalous — could signal unreliable growth input or recent volatility

🧾 Valuation Note: Though P/E is below industry average, the PEG anomaly and modest ROE suggest the market is pricing in caution around future growth sustainability.

🏠 Business Model & Moat

Segments: Fans, lights, pumps, kitchen appliances

Strengths

Strong brand equity in electricals

Wide distribution across urban and semi-urban markets

Solid consumer recall and presence in value segments

⚠️ Challenges

Intense competition from Havells, Bajaj Electricals, and global entrants

Margin pressure from input costs and discounting behavior

📉 Technical Indicators

RSI: 36.8 ➜ approaching oversold — bounce potential

MACD: -4.56 ➜ bearish undertone remains

Price trading below DMA 50 & 200 ➜ downtrend intact

✅ Suggested Entry Zone: ₹310–₹320 📌 Wait for base formation and signs of reversal before entering. A stabilizing volume spike could validate short-term support.

🧭 Investment Outlook

🔌 Stable long-term play on India's appliance & electrification growth

🛠️ Positioned to benefit from semi-urban consumption and electrification tailwinds

📦 Ideally suited for moderate-risk portfolios seeking defensive consumer exposure

⚠️ Better suited for accumulation during broader market corrections or sector rotation phases. Watch operating margins and seasonal trends for entry validation.

Would you like me to roll this up with Havells and Voltas for a head-to-head benchmark? Could help identify where Crompton shines or falls short in the durables universe.

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