CROMPTON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | CROMPTON | Market Cap | 18,995 Cr. | Current Price | 295 ₹ | High / Low | 364 ₹ |
| Stock P/E | 54.2 | Book Value | 49.4 ₹ | Dividend Yield | 1.03 % | ROCE | 19.0 % |
| ROE | 10.3 % | Face Value | 2.00 ₹ | DMA 50 | 268 ₹ | DMA 200 | 278 ₹ |
| Chg in FII Hold | -0.06 % | Chg in DII Hold | 0.38 % | PAT Qtr | 116 Cr. | PAT Prev Qtr | 112 Cr. |
| RSI | 61.4 | MACD | 10.3 | Volume | 14,11,353 | Avg Vol 1Wk | 27,89,191 |
| Low price | 217 ₹ | High price | 364 ₹ | PEG Ratio | -5.75 | Debt to equity | 0.06 |
| 52w Index | 52.8 % | Qtr Profit Var | -31.7 % | EPS | -3.78 ₹ | Industry PE | 48.1 |
📊 Financial Overview: Crompton Greaves Consumer Electricals shows weak fundamentals relative to valuation. ROE is 10.3% and ROCE is 19.0%, reflecting moderate efficiency. Debt-to-equity is low at 0.06, ensuring financial stability. Dividend yield is modest at 1.03%. Quarterly PAT rose slightly from ₹112 Cr. to ₹116 Cr., but profit variation is reported at -31.7%, highlighting margin pressures. EPS is negative (-3.78 ₹), which is a red flag for profitability.
💹 Valuation Indicators: Current P/E of 54.2 is significantly above the industry average of 48.1, suggesting overvaluation. P/B ratio is ~6.0 (295/49.4), which is expensive. PEG ratio is negative (-5.75), signaling weak growth prospects relative to valuation. Intrinsic value appears lower than current price, implying cautious accumulation.
🏢 Business Model & Advantage: Crompton operates in consumer electricals, with strengths in fans, lighting, and appliances. Its competitive advantage lies in brand recognition, distribution network, and diversified product portfolio. However, profitability pressures and high valuations limit financial attractiveness.
📈 Entry Zone: A favorable entry zone lies between ₹250–270, closer to intrinsic value and support levels. Current price (₹295) is above this zone, making fresh entry less attractive.
🔒 Long-Term Holding Guidance: Crompton is a recognized brand in consumer electricals, but weak earnings, negative EPS, and stretched valuations make it risky. Long-term investors should hold cautiously, monitoring profitability and growth recovery.
Positive
- 🌟 Strong brand recognition in consumer electricals
- 🌟 Low debt-to-equity (0.06)
- 🌟 Dividend yield of 1.03%
- 🌟 DII holdings increased (+0.38%)
Limitation
- ⚠️ Very high P/E (54.2) vs industry average (48.1)
- ⚠️ Negative EPS (-3.78 ₹)
- ⚠️ PEG ratio negative (-5.75)
- ⚠️ Profit variation (-31.7%) despite PAT increase
Company Negative News
- 📉 FII holdings reduced (-0.06%)
- 📉 EPS turned negative
Company Positive News
- 📈 DII holdings increased (+0.38%)
- 📈 Slight PAT improvement (₹112 Cr. → ₹116 Cr.)
Industry
- 🏦 Industry P/E at 48.1 reflects premium valuations
- 🏦 Consumer electricals sector supported by urban demand and housing growth
Conclusion
✅ Crompton Greaves Consumer Electricals has strong brand presence and low debt, but negative EPS, weak profitability, and stretched valuations make it risky. A better entry zone lies between ₹250–270. Long-term investors should hold cautiously, awaiting earnings recovery before fresh accumulation.
Would you like me to also prepare a brand strength analysis to evaluate how its market positioning compares with peers like Havells and Bajaj Electricals?