CROMPTON - Investment Analysis

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

Investment Rating: 3.4

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

Crompton is a well-known player in consumer electricals, with a strong brand and distribution network. While its fundamentals are decent, valuation concerns and weak price momentum limit its attractiveness for long-term investment at current levels.

Metric Value Implication

Market Cap ₹21,102 Cr Mid-cap; stable consumer brand

Stock P/E 38.0 Fairly valued vs. industry PE of 53.3

PEG Ratio -20.3 Negative PEG suggests earnings volatility or declining growth

ROCE / ROE 19.0% / 17.4% Good capital efficiency; above average

Dividend Yield 0.92% Modest; adds some income stability

Debt-to-Equity 0.14 Low debt; financially sound

EPS ₹8.64 Reasonable earnings base

Qtr Profit Var +27.0% Solid quarterly growth

FII/DII Holding Change -1.13% / +1.88% DII buying; FII trimming — mixed sentiment

📉 Technical Analysis

Current Price: ₹328

DMA 50 / DMA 200: ₹344 / ₹356 → Trading below both; short-term bearish

RSI: 36.8 → Near oversold zone; potential for technical bounce

MACD: -4.56 → Bearish crossover

Volume: Slightly below average; subdued interest

💰 Ideal Entry Price Zone

₹310–₹325

This range offers a better margin of safety and aligns with technical support

Avoid fresh entry above ₹350 unless earnings growth stabilizes and PEG improves

📈 Long-Term Investment Outlook

Strengths

Strong brand in consumer electricals

Good ROE and ROCE — efficient use of capital

Low debt and consistent dividend payout

Recent profit growth — signs of recovery

Risks

PEG ratio negative — indicates earnings volatility or poor growth visibility

RSI and MACD suggest weak momentum

FII selling — cautious institutional sentiment

EPS growth not aligned with valuation — P/E may be stretched if growth falters

Crompton is a moderate-quality consumer stock, suitable for long-term holding if earnings growth resumes. It’s not a high-conviction compounder at current valuation.

🏁 Exit Strategy / Holding Period

If you already hold CROMPTON

Holding Period: 2–3 years to capture consumer demand cycles

Exit Strategy

Consider trimming near ₹450–₹470 if price rebounds

Reassess if ROCE drops below 15% or PEG remains negative

Hold if quarterly profit growth sustains and margin expansion continues

Would you like a comparison with peers like Havells, V-Guard, or Bajaj Electricals to explore stronger consumer electrical plays?

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