Crompton Greaves Consumer Electricals Q4 Review: Jefferies, CLSA Optimistic On Strong Margin

Brokerage firms Jefferies and CLSA are both optimistic about Crompton Greaves Consumer Electricals Ltd., highlighting a strong margin recovery in the final quarter of fiscal 2025 and improved growth visibility across segments.

Jefferies reiterated a 'buy' rating with a price target of Rs 485, citing a 13% year-to-date dip in the stock and a favourable risk-reward setup. CLSA, meanwhile, has upgraded its target price from Rs 405 to Rs 410 while maintaining an 'outperform' rating.

• Revenue up 5% to Rs 2,061 crore versus Rs 1,961 crore.

• Ebitda up 30% at Rs 264 crore versus Rs 204 crore.

• Margin expands to 12.8% versus 10.4%.

• Net profit up 23% to Rs 169 crore versus Rs 138 crore.

Jefferies sees earnings per share growth picking up sharply with a CAGR of 18% in fiscal 2025 to 2028 versus just 3% in the previous four fiscals driven by premiumisation, new product launches, and better traction in solar pumps and appliances. The brokerage expects Butterfly margins to turn around to 7.5% in fiscal 2025, a sharp 460 basis point improvement year-on-year.

Jefferies noted a strong final quarter performance, with Ebitda margins rising to 12.8%, helped by electric consumer durables, which account for 76% of sales. Pumps, coolers, and other ECD products grew sharply, while lighting was weak.

CLSA points to a "margin-driven beat" in the quarter under review, where consolidated profit after tax grew 29% on an annual basis. ECD and Butterfly both delivered margin improvements, and even the typically sluggish lighting segment posted a modest gain in profitability, noted CLSA.

The brokerage also sees promise in the company's entry into rooftop solar, estimating a Rs 2,000 crore market opportunity. CLSA believes Crompton is well-positioned to drive medium-term growth with double-digit margins.

While both brokerages flagged seasonal slowdown and some weakness in 'fans and Butterfly’s performance during the summer quarter, they remain upbeat. Jefferies expects 14% compound growth in sales over fiscals 2025 to 2028, while CLSA sees margin gains as the key catalyst for stock re-rating.