Consumer Electricals - Year-Long Underperformance Merits A Revisit: Systematix

Systematix Research Report

The significant outperformance of cables and wires companies (led by KEI Industries Ltd., up 33%) versus pure fast moving electric goods names in last one year is in line with our expectations.

Expensive valuations of FMEG companies led us to maintain our cautious stance on these names since a year. After a year-long underperformance, we are now comfortable with their valuations (led by Crompton Greaves Consumer Electricals Ltd., Bajaj Electricals Ltd.), and anticipate decent upsides at the prevailing price levels.

Despite their immense outperformance, we believe cables and wires companies would continue to perform well, given their robust business outlook.

We have broadly retained our estimates for FY23/FY24 and introduced FY25E with 20% earnings growth for the eight companies under coverage.

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