Crompton Greaves Consumer Electricals Ltd. shares fell 7% even as the company reported double-digit revenue and profit growth for the June quarter, while operating margin expanded from a year earlier.
The stock fell 6.7% to Rs 250.05. The decline came despite positive commentary from Jefferies and Citi, which retained their 'buy' ratings after the first-quarter results.
Crompton Greaves (Q1, Consolidated YoY)
- Net profit up 14.8% to Rs 140 crore versus Rs 122 crore.
- Revenue up 16.9% to Rs 2,335 crore versus Rs 1,998 crore.
- Ebitda up 65.7% to Rs 325 crore versus Rs 196 crore.
- Ebitda margin at 13.9% versus 9.8%.
The operating performance improved as the company took price increases and focused on costs, while supply constraints affected sales during the quarter, according to the brokerages.
Jefferies On Crompton Greaves
Jefferies maintained its 'buy' rating on Crompton Greaves Consumer Electricals with a target price of Rs 330, implying an upside of about 26% from the stock price of Rs 261.15.
The brokerage said the first-quarter performance was in line with its expectations. Timely price increases, lean working capital management and cost controls supported the company's performance during the quarter.
Crompton has passed on about 80% of the inflationary pressure through price increases, according to Jefferies.
Citi On Crompton Greaves
Citi retained its 'buy' rating with a target price of Rs 400, implying an upside of about 53% from Rs 261.15.
The brokerage said supply constraints masked the company's underlying growth in the first quarter. It expects near-term growth to benefit from a recovery in sales lost during Q1, a favourable base and newer categories.
Citi, however, said execution remains a key monitorable amid volatility in raw-material prices and the supply chain.
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