Why CG Consumer Electrical Shares Were in Focus Today

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  • Jul 26, 2021 - Why CG Consumer Electrical Shares Were in Focus Today

Why CG Consumer Electrical Shares Were in Focus Today

Jul 26, 2021

Shares of Crompton Greaves Consumer Electricals were trading up by 2.4% on the BSE today after the company declared its results for the June 2021 quarter.

Net sales of the company were up by 45.8% year on year (YoY) at Rs 10.5 bn in June 2021 against Rs. 7.2 bn in the same period last year.

Revenue from the electric consumer durables (ECD) segment came in at Rs 8.8 bn while revenue from the lighting products segment came in at Rs 1.6 bn.

As a result, the earnings before interest , tax, depreciation, and amortisation (EBITDA) of the company increased by 20.8% YoY to Rs 1.4 bn for the quarter from Rs. 1.2 bn in the June 2020 quarter.

However, the company's June 2021 quarter EBITDA margin fell to 11.8% compared to 14 % in the previous year.

Consequently, Crompton Greaves Consumer Electricals reported a net profit of Rs 900 m as against a profit of Rs 700 m in the same period last year.

The earning per share (EPS) also increased to Rs 1.51 in June 2021 from Rs. 1.19 in June 2020.

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Strong growth across segments

The company's revenue from the fans segment grew on account of a strong performance in the premium and decorative segment while the pumps segment grew due to demand of residential pumps.

The appliances business continued to deliver strong growth based on excellent consumer offerings of core categories such as coolers, geysers, and mixer grinders.

The company's lighting business also continued to deliver double digit EBIT margins.

The company's growth momentum during the March 2021 quarter continued until early April when the second wave impacted the business.

After a rough period from mid-April, business recovery began in early June with the easing of lockdown restrictions.

While commenting on the June quarter financials of Crompton Greaves Consumer Electricals, managing director Shantanu Khosla said,

  • ECD segment delivered strong growth across categories and geographies.

    Business to Consumer (B2C) LED lighting business maintained its upward growth trajectory.

    While commodity cost pressures remained, timely actions have mitigated their impact

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Promoter/FII Holding

Promoters held 5.9% stake in the company as of 30 June 2021, while foreign institutional investors (FII) and mutual funds' ownership stood at 50.5% and 31.5% respectively.

Equitymaster on capital goods stocks

Here's what Aditya Vora, Financial Writer at Equitymaster, wrote about the capital goods sector in one of the editions of Profit Hunter:

  • I'm a firm proponent of the economic revival theme in the stock market. I'm bullish on capital goods and infrastructure stocks.

    These sectors have emerged stronger from an elongated down cycle. There is also a strong momentum in economic indicators which is in favour of these stocks.

    Indicators like rising construction equipment sales, record highway construction run rate, capacity expansion by private players in the cement, metals, and consumer durables gives us confidence of a strong capex cycle ahead.

    There may be a near term speed bump to the economic recovery due to the third wave. However, I believe we are at an inflection point with regards to the capex cycle.

    The cycle has turned up.

The recent Hidden Treasure recommendation is a fundamentally strong business in the capital goods space that is 'essential' to the infrastructure revival. You can read the report here (requires subscription).

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How the stock markets reacted to Crompton Greaves Consumer Electricals' results

Crompton Greaves share price opened at Rs 458 on the NSE against its previous close of Rs 458.9.

During the day the shares were trading 2.4% up at Rs 467.5.

On BSE, the shares opened at Rs 458.8 and are now trading at Rs 468.1.

Overall, the broader S&P BSE CONSUMER DURABLES Index was down by 0.5%.

Over the last 30 days, the Crompton Greaves Consumer Electric share price was up 13.3%.

And over the last year, shares of Crompton Greaves Consumer Electric share price are up by 86.7%.

About Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals is a leading player in India's consumer electricals sector.

It has a wide portfolio of products, which includes fans, lighting, pumps, and household appliances.

The company dates its origin back to 1947 when Mr. L K Thapar, an eminent Indian industrialist, took over Crompton Parkinson Works and Greaves Cotton & Crompton Parkinson. In 1966, the two companies were merged to form CG Power and Industrial Solutions.

In 2015, the consumer durables business was demerged to form a separate entity, Crompton Greaves Consumer Electricals.

To know more about the company, you can check out and Crompton Greaves Consumer Electricals fact sheet and Crompton Greaves Consumer Electricals quarterly results.

You can also compare Crompton Greaves Consumer Electricals with its peers

Crompton Greaves Consumer Elec. vs Bajaj Electricals

Crompton Greaves Consumer Elec. vs Symphony

Crompton Greaves Consumer Elec. vs TTK Prestige

Crompton Greaves Consumer Elec. vs Bajaj Electricals

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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Sep 27, 2021 03:37 PM


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