Crompton Greaves Shares Rally 16% To Hit 52-Week High On Strong Quarterly Results

Crompton Greaves Consumer Electrical’s share price gained 16% and hit its 52-week high of ₹398.80 on Friday after the company posted strong results which impressed the brokerages. 

What Happened: In the March quarter, the company reported a 1.42% year-on-year gain in net profit to ₹133.43 crore. It increased 56.14% from the previous quarter as it reported a net profit of ₹85.45 crore in the December quarter. Its revenue from operations increased 9.49% to ₹1,961 crore in the quarter. 

According to the company, Crompton 2.0 initiative delivered the highest-ever quarterly revenue with their standalone business delivering double-digit revenue growth and strong EBIT margins. 

The company also declared a dividend of ₹3 per share. 

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The company's management said demand for fans remains strong in Q1FY25 due to the ongoing heatwave and global warming, shoring up demand for cooling appliances. 

Brokerage Views: Kotak Institutional Equities gave an "add" rating and raised the target price to ₹350. Brokerage said the near-term outlook is positive due to robust summer demand. The electric consumer durables (ECD) segment's EBIT came ahead of the brokerage's estimates, due to better margins.

The brokerage revised the earnings per share (EPS) estimate for FY25-26 by 7-8% due to higher margins in the ECD segment. 

HDFC Securities maintained their "buy" call and increased the target price to ₹400 as they see the sustained execution of Crompton 2.0 strategy and industry outperformance will help rerate the stock. The ECD margins surpassed the brokerage's estimates. The three rounds of price hikes taken by the company in the last few months and another in the pipeline bode well for the company. 

Price Action: Crompton Greaves shares rose 16% to ₹393.50 in the afternoon session on Friday. 

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