Home appliance maker Crompton Greaves Consumer Electricals reported better than expected performance in the second quarter (Q2) of 2024-25 (FY25), outperforming peers due to a strong showing in the electrical consumer durables (ECD) segment. The company's standalone sales rose by 10.5 per cent, while the ECD segment continued its growth momentum with a 12.5 per cent increase in revenues, driven by volume and pricing gains.
The stock of Crompton Greaves Consumer Electricals has shed about 12 per cent since the start of the month due to a muted near-term outlook. Demand slowdown across segments and pre-buying in cooling products in the June quarter are expected to weigh on revenues going ahead. In addition to pre-buying in the preceding quarter, demand conditions are soft on account of lower consumer spending due to inflationary conditions, weakness in rural demand and the fact that Q2 remains a soft quarter after a strong summer.
Good results for the January-March quarter (Q4) of FY24 and strong seasonal demand have led to strong investor interest in Crompton Greaves (CG) Consumer Electricals which is hitting new highs. While there's bullish consensus on the company's future performance, the stock has gained over 40 per cent in the last six months and valuations may become stretched. The Q4FY24 revenue rose 9.5 per cent YoY to Rs 1,960 crore.
Investors and analysts also questioned an expensive aircraft acquisition in the March quarter and possible insider trading.
Crompton Greaves Ltd said on Wednesday it has acquired businesses of two Hungary-based companies for about euro35 million.
Electrical equipment maker Crompton Greaves today said it will acquire Ireland-based Microsol Holdings Ltd for an enterprise value of around euro10.50 million (over Rs 57 crore).
The transformer factory in Canada contributes about three per cent to the company's total sales.
This time its international business is in the limelight.
SM Trehan, MD of Crompton Greaves says topline growth was driven by growth in power systems, consumer products and industrial systems.
A meeting of the board of directors of Crompton Greaves Ltd will be held on January 30 to consider and take on record the unaudited financial results for the quarter ended December 31, 2002.\n\n
It reported a loss of Rs 36 crore (Rs 360 million), the first such negative result in 10 years.
If the index is unable to sustain above 24,500 levels, technically it can then slip to its 200-DMA placed at 23,365 levels.
The Greaves Ltd's board has decided to divest its 23.67 per cent stake in Crompton Greaves Ltd to B M Thapar Group.
Retail investors now own a larger share of smallcap companies than they did a year ago, thanks to their conviction in mutual fund (MF) schemes focused on this segment. Data from Capitaline shows that MFs' average holding in the National Stock Exchange Nifty Smallcap 250 Index stood at 9 per cent at the end of the October-December quarter of 2023-24 (FY24), up from 7.76 per cent in the same quarter of 2022-23.
Crompton Greaves will sell its stake in US-based Paxonet Communications to Conexant Systems for $1.5 million.
Is India headed there again? questions Ajit Balakrishnan
The index is currently trading at 149 per cent of its historical P/B valuation, surpassing its previous peak of 125 per cent made in 2020-21.
The rally in the equity markets in the second half of 2023 has led to a sharp surge in the cutoff for stocks to qualify as largecaps and midcaps. On the latest list put out by the Association of Mutual Funds in India (Amfi), the smallest largecap stock now has a market capitalisation (m-cap) of Rs 67,000 crore, 35 per cent higher than in July 2023. In the case of midcaps, the cutoff has surged 26 per cent to Rs 22,000 crore.
'Focus on 19,400/64,900 as the key resistance levels for the Nifty/Sensex.'
It's all eyes on the consumer durables sector during the festival season after a weak Q1FY24 and Q2FY24 was impacted by an erratic monsoon. Traditionally, this period sees the highest number of purchases. Dealers and manufacturers are complaining about low business-to-consumer (B2C) off-take during the first half.
Unseasonal rains watered down the performance of consumer durables companies as temperatures cooled, impacting the sales of refrigerators and air conditioners (ACs) in the 2023-24 (FY24) April-June quarter. Centrum says in its report on the sector that the trade channel indicates a 25-30 per cent year-on-year (YoY) decline in sales of refrigerators and ACs in April and May due to restricted buying. "While some green shoots in demand were visible in June, overall growth for the quarter is likely to remain at a negative 10-12 per cent," observes the brokerage.
With sales of cooling products turning out dismal this summer due to unseasonal rains, the stocks of related companies are now off their March highs. Shares of fan and air conditioner makers such as Voltas, Symphony, Orient Electric, Johnson Controls-Hitachi Air Conditioning and Crompton Greaves are down 5-23 per cent since March when the summer season saw a firm onset. In comparison, the BSE Sensex index is up 10 per cent.
Operating margins for some companies dipped in Q3, 2021-22 but this sector could be nearing the bottom of the cycle in terms of profits.
Invest in quality companies that make profits, advises stock market expert and rediffGURU Samraat Jadhav.
The average top executive monthly compensation is Rs 1 crore. The median employee salary is now Rs 820,000.
As many as 15 companies, including Adani Copper Tubes, LG Electronics and Wipro Enterprises, with committed investment of Rs 1,368 crore, have been selected as beneficiaries under the PLI scheme for the white goods sector, the government said on Tuesday. In March, the commerce and industry ministry had reopened the application window for its Rs 6,238-crore PLI scheme for white goods -- air-conditioners (ACs) and LED lights-- with an aim to accommodate more players as several firms had expressed interest in the initiative. Last year, as many as 46 firms, including Daikin, Panasonic, Syska and Havells, with committed investment of Rs 5,264 crore were selected in the first round the scheme.
Ajit Mishra, vice president, research, Religare Broking, answers your queries.
Analysts caution against volatility and recommend buying stocks of companies that are on strong fundamental footing that have been beaten down badly in the recent carnage.
Judging by the actions of most companies, you wouldn't think they cared two hoots what shareholders thought or didn't think, says Shobhana Subramanian.
While the Budget might have been a sentiment booster for the sector, firms with market dominance emerge as favourites.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
J G Kulkarni, executive vice-president at Crompton Greaves and newly appointed president of the Indian Electrical & Electronics Manufacturers' Association speaks to Businsess Standard on the challenges and opportunities.
Ajit Mishra, vice president, research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
Contrarian stocks can help investors generate much higher returns than buying shares of companies that have shown consistent high growth for years.
Five stocks - Havells, NCC, Suzlon, Blue Star and Crompton Greaves look most attractive after the recent course correction.
After a long wait, the Shapoorji Pallonji Group has closed the sale process of its consumer durables business under the Eureka Forbes label by picking the American private equity fund Advent International's Rs 4,400-crore offer for a 72 per cent stake. The sale process, which began in November 2019, will help the over 156-year-old SP Group pair the debt pile and sharpen the focus on the flagship construction and engineering business under Afcons. The valuation of Rs 4,400 crore for a 72.56 per cent stake is is at an enterprise level and subject to closing adjustments and also includes an open offer for the remaining stake after the demerger and listing of Eureka Forbes, the SP group said in a statement on Sunday.
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It may not be a war cry yet, but the voice is definitely getting shriller.
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