Stock Tales - Crompton Greaves Consumer Electricals - ICICI Direct
Posted On: 2020-12-28 09:22:50 (Time Zone: Arizona, USA)
Crompton Greaves Consumer Electricals (CGCEL) is a compelling long term growth story with a strong brand, leadership position in India s fan industry and healthy financials. Over the years, CGCEL has leveraged its strong distribution network (of 3500+ dealers) to expand into other product categories like water pump, lightings and small appliances. Post demerger in 2015, CGCEL has focused on margin improvement and asset light strategy to ensure a robust return ratio profile (RoE- 34%, RoCE-38%). Despite revenue loss for almost 40 days due to lockdown, CGCEL s revenue is likely to register growth in FY21, supported by strong pent up demand of home appliances in semi-urban and rural India. We believe, going forward, business revival in metros (post ease in lockdown) and increased focus of the government on rural housing, infrastructure will drive demand fo