When it comes to investing in the Indian consumer electricals space, Crompton Greaves often finds itself in the spotlight. Whether you’re a retail investor scanning for long-term bets or a seasoned analyst tracking the sector, this company probably rings a bell. But the big question remains—is Crompton Greaves still a good stock to hold in your portfolio? This blog dives deep into Crompton Greaves’ financial performance, market standing, competitive dynamics, and future outlook. Let’s break it down.
What Is Crompton Greaves and What Does It Do?
Crompton Greaves Consumer Electricals Ltd. (CGCEL) is a household name in the Indian electricals market. The company manufactures and markets a wide array of products including fans, LED lighting, water pumps, geysers, air coolers, and small kitchen appliances. With a deep-rooted brand and a strong distribution network, Crompton Greaves serves both urban and rural India, delivering reliable consumer products for daily use.
Established after a demerger from Crompton Greaves Ltd. in 2016, CGCEL took over the consumer products division while the industrial businesses moved to a separate entity. Since then, Crompton Greaves has carved a niche for itself in the Electrical Consumer Durables (ECD) and Lighting segments.
How Has Crompton Greaves Performed Financially?
Let’s start with the numbers. Crompton Greaves reported a revenue of ₹7,312.81 crore for FY24, registering a growth of 11.06% YoY. Net profit stood at ₹111.92 crore, up by a solid 27.74% from the previous fiscal year. The EBITDA margin came in at 15.2%, improving by 160 basis points.
Key Financial Ratios (FY24):
| Ratio | Value |
|---|---|
| Price-to-Earnings (P/E) | 41.10 |
| Price-to-Book (P/B) | 6.94 |
| Dividend Yield | 0.89% |
| Return on Equity (ROE) | 15.6% |
| Return on Capital Employed (ROCE) | 15.8% |
(Source: Screener)
These figures indicate a company that is financially stable with healthy returns and growing profitability. However, the relatively high P/E ratio also suggests a premium valuation, which could be a point of caution for value-focused investors.
What Are Crompton Greaves’ Key Business Segments?
Crompton Greaves operates through two main business verticals:
1. Electrical Consumer Durables (ECD)
This is the core segment, contributing the majority of the company’s revenue. Products include fans, water heaters, pumps, and kitchen appliances. In Q3 FY25, the ECD segment grew by 6% YoY, with particularly strong performance in the pumps category, which grew by 19% YoY due to solar pump order execution.
2. Lighting
Although smaller in contribution compared to ECD, the lighting business includes LED bulbs, battens, and other energy-efficient products. The company continues to innovate in this space to align with evolving market needs.
Crompton Greaves also owns a majority stake in Butterfly Gandhimathi Appliances, expanding its reach in kitchen appliances. However, performance in this unit has been mixed, with a 16% YoY revenue decline in Q2 FY25, albeit with a 42% QoQ improvement.
How Does Crompton Greaves Compare to Its Peers?
Let’s compare Crompton Greaves to other major players in the consumer electricals sector like Havells India, Bajaj Electricals, and V-Guard Industries. The comparison below helps us understand its relative market position.
Peer Comparison Table (As of April 15, 2025):
| Company | Market Cap (₹ Cr) | P/E Ratio | P/B Ratio | ROE (%) |
|---|---|---|---|---|
| Havells India | 98,570.6 | 70.41 | 12.13 | 18.0 |
| Bajaj Electricals | 5,940.8 | 57.30 | 4.00 | 7.74 |
| V-Guard Industries | 15,858.8 | 53.08 | 8.74 | 13.8 |
| Crompton Greaves | 21,520.0 | 41.10 | 6.94 | 15.6 |
(Source: Screener, Groww, Economic Times)
Crompton Greaves sits in the mid-to-upper range in terms of valuation and profitability. While Havells leads in scale and premium pricing, Crompton Greaves maintains a healthy balance of margin and market share. Bajaj Electricals and V-Guard trail in ROE, giving CGCEL a more favorable capital efficiency profile.
What Strategic Initiatives Is Crompton Greaves Undertaking?
The company has rolled out the Crompton 2.0 strategic vision aimed at boosting long-term growth. The key pillars include:
- Premiumization: Launching high-end products in categories like air coolers, geysers, and decorative lighting.
- Innovation: Investing in R&D for smart, energy-efficient products.
- Brand Building: Increased spending on advertising to improve top-of-mind awareness.
- Distribution Expansion: Strengthening presence in Tier II and III cities.
Crompton Greaves has also targeted $1 billion in sales for FY25, supported by the integration of Butterfly and growth in the ECD segment.
How Is the Stock Performing?
As of April 15, 2025, Crompton Greaves’ share price stands at ₹335.30, with a 52-week range between ₹280.10 and ₹483.65. The stock has gained 15.70% over the past 12 months.
While the stock has shown recovery from its recent lows, it remains well below its 52-week high, possibly indicating that the market is still pricing in some uncertainty, particularly around margin stability and the performance of the Butterfly segment.
What Are the Strengths of Crompton Greaves?
- Strong Brand Equity: Crompton Greaves is a trusted name with high recall value across consumer segments.
- Diverse Product Portfolio: Offers a broad mix of ECD and lighting products, with expansion into premium categories.
- Healthy Financials: Consistent ROE and ROCE with improving margins.
- Distribution and Reach: Extensive retail footprint covering pan-India markets.
These factors provide a solid foundation for Crompton Greaves to defend and grow its market position.
What Are the Risk Factors?
- Margin Pressures: Operating profit margin slipped from 11.2% in FY23 to 9.8% in FY24, highlighting cost challenges.
- High Valuation: The P/E of 41.10 is elevated, especially compared to sector average, suggesting limited upside unless earnings grow meaningfully.
- Concentration in India: A largely domestic market focus makes Crompton Greaves vulnerable to Indian macroeconomic cycles.
- Competitive Landscape: Presence of deep-pocketed players like Havells and fast-charging challengers like V-Guard increases pricing and innovation pressure.
- Mixed Performance of Acquisitions: The Butterfly acquisition, though strategic, has delivered inconsistent results and may dilute consolidated profitability.
What Lies Ahead for Crompton Greaves?
With the Crompton 2.0 framework in motion, the company aims to climb the value chain by:
- Rolling out IoT-enabled smart appliances
- Deepening its footprint in aspirational segments
- Strengthening digital sales channels
- Driving higher revenue from non-urban regions
The goal to cross ₹8,500 crore in FY25 revenue hinges on both organic growth in ECD and a turnaround in Butterfly’s performance. Investors should also watch for execution risks and any deterioration in core margins.
Crompton Greaves is clearly in a transition phase. It has the brand, reach, and intent to capture larger market share, especially in an India that’s increasingly electrified and urbanized. But whether it can convert intent into sustained margin growth and shareholder returns is what remains to be seen.
If you are tracking Crompton Greaves, keep an eye on its quarterly performance—especially how it manages operating margins, executes new launches, and turns around Butterfly. The valuation is rich, but so is the potential.
Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Please consult your financial advisor before making any investment decisions.
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