Brokerage firm Anand Rathi has maintained a positive outlook on Crompton Greaves Consumer Electricals, setting a target price of ₹360. The firm highlights growth potential in lighting, appliances, and new segments like solar and wires. Investors may track the company’s profit margins and the progress of the Butterfly brand recovery as it navigates a competitive consumer durables market.
Anand Rathi has maintained a positive outlook on Crompton Greaves Consumer Electricals, setting a price target of ₹360 for the stock. This projection is based on the brokerage's earnings estimates for the first half of fiscal year 2029.
In the second quarter of fiscal 2027, the company reported operating profit figures that aligned with market expectations. Despite experiencing pressure from raw material costs, the company was able to protect its margins through disciplined management of selling and administrative expenses. Its core segments, which include lighting and electrical consumer durables, continued to show stability.
The recovery of the Butterfly brand, which the company acquired previously, remains a significant element of its operational strategy. Beyond its existing product lines, the company is diversifying into new growth areas. Specifically, it is expanding into the wire manufacturing segment and rooftop solar initiatives. These initiatives are intended to act as long-term revenue drivers, reducing dependence on its traditional product categories.
Looking ahead to fiscal 2029, the brokerage expects the company to achieve a profit after tax compound annual growth rate of 16.7%. The firm also anticipates a 110 basis point expansion in profit margins, driven by higher operational leverage. Furthermore, with expectations for disciplined working capital management, the return on capital employed is projected to reach 22.3% by the end of the decade.
However, the consumer electrical sector remains highly competitive. The ability of the company to gain market share in the new solar and wire segments while maintaining profitability against established competitors will be a key factor for future performance. Raw material volatility also continues to be a risk, as price fluctuations can directly impact margins in this sector. Investors may track the company's upcoming quarterly performance to gauge the contribution of new business segments and the sustained recovery of the Butterfly brand.