Crompton Greaves Consumer Electricals - Q4FY21 First Cut - ICICI Direct

(CMP : Rs. 389; MCap : Rs. 24,406 crore)

Crompton Greaves Consumer Electricals (CGCEL) Q4FY21 performance was much ahead of our expectations on all fronts led by a healthy performance by both ECD (Electrical Consumer Durables) and lighting divisions.

Q4FY21 Earnings Summary

- CGCL's revenues came in at Rs. 1522 crore up by 48% YoY (Vs I-direct estimate of ~Rs. 1322 crore) led by strong performance by ECD segment which grew by 61% YoY to Rs. 1193 crore (I-direct estimate: Rs. 910 crore). The lighting business also reported a decent growth of 15% YoY at Rs. 329 crore. Strong rural demand along with a favourable base helped drive strong performance for the company in Q4

- Gross margins witnessed a marginal dip of 81 bps YoY mainly due to higher raw material cost. However savings in employee and other costs by 84 bps and 120 bps YoY respectively helped drive EBITDA margin up by 122 bps YoY to 15% (Vs I-direct estimate of ~14%)

- The PBT came in at Rs. 231 crore, up by 69% YoY (Vs I-direct estimate: Rs. 178 crore) mainly tracking sales growth and higher EBITDA margin

- The PAT at Rs. 249 crore also came in better than our estimate of Rs. 134 crore supported by tax gains in Q4FY21. Like to like PAT after adjusting for impact of IT Assessment order (including interest thereon) for previous years has grown by 63.5% YoY

For FY21 company reported revenue growth of 6% YoY despite sales loss in Q1 due to lockdown. The company reported 24% YoY growth in net profit in FY21 led by 200 bps increase in EBITDA margin to 15%. The company announced total dividend of Rs. 5.50/share for FY21 (56% payout) and maintains debt free status (with net cash balance of Rs. 895 crore) in the book. We await management commentary on the impact of second wave and high raw material inflation in both ECD and lighting products. While we maintain our positive stance on the stock, the detailed Q4FY21 result update will be released post con-call.

Shares of Crompton Greaves Consumer Electricals Ltd was last trading in BSE at Rs.388.8 as compared to the previous close of Rs. 383.5. The total number of shares traded during the day was 74400 in over 2289 trades.

The stock hit an intraday high of Rs. 397.8 and intraday low of 384.45. The net turnover during the day was Rs. 29175706.

Source : Equity Bulls

Keywords