Crompton Greaves Consumer Electricals - Q1FY22 First Cut - ICICI Direct

(CMP : Rs. 459; MCap : Rs. 28,830 crore)

Crompton Greaves Consumer Electricals (CGCEL) Q1FY22 numbers were in line with our estimates on the revenue front however below on the earnings front

Q1FY22 Earnings Summary

- CGCEL's revenues came in at Rs. 1050 crore up by 46% YoY (Vs I-direct estimate of ~Rs. 1048 crore) led by strong performance by ECD segment which grew by 48% YoY to Rs. 884 crore (vs. I-direct estimate of Rs. 816 crore). The lighting business also reported a decent growth of 34% YoY at Rs. 166 crore. The YoY growth on the topline was largely due to favourable base

- Gross margin remains almost flat on a YoY basis in Q1FY22 supported by price hikes of ~10%. However, sharp rise in other expenses (up by ~353 bps YoY) dragged overall EBITDA margin by 215 bps YoY to ~12% (vs. I-direct estimate of 14.5%)

- Though PAT grew by 27% YoY to Rs. 95 crore it was lower than our estimate of ~Rs. 119 crore mainly due to lower than expected EBITDA margin

The growth momentum of Q4FY21 continued till early April'21 when the second wave impacted the business. The industry faced one-month lockdown in the peak season of fans. Despite this, company's fan division reported a strong performance and gained market share. However, lower than expected EBITDA margin could be attributable to higher A&P expense in Q1FY22. We await management commentary on company's revenue guidance and EBITDA margin trajectory. While we maintain our positive stance on the stock, the detailed Q1FY22 result update will be released post con-call.

Shares of Crompton Greaves Consumer Electricals Ltd was last trading in BSE at Rs. 458.85 as compared to the previous close of Rs. 473.75. The total number of shares traded during the day was 274991 in over 7726 trades.

The stock hit an intraday high of Rs. 484.95 and intraday low of 453.9. The net turnover during the day was Rs. 128640176.

Source : Equity Bulls

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