India's Crompton Greaves misses Q3 profit view on soft demand, rising costs

CG Power and Industrial Solutions

14/02/2024 12:57

BENGALURU, Feb 14 (Reuters) - India's Crompton Greaves Consumer Electricals  CROP.NS  reported a
smaller-than-expected rise in third-quarter profit on Wednesday, hurt by subdued demand for its home appliances and
rising raw material costs.
    The company's consolidated net profit rose 0.9% to 859.9 million rupees ($10.4 million) for the three months ended
Dec. 31, well below analysts' estimate of 999.5 million rupees, as per LSEG data.
    Revenue was up 11.6%. However, expenses rose 12.2%, mainly due to the purchase of components. 
    For further results highlights, click here:  FWN3EZ15D 
        
  
    KEY CONTEXT
    Persistent domestic inflation has resulted in consumers curtailing discretionary spending, leading to weak growth
across various consumer segments, according to analysts.
    Havells India  HVEL.NS  reported marginal profit growth for the quarter as demand for its wires and cables just
about helped offset a slowdown in sales of its consumer products. 
    
PEER COMPARISON 
                                      Valuation (next    Estimates (next 12    Analysts' sentiment            
                                      12 months)         months)                                              
                           RIC        PE       EV/EBITD  Revenue    Profit     Mean     # of       Stock to   Div yield
                                               A         growth%    growth%    rating*  analysts   price      (%)
                                                                                                   target**   
 Crompton Greaves           CROP.NS   28.82    20.37     11.75      25.85      Buy      32         0.85       1.05
 Consumer Electricals                                                                                         
 Havells India              HVEL.NS   54.33    36.10     13.57      27.99      Buy      19         0.95       0.55
 V Guard Industries         VGUA.NS   40.54    25.90     13.51      33.75      Buy      18         0.95       0.42
 Polycab India              POLC.NS   33.89    22.86     15.65      15.87      Buy      23         0.85       0.46
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT

 OCTOBER-DECEMBER STOCK PERFORMANCE   
    
   
    -- All data from LSEG
        $1 = 83.0211 Indian rupees

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 (Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Savio D'Souza)
 ((Navamya.GaneshAcharya@thomsonreuters.com; +91 8805175330 ;))