Crompton Greaves Share Price Target at Rs 423: Prabhudas Lilladher
Crompton Greaves Consumer Electricals has delivered a commendable performance in Q4FY25, marked by a 22.5% YoY rise in profit after tax, robust segmental margins, and an EBITDA surge of nearly 30%. Prabhudas Lilladher has reiterated its ‘BUY’ rating on the stock, revising the target price to Rs 423, factoring in a 35x multiple on FY27E earnings. The company’s greenfield CAPEX announcement of Rs 3.5 billion and strong showings in the ECD and Butterfly segments highlight operational strength despite challenges in the lighting vertical.
Q4FY25 Financials: Double-Digit Growth Across Key Metrics
Crompton's Q4FY25 results showcase significant momentum:
| Metric | Q4FY25 | Q4FY24 | YoY Growth |
|---|---|---|---|
| Net Revenue | Rs 20,606 mn | Rs 19,610 mn | 5.1% |
| EBITDA | Rs 2,644 mn | Rs 2,036 mn | 29.9% |
| PAT | Rs 1,695 mn | Rs 1,384 mn | 22.5% |
| EBITDA Margin | 12.8% | 10.4% | +240 bps |
Gross margin improved to 33.9%, reflecting a better product mix and cost efficiency.
Electric Consumer Durables: The Anchor of Growth
The Electric Consumer Durables (ECD) segment remains the cornerstone of Crompton’s performance.
| Segment | Revenue (Rs mn) | YoY Growth | EBIT Margin |
|---|---|---|---|
| ECD | 16,029 | 5.7% | 16.7% |
| Lighting | 2,761 | -1.8% | 15.9% |
| Butterfly | 1,817 | 10.8% | 4.6% |
Fans, solar pumps, and small appliances like mixer grinders (30% YoY growth) drove the ECD performance, while the solar pump segment surpassed Rs 2 billion in FY25.
Lighting Segment Struggles, But Margin Strength Impresses
Despite a 1.8% YoY revenue contraction in the lighting vertical, EBIT margin expanded sharply by 700 basis points to 15.9%, supported by a premium product mix and improvement in the B2C segment. The B2B arm is also gaining ground across industrial and indoor categories.
Butterfly Segment Turns Around Significantly
The Butterfly unit marked a dramatic turnaround with EBITDA margins swinging to 8.6% from a negative 11.9% YoY. Pricing actions and optimized trade schemes underpinned this recovery.
New Growth Engines: Rooftop Solar & CAPEX Initiatives
Crompton is entering the rooftop solar market, leveraging its existing lighting business. A greenfield CAPEX of Rs 3.5 billion has been approved, with the first phase dedicated to fan manufacturing. This strategic investment signals capacity enhancement and product diversification.
Revised Estimates and Valuation Metrics
Prabhudas Lilladher has marginally trimmed FY26/FY27 estimates by 2.8%/2.5% but remains optimistic on growth trajectory. Crompton is now trading at a forward P/E of 26.7x FY27E earnings.
| Metric | FY25 | FY26E | FY27E |
|---|---|---|---|
| Revenue (Rs mn) | 78,636 | 88,832 | 1,01,469 |
| EBITDA Margin | 11.3% | 11.5% | 11.8% |
| PAT (Rs mn) | 5,559 | 6,562 | 7,894 |
| EPS (Rs) | 8.6 | 10.2 | 12.3 |
The Return on Capital Employed (RoCE) is projected at 25% by FY27E, reinforcing the case for operational excellence.
Technical and Market View
While the stock has underperformed over the past year, the 52-week range of Rs 301–484 offers room for upside, especially with improving margin profiles and business diversification. At a current price of Rs 327, Crompton trades at 26.7x FY27E earnings, which is favorable compared to peers like Havells and Bajaj Electricals.
Investor Strategy and Key Takeaways
With EPS CAGR of 19.1% over FY25–27E, steady margin expansion, and strong execution across verticals, Crompton remains well-positioned for long-term investors. The reaffirmed BUY rating and target of Rs 423 offers a potential upside of over 29% from current levels.
Key Investor Levels:
Support: Rs 320
Resistance: Rs 370
Target Price: Rs 423
Bottomline: Growth Story Backed by Fundamentals
Crompton Greaves Consumer Electricals is demonstrating a steady pivot towards profitability through segmental efficiency, product innovation, and prudent capital allocation. With new initiatives like rooftop solar and improved Butterfly performance, the company is realigning itself for future-ready growth. Prabhudas Lilladher’s conviction on the stock is rooted in these strategic shifts, making Crompton a compelling case in India’s consumer durables space.
