CLSA has raised its target price for Crompton Consumer to Rs 500 from Rs 370, maintaining an outperform rating. This adjustment comes despite the company’s report of soft near-term demand during a recent analyst meeting, which has led to some weakness in the stock.
CLSA believes that Crompton’s ongoing transformation is headed in the right direction, with a strong focus on premiumisation, a differentiated go-to-market strategy, and changes in its sourcing mix. In the kitchen appliances segment, Crompton aims to achieve a 10% market share in a Rs 30 billion market, up from its current annual run-rate of Rs 0.8 billion to Rs 0.9 billion.
Additionally, the turnaround of Butterfly Gandhimathi is progressing well, with improvements in its channel mix and an uptick in margins. These factors collectively enhance Crompton’s long-term growth prospects despite the current market challenges.
