Morgan Stanley has maintained its ‘Equal-weight’ rating on Crompton Consumer Electricals, with a target price of ₹323/share, representing a potential downside of 26.8% from the current market price of ₹441.55/share. During the recent analyst meet, the company provided key long-term guidance and business updates.
Crompton expects revenue growth in the mid-teens over the next four to five years, with 10-12% growth coming from its base business and an additional 2-3% from new businesses. The company is targeting an improvement in EBITDA margins by around 200 basis points, driven by a better product mix and operational efficiencies.
However, consumer demand in the near term remains weak due to inflationary pressures, with festive demand in South India (Onam) reported as being lower year-on-year.
For Butterfly Gandhimathi Appliances, Crompton implemented price hikes of 2-3% in the past two quarters, and expects margins to improve in the second half of the fiscal year. In the long run, Butterfly is targeting 10% EBITDA margins.
