Jefferies retains Buy on Crompton Greaves; sees up to 29% upside

Jefferies has reaffirmed its Buy rating on Crompton Greaves Consumer Electricals with a price target of Rs 330, pointing to the company's ambitious roadmap to double its sales over the next five years, improving operating margins, and a portfolio shift toward premium products.

The target price represents an upside potential of approximately 28.9% from Crompton's trading price of Rs 255.95 on Friday morning.

Jefferies' price target is based on a target P/E multiple of 28 times June 2028 estimated earnings per share (EPS), which trades at a discount to the stock's five-year historical average of around 34 times.


Jefferies believes Crompton’s "Crompton 2.0" strategy, launched in 2023, marks a successful pivot from its earlier strategy focused strictly on short-term margin preservation, which had limited top-line expansion. The brokerage highlighted that the company has doubled its Total Addressable Market (TAM) to Rs 1,600 billion by diversifying into new product categories like Solar pumps and Wires, while reducing sales seasonality.
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Why Jefferies is bullish on Crompton Greaves Consumer Electricals

According to Jefferies, Crompton combines steady revenue growth with a solid margin expansion outlook. Operating profit margins (OPM) are expected to reach 11-12% by FY29. While management targets doubling sales in five years (~14% CAGR), Jefferies conservatively estimates a 12% revenue CAGR and an 18% EPS CAGR over FY26–FY29.

Market leadership in core categories remains a significant growth pillar. Crompton currently holds a 25-26% market share in fans, with premium fans expanding to 25% of the total mix (up from 15% five years ago). Jefferies targets another 100 bps share gain over the next five years, aided by shorter replacement cycles (5-7 years vs 10-12 years previously) and continuous product innovation.

Manufacturing efficiency and alternate channels are also driving performance. Alternate sales channels (rural, e-commerce, modern trade) grew to 27% of sales in FY26. Additionally, a planned Rs 3.5 billion capex for a new ceiling fan facility by FY29 is set to increase in-house production beyond its current 50% level, driving further operating leverage.

Earnings outlook

Jefferies projects Crompton’s EBITDA to rise from Rs 8.27 billion in FY26 to Rs 12.52 billion in FY29. EBITDA margins are modeled to improve steadily from 10.2% in FY26 to around 10.9% by FY28–FY29, supported by cost synergies, premiumization, and pricing actions.

Adjusted net profit is expected to grow from Rs 5.14 billion in FY26 to Rs 8.42 billion by FY29, with EPS increasing from Rs 8.0 to Rs 13.1. The brokerage forecasts EPS growth of 21% in FY27, 18% in FY28, and 15% in FY29.
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Key triggers and risks

Jefferies identified several operational catalysts: market share gains in North and East India (potentially unlocking a Rs 60 billion TAM), the scaling of the new Solar business, and realizing full revenue and cost synergies from the Butterfly integration.

However, key downside risks flagged by the brokerage include prolonged weakness in urban discretionary demand, sharp volatility in raw material costs, and heightened competitive pressure leading to price wars.

Crompton Greaves Consumer Electricals share price

Crompton Greaves Consumer Electricals shares were trading at Rs 255.95, up 1.57% on Friday. The stock has gained 3.12% over the past week, though it remains down 0.91% over the past month and 20.20% over the past year.

At current price levels, Jefferies' target of Rs 330 implies an attractive risk-reward proposition, trading roughly 30% below its historical forward P/E valuation average.


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)