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Investing.com - Investec (LON:INVP) has lowered the price target on Crompton Greaves (NSE:CGPO) Consumer Electricals Ltd (CROMPTON:IN) to INR460.00 from INR490.00 while maintaining a Buy rating.
The price target reduction follows Crompton’s Q1 profit after tax (PAT) declining 19% year-over-year, missing Investec’s and consensus estimates by 10-15%. The company’s performance was impacted by steep revenue declines in seasonal product categories including fans, residential and agricultural pumps, and air coolers due to weak summer conditions.
Despite these challenges, Investec noted that Crompton’s Electrical Consumer Durables (ECD) segment outperformed competitors, posting an 8% year-over-year revenue decline compared to 15-16% declines reported by Havells and V-Guard. Crompton’s ECD revenues have grown at a 12% compound annual growth rate (CAGR) during FY22-25, exceeding Havells’ 9% CAGR.
Investec highlighted Crompton’s recent expansion into solar pumps and solar rooftops, with management evaluating additional category entries to boost revenue growth. The firm attributed the earnings miss primarily to unseasonal rains rather than fundamental business issues.
The investment firm considers Crompton’s current valuation of approximately 28 times FY27 estimated earnings per share (EPS) attractive, and expects industry demand to recover.
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