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Buy Crompton Gr. Con; target of Rs 310: Motilal Oswal

Motilal Oswal is bullish on Crompton Gr. Con recommended buy rating on the stock with a target price of Rs 310 in its research report dated September 11, 2020.

14 Sep 2020 by Broker Research

Motilal Oswal 's research report on Crompton Gr. Con

Bottoming out of Lighting price erosion to reflect in financials: Competitive intensity has bottomed out in the Lighting industry, though not completely over. This can be gauged by the price hikes over the past six months. The last round of price cuts occurred in Aug’19 and will form part of the base Sep’20 onwards. Thus, we expect value growth in the Lighting segment to follow volume growth while margins should be on an uptrend 2QFY21 onwards (full quarter impact expected to reflect in 3QFY21 only).

Outlook

We increase our TP to INR310 (35x Mar’22E EPS v/s 32x earlier). Maintain Buy. Any inorganic growth opportunity or higher dividend payout/buyback option may re-rate the stock further, in our view.

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