Crompton Greaves shares jump 6% after CLSA upgrades stock to buy

Crompton Greaves share price target: Shares of Crompton Greaves Consumer Electricals jumped as much as over 6 per cent to Rs 316.35 apiece on the NSE in the early morning trade on Wednesday after brokerage firm CLSA upgraded the electrical equipment company to outperform from buy and raised the target price to Rs 365 from Rs 300 earlier—an upside of 21 per cent. Crompton Greaves shares finished at Rs 308.55, up 3.52 per cent on NSE.

CLSA, in its report, said that the company has embarked on a new growth-focused strategy that could allay investors' concerns. The near-term earnings may look soft due to the lower margin; however, the robust execution should lay a platform for strong medium-term growth, the brokerage added. The company is looking to plug crucial gaps in its portfolio and increase contributions from nascent categories, it said. The analyst believes that a restructured organisational team is being put in place and believes the organisational team will bring optimum focus to each segment. Furthermore, the brokerage said that the execution of these initiatives will be crucial to a re-rating.

Here's how the stock has moved so far: 

Source: NSE

Crompton Greaves share price target: Here is what other brokerages suggest

Citi has maintained a buy call with a target price of Rs 350. Besides, Nomura has continued with a neutral rating on the counter with a target price of Rs 338. The brokerage expects multiple initiatives by management and consumption recovery in the industry to drive a 10 per cent revenue CAGR for Crompton over FY23–26F. The counter trades at 28.5x FY25F P/E, which is believed to be in the fair value zone, the brokerage added.

Crompton Greaves share price history

In the last 12 months (from August 23, 2022), the stock has given a negative return of over 20 per cent. In comparison, the headline index Nifty 50 has rallied over 10 per cent. Crompton Greaves has a market capitalisation of Rs 19,702.12 crore on the BSE, as per data available on the NSE.

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