Crompton Greaves Consumer Electrical: A 'Hold' Rating Based on Strong Financials and Market Performance

Crompton Greaves Consumer Electrical, a leading player in the consumer durables and electronics industry, has recently been downgraded to a 'Hold' by MarketsMOJO on 2024-09-23. This decision was based on various factors, including the company's high management efficiency with a ROCE of 48.63% and a low Debt to Equity ratio of 0.04 times.
In terms of financial performance, the company has shown positive results in the quarter ending June 2024. Its operating cash flow was the highest at Rs 843.41 crore, while its net sales and PBDIT were also at their highest levels at Rs 2,137.69 crore and Rs 232.37 crore respectively.

Technically, the stock is currently in a Mildly Bullish range and its MACD and KST technical factors are also Bullish. However, with a ROE of 14.7, the stock is fairly valued with a price to book value of 9.6. It is also trading at a premium compared to its average historical valuations.

One of the key highlights of the company is its high institutional holdings at 86.36%. These investors have better capability and resources to analyze the fundamentals of companies compared to most retail investors. In fact, their stake in the company has increased by 2.35% over the previous quarter.

Crompton Greaves Consumer Electrical has also shown a market-beating performance, generating a return of 50.92% in the last year, which is much higher than the market (BSE 500) returns of 40.49%. With a market cap of Rs 28,841 crore, it is the second biggest company in the sector, behind Dixon Technologies, and constitutes 17.38% of the entire sector. Its annual sales of Rs 7,573.65 crore also make up 14.60% of the industry.

However, the company's long-term growth has been poor, with its operating profit growing at an annual rate of only 3.71% over the last 5 years. This is something investors should keep in mind while considering their investment options. Overall, while Crompton Greaves Consumer Electrical has shown strong financial performance and market-beating returns, its long-term growth may be a cause for concern.