Recent Price Movement and Market Context
The stock has been on a downward trajectory for the past three consecutive days, registering a cumulative return of -1.94% during this period. Today’s fall of 0.79% places Crompton Greaves Consumer Electricals below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a sustained weakness in price momentum.
In comparison, the broader Sensex index opened positively with a gain of 359.25 points but later reversed to close 424.02 points lower, settling at 85,641.90, a marginal decline of 0.08%. The Sensex remains close to its 52-week high of 86,055.86, trading just 0.48% below that peak. Meanwhile, the BSE Small Cap index showed modest gains of 0.05%, suggesting selective strength in smaller stocks despite the broader market’s cautious tone.
Long-Term Performance and Sector Comparison
Over the past year, Crompton Greaves Consumer Electricals has recorded a return of -35.96%, a stark contrast to the Sensex’s positive 7.32% performance over the same timeframe. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index across one-year, three-year, and three-month periods. The Electronics & Appliances sector, to which the company belongs, has generally experienced mixed results, but Crompton Greaves Consumer Electricals’ relative weakness stands out.
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Financial Metrics Reflecting Current Challenges
The company’s recent quarterly results reveal several areas of concern. The Profit After Tax (PAT) for the quarter stood at Rs.86.19 crores, showing a decline of 34.5% compared to the average of the previous four quarters. Additionally, the Profit Before Depreciation, Interest and Taxes (PBDIT) for the quarter was Rs.158.37 crores, marking the lowest level recorded in recent periods.
Further, the Debtors Turnover Ratio for the half-year period is at 1.02 times, which is notably low and may indicate slower collection cycles or increased credit risk. These figures contribute to the subdued investor sentiment and the stock’s downward price movement.
Balance Sheet and Valuation Insights
Despite the challenges in profitability and returns, Crompton Greaves Consumer Electricals maintains a relatively conservative capital structure. The average Debt to Equity ratio is low at 0.08 times, suggesting limited reliance on debt financing. This is complemented by a Return on Capital Employed (ROCE) of 29.59%, which indicates efficient use of capital in generating operating profits.
The company’s Return on Equity (ROE) stands at 14.4%, and it trades at a Price to Book Value ratio of 5. These valuation metrics suggest that the stock is priced in line with its historical peer group valuations, reflecting a fair value perspective despite recent price declines.
Institutional Holding and Market Position
Institutional investors hold a significant stake in Crompton Greaves Consumer Electricals, accounting for 86.81% of the shareholding. This high level of institutional ownership indicates that the stock is closely monitored by entities with substantial analytical resources and market expertise.
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Summary of Price and Performance Trends
The stock’s 52-week high was Rs.419.15, which contrasts sharply with the current 52-week low of Rs.261.75. This wide range highlights the volatility and downward pressure experienced over the past year. The decline in profits by 2.6% over the last year further underscores the subdued earnings environment faced by the company.
While the broader market indices have shown resilience, Crompton Greaves Consumer Electricals’ share price trajectory reflects a more cautious market assessment, with the stock underperforming both sector peers and benchmark indices.
Conclusion
Crompton Greaves Consumer Electricals’ fall to a 52-week low of Rs.261.75 marks a notable point in its recent market journey. The combination of subdued quarterly earnings, low debtor turnover, and a price trading below all major moving averages illustrates the challenges the stock currently faces. However, the company’s strong capital efficiency and low leverage provide a degree of financial stability amid these pressures. Investors and market participants will continue to monitor the stock’s performance within the context of sector dynamics and broader market trends.
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