Recent Price Movement and Market Context
The stock price of Crompton Greaves Consumer Electricals touched Rs.262.95 today, representing its lowest point in the past year. This decline comes after four consecutive days of losses, during which the stock has recorded a cumulative return of -3.97%. On the day of the new low, the stock underperformed its sector by 0.45%, signalling relative weakness compared to peers in the Electronics & Appliances sector.
Technical indicators also highlight the stock’s subdued momentum, as it is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning suggests a persistent downward trend over both short and long-term horizons.
In contrast, the broader market environment shows a more positive tone. The Sensex opened higher at 85,008.93 points, gaining 108.22 points (0.13%) before settling near 84,954.84 points, a marginal change of 0.06%. The index remains close to its 52-week high of 85,801.70, trading approximately 1% below that peak. Additionally, the Sensex is supported by bullish moving averages, with the 50-day moving average positioned above the 200-day moving average, indicating overall market strength. Mid-cap stocks are also leading gains, with the BSE Mid Cap index rising by 0.14% on the day.
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Long-Term and Recent Performance Analysis
Over the past year, Crompton Greaves Consumer Electricals has recorded a return of -35.12%, a stark contrast to the Sensex’s positive 6.04% return over the same period. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index across one-year, three-month, and three-year timeframes.
The stock’s 52-week high was Rs.419.15, indicating a substantial decline of approximately 37% from that peak to the current low. This price movement reflects a period of subdued investor confidence and challenges in the company’s financial results.
Financial Metrics and Profitability Trends
Recent quarterly results reveal a contraction in profitability. The Profit After Tax (PAT) for the quarter stood at Rs.86.19 crore, showing a decline of 34.5% compared to the average of the previous four quarters. Similarly, the Profit Before Depreciation, Interest, and Taxes (PBDIT) for the quarter was Rs.158.37 crore, marking the lowest level recorded in recent periods.
Additionally, the Debtors Turnover Ratio for the half-year was 1.02 times, the lowest in recent assessments, indicating slower collection cycles. These factors contribute to the subdued financial performance and may have influenced the stock’s downward trajectory.
Balance Sheet Strength and Efficiency Indicators
Despite the recent pressures on earnings, Crompton Greaves Consumer Electricals maintains certain strengths in its financial structure. The company’s average Debt to Equity ratio is low at 0.08 times, suggesting limited reliance on debt financing. This conservative capital structure may provide some stability amid earnings fluctuations.
Management efficiency metrics also show positive aspects. The Return on Capital Employed (ROCE) stands at 29.59%, indicating effective utilisation of capital resources. The Return on Equity (ROE) is recorded at 14.4%, reflecting a reasonable level of profitability relative to shareholder equity.
Valuation metrics show the stock trading at a Price to Book Value of 5, which is considered attractive relative to historical averages of its peers. However, the stock’s profits have declined by 2.6% over the past year, aligning with the broader trend of subdued earnings growth.
Shareholding Pattern 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 reflects the presence of investors with substantial resources and analytical capabilities monitoring the company’s fundamentals closely.
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Summary of Key Factors Influencing the Stock’s Recent Low
The recent 52-week low of Rs.262.95 for Crompton Greaves Consumer Electricals is the result of multiple factors. The stock’s price has been pressured by a series of quarterly earnings that show contraction in profits and slower debtor turnover. The company’s long-term growth rate in operating profit has been modest, at an annual rate of 3.50% over the last five years, which may have contributed to subdued market sentiment.
While the broader market and sector indices have shown resilience and gains, the stock’s technical indicators and price performance have lagged behind. The combination of weaker recent earnings, lower returns over the past year, and trading below all major moving averages has culminated in the current price level.
Nevertheless, the company’s low debt levels, strong management efficiency as reflected in ROCE and ROE, and significant institutional ownership provide a backdrop of financial discipline and oversight.
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