Motilal Oswal - Crompton Greaves Consumer Electricals (CROMPTON) MOSL: CROMPTON GR. CON (Buy)-New product launches to drive growth

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Motilal Oswal

MOSL: CROMPTON GR. CON (Buy)-New product launches to drive growth

Crompton Gr. Con: New product launches to drive growth; Lighting segment to see margin pressure given increased competitive pricing

(CROMPTON IN, Mkt Cap USD2.2b, CMP INR249, TP INR305, 22% Upside, Buy)

We recently attended an analyst meet of Crompton Greaves. We highlight below the key takeaways from our meeting.

Price hikes taken in the Fans category to mitigate cost pressures

To mitigate the cost pressure on account of rise in key raw material prices (copper), Crompton went in for price hikes in the Fans category (1.5-2.0%) across its range. Crompton expects the Fans industry to register a 6-7% volume growth. Premium category sales, which now accounts for 18-20% of the overall Fans category sales, remains Crompton’s focus area.

Strong new product pipeline in Fans segment to ensure growth momentum

In line with its strategy of growth through new product introduction and innovation, Crompton has lined up 3-4 new product ideas in the Fans category. Air 360 has been launched and rest of the new ideas should be launched either by end-FY19 or by 1QFY20. Anti-dust fan is now an INR2b product category, and Crompton expects the brand to continue growing as penetration in multiple geographies is still low.

05/09/2018 6 EN

Underlying

Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals Limited manufactures and markets a range of consumer products. The Company's main products/services include lighting products (luminaries and light sources) and electrical consumer durables (fan and appliances and pumps). It operates through two segments: Lighting Products and Electrical Consumer Durables. Its Lighting Products segment comprises luminaires and light sources. Its Electrical Consumer Durables segment comprises fans, appliances and pumps. It offers ceiling fans, table fans, pedestal fans, wall mounted fans, domestic exhaust fans, special fans and personal fans. It offers lighting products, including lamps, consumer luminaires, solar and lighting automation. Its household appliances include geysers, mixer grinders, toasters and irons. Its pumps are classified into industrial, agricultural and domestic pumps, and offers surface pumps, submersible pumps, accessories and pumping systems.

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INE299U01018 National Stock Exchange of India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: CROMPTON GR. CON (Buy)-New product launches to drive growth

Crompton Greaves Consumer Elec Ltd: 4 directors

CRMPTN.GREAVES CSM.ELEC increases its risk exposure and slightly lowers to Neutral

MOSL: CROMPTON GR. CON (Buy)-In line revenue, margin-led earnings surprise

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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