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Published: Mar 31, 2023
Updated: Mar 31, 2023
At a time when the domestic as well as international stock markets have been facing headwinds from geopolitical issues triggered by the prolonged Russia-Ukraine war, fears of recession in the US and Europe, the failure of Silicon Valley Bank and Signature Bank and widespread allegations against Indian industrialist Gautam Adani, who is said to be close to Prime Minister Narendra Modi, it takes a lot of patience to select the Fortune Scrip. After a lot of thinking, we have picked Crompton Greaves Consumer Electricals Ltd as the Fortune Scrip for this fortnight.
Crompton Greaves Consumer Electricals (CGCEL) is a new-generation consumer company with a 90+ years brand legacy. ‘Crompton Greaves’ is one of the oldest brands in the country and has a rich legacy associated with great quality, high reliability, superior engineering capability and remarkable product design that inspires an immense amount of trust. CGCEL was born in its new form in February 2016 as an independent company under professional management, and the new management is making the brand more contemporary and is building its own legacy to emerge as a more dynamic, youner and innovative Crompton. The management will engineer this by building innovative products that provide meaningful solutions to consumer requirements. During the last few years, the company has launched some breakthrough products like India’s first anti-dust fan and anti-bacterial LED bulb.
This leading fast moving electrical goods (FMEG) player is present in the electrical (which contributes around 71 per cent of revenues) and lighting business (contributing 14 per cent of revenues). The company has acquired Butterfly Gandhimathi Appliances (which contributes around 13 per cent of revenues). The undisputed market leader in the domestic fan industry with a marketshare of 29 per cent, CGCEL has now enhanced its focus on increasing its marketshare in home appliance categories like air cooler, water heater and kitchen appliances. The company is steadily growing in its financial performance with its compounded sales growth during the last 5 years being 7 per cent CAGR and the compounded profit growing at a CAGR of 15 per cent. What is more, prospects going ahead are all the more promising. And that is why we have selected it as the Fortune Scrip for this fortnight. Consider:
Shares of the company were bid up to over Rs 400 per piece of the face value of Rs 2. But in the wake of the recent selling avalanche in the market triggered by the Russia-Ukraine war, fears of an impending recession in the US and Europe, the alleged Adani scam and its widespread impact, and the failure of Silicon Valley Bank and Signature Bank in the US, the share price of CGCEL has tumbled down to Rs 290. This is a highly attractive entry price and discerning investors should start accumulating these stocks to reap a rich harvest going ahead.
September 30, 2024 - Second Issue
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