crompton greaves ce26jul21...crompton greaves ce (lhs) rel to nifty (rhs) below expectations:...

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Emkay

India Equity Research | Consumer Durables

July 26, 2021

Result Update

Crompton Greaves CE Refer to important disclosures at the end of this report

Marred by regional disruptions

Revenue and EBITDA missed our estimates by 10% and 16%, respectively. Although

revenue of ECD / Lighting businesses rose 48% / 34% yoy, it was restricted by the delayed

opening-up of South and East regions.

Gross margins surprised positively with a 150bps qoq expansion despite commodity

headwinds, which were offset by price increases, mix improvement, and continued cost

optimization. Other opex exceeded estimates as the company stepped up its investments.

It is on track to launch new product categories in H2FY22. Demand recovery is progressing

well with normalized levels of channel inventory & absorption of price hikes. It has locked-

in advance contracts for selected commodities at lower prices to mitigate price volatility.

We raise FY22-24E ECD revenue estimates by 4-6%, factoring in management

commentary on demand recovery & price hikes. Increase in EPS estimates is limited to 2-

3% due to lower other income. Retain Buy with a revised TP of Rs525 (43x Sept’23E EPS).

Relative price chart

Source: Bloomberg This report is solely produced by Emkay Global. The following person(s) are responsible for the production of the recommendation:

Naval Seth

[email protected]

+91 22 6624 2414

Sonali Shah

[email protected]

+91 22 6624 2482

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Jul-20 Sep-20Nov-20 Jan-21 Mar-21May-21 Jul-21

%Rs

Crompton Greaves CE (LHS) Rel to Nifty (RHS)

Below expectations: Consolidated revenue of Rs10.5bn was up 45.9% yoy but missed

our estimate by 10%. Both the segments – Electrical Consumer Durables and Lighting – have

driven growth, with the former seeing 48% yoy growth and the latter 34%. EBITDA was up

24% yoy to Rs1.3bn, while EBITDA margins stood at 12% (-215bps yoy). Despite commodity

headwinds, gross margin was down by just 19bps yoy and was up 150bps qoq. Other opex

increased by 106% yoy due to the uptick in investments. PAT was up 27% to Rs948mn but

missed our estimate by 22%.

Outlook

Crompton has been delivering well on the stated path of market share gains, premiumization

and cost management. The subdued Q1 operating performance was due to the step-up in

investments in advertising, Go-to-Market initiatives, new business development and capability

building, despite the impact of lockdowns on revenues. The medium-term strategy remains

intact with a focus on new product launches, distribution reach expansion, ramp-up in product

portfolio for appliances and sustained cost optimization. Lighting business’ growth is expected

to remain moderate in the near term as B2B and B2G would take time to recover, while B2C

is expected to bounce back faster. Management reiterated its target of structurally maintaining

double-digit Lighting EBIT margins. The lock-in of the prices of selected commodities through

advance contracts would safeguard CG, if commodity inflation continues in the near term.

Although price hikes in the last six months have been absorbed with limited impact on

demand, continued commodity inflation might affect demand recovery, in our view.

Key risks: delayed demand recovery, market share losses, slow execution of new product

launches, supply-chain disruptions, and sustained commodity price inflation.

Please see our sector model portfolio (Emkay Alpha Portfolio): Consumer Durables (1)

CMP Target Price

Rs 468 Rs 525 (▲) as of (July 26, 2021) 12 months

Rating Upside

BUY (■) 12.0 %

Change in Estimates

EPS Chg FY22E/FY23E (%) -/2

Target Price change (%) 9.3

Target Period (Months) 12

Previous Reco BUY

Emkay vs Consensus

EPS Estimates

FY22E FY23E

Emkay 9.6 11.3

Consensus 9.5 11.4

Mean Consensus TP (12M) Rs 473

Stock Details

Bloomberg Code CROMPTON IN

Face Value (Rs) 2

Shares outstanding (mn) 628

52 Week H/L 497 / 238

M Cap (Rs bn/USD bn) 294 / 3.95

Daily Avg Volume (nos.) 22,80,380

Daily Avg Turnover (US$ mn) 12.7

Shareholding Pattern Jun '21

Promoters 6.0%

FIIs 40.2%

DIIs 43.7%

Public and Others 10.2%

Price Performance

(%) 1M 3M 6M 12M

Absolute 14 26 14 87

Rel. to Nifty 14 15 2 32

Financial Snapshot (Consolidated)

(Rs mn) FY20 FY21 FY22E FY23E FY24E

Revenue 45,203 48,035 54,696 61,959 69,777

EBITDA 5,991 7,205 7,630 8,984 10,187

EBITDA Margin (%) 13.3 15.0 14.0 14.5 14.6

APAT 4,964 6,167 5,995 7,083 8,136

EPS (Rs) 7.9 9.8 9.6 11.3 13.0

EPS (% chg) 23.6 24.1 (2.8) 18.2 14.9

ROE (%) 38.7 36.3 29.1 30.1 30.1

P/E (x) 59.2 47.7 49.1 41.5 36.1

EV/EBITDA (x) 48.7 39.6 37.0 31.1 27.1

P/BV (x) 20.0 15.2 13.5 11.7 10.2

Source: Company, Emkay Research

http://www.emkayglobal.com/

https://www.asiamoney.com/brokers

Crompton Greaves CE (CROMPTON IN) India Equity Research | Result Update


July 26, 2021 | 2

Exhibit 1: Actual vs. Estimates (Q1FY22)

(Rs mn)

Actual

Estimate % variation Comment

Emkay Consensus Emkay Consensus

Revenue 10,505 11,637 11,007 -10% -5% Revenue miss across segments

EBITDA 1,250 1,484 1,539 -16% -19% Higher opex led by increased investments

EBITDA Margin 11.9% 12.8% 14.0% -85 bps -208 bps

PAT 948 1,218 1,202 -22% -21% Lower other income and higher finance cost

Exhibit 2: Summary of quarterly financials

Rs mn Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 YoY (%) QoQ (%) 2-year CAGR

Electrical consumer durables 5,965 9,317 10,359 11,930 8,844 48.3 (25.9) -9%

Lighting products 1,236 2,815 3,123 3,291 1,661 34.4 (49.5) -22%

Net Sales 7,201 12,132 13,482 15,221 10,505 45.9 (31.0) -12%

Raw Material 4,858 8,133 9,156 10,525 7,107 46.3 (32.5) -11%

as % of sales 67.5 67.0 67.9 69.2 67.7

Employee Cost 720 797 929 920 885 23.0 (3.8) 4%

as % of sales 10.0 6.6 6.9 6.0 8.4

Other operating expenses 611 1,290 1,396 1,495 1,263 106.5 (15.6) -13%

as % of sales 8.5 10.6 10.4 9.8 12.0

Total Expenditure 6,189 10,219 11,481 12,941 9,254 49.5 (28.5) -10%

EBITDA 1,012 1,913 2,001 2,280 1,250 23.6 (45.2) -19%

Depreciation 79.9 76.6 68.8 71.6 75.7 (5.3) 5.7 14%

EBIT 932 1,836 1,932 2,208 1,175 26.0 (46.8) -21%

Other Income 186 167 199 206 196 5.5 (4.9) 6%

Interest 108 111 106 104 101 (6.6) (3.5) -18%

PBT 1,010 1,891 2,025 2,310 1,270 25.7 (45.0) -18%

Tax 262 475 514 -181 322 23.0 (278.1) -30%

PAT 748 1,417 1,511 2,491 948 26.7 (62.0) -12%

Margins (%) (bps) (bps)

Gross Margin 32.5 33.0 32.1 30.8 32.3 (19) 150

EBIDTA 14.1 15.8 14.8 15.0 11.9 (215) (308)

EBIT 12.9 15.1 14.3 14.5 11.2 (176) (333)

EBT 14.0 15.6 15.0 15.2 12.1 (194) (309)

PAT 10.4 11.7 11.2 16.4 9.0 (137) (734)

Effective Tax rate 25.9 25.1 25.4 (7.8) 25.4 (56) 3,322


Exhibit 3: Segment-wise quarterly financials

Rs mn Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 YoY (%) QoQ (%) 2-year CAGR


Lighting products 1,236 2,815 3,123 3,291 1,661 34.4 (49.5) -22%

Total Sales 7,201 12,132 13,482 15,221 10,505 45.9 (31.0) -12%

PBIT


Lighting products 75 331 383 529 177 137.0 (66.5) 12%

Total PBIT 1,297 2,291 2,429 2,692 1,735 33.7 (35.5) -13%

Finance Costs 108 111 106 104 101 (6.6) (3.5) -18%

Un-allocable expense 179 288 299 278 364 103.1 31.2 14%

as % of sales 2.5 2.4 2.2 1.8 3.5 30%

Exceptional Items 0 0 0 0 0

PBT 1,010 1,891 2,025 2,310 1,270 25.7 (45.0) -18%

PBIT Margins (%) (bps) (bps)

Electrical consumer durables 20.5 21.0 19.8 18.1 17.6 (288) (52) -7%

Lighting products 6.1 11.7 12.3 16.1 10.7 462 (539) 44%

Total PBIT 18.0 18.9 18.0 17.7 16.5 (150) (117) -2%





July 26, 2021 | 3

Other highlights

Consolidated revenue was up 45.9% yoy to Rs10.5bn, growth was driven by both the

segments, with Electrical Consumer Durables witnessing 48% growth yoy and Lighting

seeing 34% growth.

EBITDA was up 24% yoy to Rs1.3bn while EBITDA margin stood at 12% (-215bps yoy).

Despite commodity headwinds, gross margins were down by just 19bps yoy, while

expanding 150bps qoq.

Raw material costs were up 46% yoy, while employee expenses rose 23% yoy. Other

opex increased by 106% yoy.

PAT was up 27% to Rs0.9bn.

The depreciation charge fell 5.3% yoy to Rs75.7mn from Rs79.9mn in Q1FY21.

Other income stood at Rs196mn vs. Rs186mn in Q1FY21.

Interest charges fell 3.5% qoq to Rs101mn.

Electrical Consumer Durables: Revenue was up 48% yoy to Rs8.8bn, with EBIT of

Rs1.6bn (+27% yoy). However, margins contracted 288bps yoy to 17.6%.

Fans posted 63% growth, driven by premium and deco fans. The company continued to

gain market share (1%) in Fans.

The appliance business saw 99% yoy growth, led by air coolers, geysers and mixer

grinders.

The pumps business witnessed 17% yoy growth on strong domestic pump revenues.

Lighting: Revenue stood at Rs1.7bn, up 34% yoy but below estimate. EBIT grew by 137%

yoy and margins expanded 462bps yoy to 10.7%.

B2C Lighting saw value growth of 48%.

The Lighting B2B & B2G business saw slow order pick-up from institutions/Govt.

EBIT margins were down to 11.2%, a contraction of 176bps yoy and 333bps qoq.

EBIT margin contraction was due to higher operating expenses, while gross margins

remained largely unaffected by raw material inflation.

Balance sheet and working capital

Gross debt declined to Rs3.0bn from Rs4.8bn at FY21-end. However, net cash position

saw a sequential deterioration (Rs7bn in Q1FY22 vs. Rs9bn at FY21-end), which we

believe was due to lower earnings and higher working capital requirements.

Working capital: Management stated that it has deliberately stocked up inventory to avoid

supply-side constraints, and has also locked-in some advance contracts. The company

further stated that there are no significant changes to its payable/receivable trends.

Others

E-commerce and modern trade channels delivered 149% growth yoy. Rural revenue

increased 195% yoy.

Sequentially, commodity costs were up 10%, and its impact on gross margins was mitigated

by price increases (5-6% in Q1) and mix improvement in ECD.




July 26, 2021 | 4

Exhibit 4: ECD margins were impacted by higher opex, led by increased investments in channels and R&D


Exhibit 5: Lighting segment margins were impacted qoq by lower revenues


Exhibit 6: Gross margins were flat despite commodity inflation


Exhibit 7: Gross and EBITDA margins are projected to stay stable


Exhibit 8: Net cash position dipped sequentially


Exhibit 9: Changes in estimates

Particulars (Rs mn)

FY22E FY23E FY24E

Old Revised % Change Old Revised % Change Old Revised % Change

Electrical consumer durables 41302 42,876 3.8% 46,624 48,686 4.4% 51,907 54,911 5.8%

Lighting 12118 11,820 -2.5% 13,276 13,273 0.0% 14,869 14,866 0.0%

Revenue 53,420 54,696 2.4% 59,901 61,959 3.4% 66,776 69,777 4.5%

EBITDA 7,422 7,630 2.8% 8,805 8,984 2.0% 9,870 10,187 3.2%

EBITDA Margin % 13.9 14.0 6 bps 14.7 14.5 -20 bps 14.8 14.6 -18 bps

PAT 5998 5,995 -0.1% 6,953 7,083 1.9% 7,891 8,136 3.1%

EPS 9.6 9.6 -0.1% 11.1 11.3 1.9% 12.6 13.0 3.1%


15%

16%

17%

18%

19%

20%

21%

22%

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140001Q

FY

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ECD revenue EBIT%

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(Rs m

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Lighting revenue EBIT%

31% 33% 32% 32% 32% 33% 33% 32% 31% 30%

14% 14%12% 13% 14% 14% 16% 15% 15%

11%

5%

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Gross Margin EBITDA Margin

31% 32% 32% 32% 32% 32%

13% 13%15% 14% 15% 15%

5%

15%

25%

35%

45%

FY19 FY20 FY21 FY22E FY23E FY24E

Gross Margin EBITDA Margin

500

2500

4500

6500

8500

10500

2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22

(Rs m

n)




July 26, 2021 | 5

Exhibit 10: Key assumptions

Revenue (Rs mn) FY19 FY20 FY21 FY22E FY23E FY24E

Electrical consumer durables 32,136 33,890 37,571 42,876 48,686 54,911

% yoy growth 14% 5% 11% 14% 14% 13%

Lighting Products 12,653 11,229 10,464 11,820 13,273 14,866

% yoy growth -1% -11% -7% 13% 12% 12%

Total Revenue 44,789 45,120 48,035 54,696 61,959 69,777

% yoy growth 10% 1% 6% 14% 13% 13%

PBIT (Rs mn) FY19 FY20 FY21 FY22E FY23E FY24E

Electrical consumer durables 6,162 6,731 7,392 8,275 9,664 10,982

% margin 19% 19.9% 19.7% 19% 20% 20%

Lighting Products 1,069 680 1,317 1,427 1,656 1,933

% margin 8% 6.1% 13% 12% 12% 13%

Total PBIT 7,230 7,411 8,710 9,702 11,320 12,915

% margin 16% 16% 18% 18% 18% 19%





July 26, 2021 | 6

Con-call highlights

The North and West regions were the first to recover, and although South and East followed

suit, the South saw recovery only towards June-end due to extended lockdowns. The

revenue contribution from South fell to 30% from 35% on a normalized basis. The delayed

recovery in South and East regions impacted Fan and Pump revenues, respectively.

The products launched in the last 1 year contributed 10% of revenues while the products

launched in the last 3 years contributed 50%.

Overall, Fans’ growth was 63%, with premium and décor fans recording 122% yoy

growth. Volumes of super-premium fans rose 2.6x yoy. New product launches remained

intact even in Q1. Economy products contributed 20-25% of sales in Fans and Pumps

in the quarter.

Lighting: Pricing in B2C has stabilized, and gross margins are on a structural uptrend.

Management reiterated its target to achieve double-digit EBIT margins on a sustainable

basis.

With the company not holding back costs in Q1, the impact on margins was significant.

Outlook: Demand recovery continues in Q2 and is slightly faster and smoother than the

last year. B2G is still significantly impacted vs. the first Covid-19 wave, while B2B is

recovering relatively faster. The company will enter a new product category in H2FY22.

Channel inventory has not seen any significant change as both primary and secondary

sales are seeing similar trends. Channel stocking is also tracking the same rate with no

major anomalies. The company implemented a price hike of 5-6% across products in

April and May, which was accepted by the market as demand recovery in June remained

strong.

The company has been able to track 80% of secondary sales through its ‘Telepatch’

software.

E-commerce and modern trade channels delivered 149% growth yoy. Rural revenues

increased 195% yoy. On the Rural distribution front, the company is looking to expand

in a controlled way and not push sales through the wholesaler model. In E-Commerce,

the target is to have similar market shares across product categories compared to the

offline channel.

Market share: Fans’ market share stood at 26-27% in Q1 vs. 24% two years back, while

that of Residential pumps stood at 27% and Water geysers at 13% (No.3 player now

from No.6-7 player and is on the path to be No. 2). In Air coolers, the company’s market

share was in single-digits though it has doubled in the last couple of years. In Lighting,

the share stood at 10%.

Supply chain: Company has locked-in the supply of selected commodities at lower prices

to reduce the impact of price volatility and ensure timely availability. It had also built

inventory ahead of the lockdown, anticipating supply-chain disruptions.

Sequentially, commodity costs were up 10% and its impact on gross margins was

mitigated by price increases (5-6% in Q1) and mix improvement in ECD.

The focus continues to be on pricing actions, mix improvement and aggressive cost

reduction to mitigate the impact of commodity inflation.

Investments: In 1QFY21, the company had postponed strategic investments, while this

year it continued to invest in ads, R&D, new business development and rural expansion.

Working capital: There was a WC impact due to inventory built-up for fixed products and

the lock-in of advance contracts for selected commodities.

Capex: FY22 capex would be Rs300-500mn.




July 26, 2021 | 7

Valuation charts

Exhibit 11: One-year forward P/E band

Source: Company, Bloomberg, Emkay Research

Exhibit 12: One-year forward P/B band


Exhibit 13: One-year forward EV/EBITDA band


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July 26, 2021 | 8

Key Financials (Consolidated)

Income Statement

Y/E Mar (Rs mn) FY20 FY21 FY22E FY23E FY24E

Revenue 45,203 48,035 54,696 61,959 69,777

Expenditure 39,212 40,830 47,066 52,975 59,589

EBITDA 5,991 7,205 7,630 8,984 10,187

Depreciation 268 297 305 353 401

EBIT 5,723 6,908 7,326 8,632 9,787

Other Income 591 758 1,071 1,220 1,471

Interest expenses 407 429 386 386 386

PBT 5,907 7,236 8,011 9,466 10,872

Tax 943 1,070 2,016 2,383 2,737

Extraordinary Items 0 0 0 0 0

Minority Int./Income from Assoc. 0 0 0 0 0

Reported Net Income 4,964 6,167 5,995 7,083 8,136

Adjusted PAT 4,964 6,167 5,995 7,083 8,136

Balance Sheet


Equity share capital 1,255 1,255 1,255 1,255 1,255

Reserves & surplus 13,429 18,059 20,601 23,918 27,660

Net worth 14,684 19,314 21,857 25,174 28,915

Minority Interest 0 0 0 0 0

Loan Funds 3,497 4,788 4,288 4,288 4,288

Net deferred tax liability (507) (586) (586) (586) (586)

Total Liabilities 17,674 23,517 25,559 28,876 32,618

Net block 9,090 9,150 9,245 9,293 9,292

Investment 5,408 7,697 7,697 7,697 7,697

Current Assets 12,315 18,632 22,256 27,347 33,054

Cash & bank balance 481 6,039 7,946 11,165 14,856

Other Current Assets 0 0 0 0 0

Current liabilities & Provision 9,338 12,071 13,748 15,570 17,534

Net current assets 2,977 6,561 8,508 11,777 15,520

Misc. exp 0 0 0 0 0

Total Assets 17,674 23,517 25,559 28,876 32,618

Cash Flow


PBT (Ex-Other income) (NI+Dep) 5,316 6,479 6,940 8,246 9,401

Other Non-Cash items 0 0 0 0 0

Chg in working cap (1,020) 1,896 (40) (51) (51)

Operating Cashflow 4,109 8,303 5,573 6,551 7,400

Capital expenditure (915) (267) (400) (400) (400)

Free Cash Flow 3,194 8,036 5,173 6,151 7,000

Investments 4 (2,289) 0 0 0

Other Investing Cash Flow 410 (3,159) 0 0 0

Investing Cashflow 89 (4,957) 671 820 1,071

Equity Capital Raised 1 1 0 0 0

Loans Taken / (Repaid) (2,995) 1,291 (500) 0 0

Dividend paid (incl tax) (1,332) (3,452) (3,452) (3,766) (4,394)

Other Financing Cash Flow 1,017 5,284 6,039 7,946 11,165

Financing Cashflow (3,717) 2,694 1,701 3,794 6,385

Net chg in cash 481 6,039 7,946 11,165 14,856

Opening cash position 1,431 481 6,039 7,946 11,165

Closing cash position 481 6,039 7,946 11,165 14,856





July 26, 2021 | 9

Key Ratios

Profitability (%) FY20 FY21 FY22E FY23E FY24E

EBITDA Margin 13.3 15.0 14.0 14.5 14.6

EBIT Margin 12.7 14.4 13.4 13.9 14.0

Effective Tax Rate 16.0 14.8 25.2 25.2 25.2

Net Margin 11.0 12.8 11.0 11.4 11.7

ROCE 36.6 37.2 34.2 36.2 36.6

ROE 38.7 36.3 29.1 30.1 30.1

RoIC 53.0 65.0 75.2 87.6 98.6

Per Share Data (Rs) FY20 FY21 FY22E FY23E FY24E

EPS 7.9 9.8 9.6 11.3 13.0

CEPS 8.3 10.3 10.0 11.8 13.6

BVPS 23.4 30.8 34.8 40.1 46.1

DPS 2.1 5.5 5.5 6.0 7.0

Valuations (x) FY20 FY21 FY22E FY23E FY24E

PER 59.2 47.7 49.1 41.5 36.1

P/CEPS 55.0 44.6 45.7 38.7 33.7

P/BV 20.0 15.2 13.5 11.7 10.2

EV / Sales 6.4 5.9 5.2 4.5 4.0

EV / EBITDA 48.7 39.6 37.0 31.1 27.1

Dividend Yield (%) 0.5 1.2 1.2 1.3 1.5

Gearing Ratio (x) FY20 FY21 FY22E FY23E FY24E

Net Debt/ Equity (0.2) (0.5) (0.5) (0.6) (0.6)

Net Debt/EBIDTA (0.4) (1.2) (1.5) (1.6) (1.8)

Working Cap Cycle (days) 20.2 4.0 3.7 3.6 3.5

Growth (%) FY20 FY21 FY22E FY23E FY24E

Revenue 0.9 6.3 13.9 13.3 12.6

EBITDA 2.5 20.3 5.9 17.7 13.4

EBIT 0.2 20.7 6.0 17.8 13.4

PAT 23.7 24.2 (2.8) 18.2 14.9

Quarterly (Rs mn) Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22

Revenue 7,201 12,132 13,482 15,221 10,505

EBITDA 1,012 1,913 2,001 2,280 1,250

EBITDA Margin (%) 14.1 15.8 14.8 15.0 11.9

PAT 748 1,417 1,511 2,491 948

EPS (Rs) 1.2 2.3 2.4 4.0 1.5


Shareholding Pattern (%) Jun-20 Sep-20 Dec-20 Mar-21 Jun-21

Promoters 26.2 26.2 17.4 11.4 6.0

FIIs 29.9 30.3 34.3 39.2 40.2

DIIs 25.7 26.0 37.6 38.7 43.7

Public and Others 18.2 17.5 10.7 10.8 10.2

Source: Capitaline




July 26, 2021| 10

RECOMMENDATION HISTORY TABLE

Date Closing

Price TP

Period (months)

Rating Analyst

24-May-21 398 480 12m Buy Naval Seth

25-Jan-21 412 490 12m Buy Naval Seth

23-Oct-20 305 340 12m Buy Naval Seth

28-Jul-20 252 271 12m Buy Naval Seth


07-Apr-20 210 260 12m Buy Naval Seth


16-Mar-20 230 314 12m Buy Naval Seth


19-Nov-19 265 283 12m Buy Naval Seth

24-Oct-19 255 283 12m Buy Naval Seth

23-Sep-19 268 289 12m Buy Naval Seth

11-Sep-19 232 256 12m Buy Naval Seth

25-Jul-19 225 256 12m Buy Naval Seth

13-Jun-19 234 256 12m Buy Naval Seth









RECOMMENDATION HISTORY CHART

Source: Bloomberg, Company, Emkay Research

180

244

308

372

436

500

28

-Ju

l-1

8

26

-Ja

n-1

9

27

-Ju

l-1

9

25

-Ja

n-2

0

25

-Ju

l-2

0

23

-Ja

n-2

1

24

-Ju

l-2

1

BUY Hold SellAccumulate Reduce PriceTarget Price




July 26, 2021| 11

Emkay Alpha Portfolio – Consumer Durables

EAP sector portfolio

Company Name BSE200 Weight

EAP Weight

OW/UW (%)

OW/UW (bps)

EAP Weight (Normalised)

Consumer Durables 0.93 0.93 0% 0 100.00

Amber Enterprises 0.00 0.00 NA 0 0.00

Blue Star 0.00 0.00 NA 0 0.00

Crompton Greaves CE 0.23 0.24 3% 1 26.06

Dixon Technologies 0.00 0.01 NA 1 1.14

Havells India 0.31 0.31 0% 0 34.00

KEI Industries 0.00 0.00 NA 0 0.00

Polycab India 0.04 0.04 4% 0 4.20

V-Guard Industries 0.00 0.00 NA 0 0.00

Voltas 0.26 0.26 -2% -1 27.80

Whirlpool Of India 0.08 0.06 -18% -1 6.80

Cash 0.00 0.00 NA 0 0.01

Source: Emkay Research

* Not under coverage: Equal Weight

High Conviction/Strong Over Weight High Conviction/Strong Under Weight

Sector portfolio NAV

Base Latest

1-Apr-19 24-Jul-20 22-Jan-21 23-Apr-21 22-Jun-21 23-Jul-21

EAP - Consumer Durables 100.0 100.9 167.2 152.4 162.4 175.2

BSE200 Neutral Weighted Portfolio (ETF) 100.0 93.7 153.5 139.3 149.8 161.7

*Performance measurement base date 1st April 2019


Price Performance (%)

1m 3m 6m 12m

EAP - Consumer Durables 7.9% 15.0% 4.7% 73.5%

BSE200 Neutral Weighted Portfolio (ETF) 7.9% 16.1% 5.3% 72.6%


NAV chart


Please see our model portfolio (Emkay Alpha Portfolio): Nifty

Please see our model portfolio (Emkay Alpha Portfolio): SMID

“Emkay Alpha Portfolio – SMID and Nifty are a supporting document to the Emkay Alpha

Portfolios Report and is updated on regular intervals”

70

92

114

136

158

180

Apr-19 Jul-19 Oct-19 Feb-20 May-20 Sep-20 Dec-20 Apr-21 Jul-21

NAV

EAP - Consumer Durables BSE200 Neutral Weighted Portfolio (ETF)

Analyst: Naval Seth

Contact Details

[email protected]

+91 22 66242414

Sector

Consumer Durables, Media &

Entertainment, SMID and Telecom

Analyst bio

Naval holds an MBA in Finance and has

more than 13 years of experience in

equity research. His team currently

covers 19 stocks spread across three

different sectors.


https://web3.emkayglobal.com/ResearchAccess/Upload/Nifty_Jul21.pdf

https://web3.emkayglobal.com/ResearchAccess/Upload/SMID_Jul21.pdf

https://web3.emkayglobal.com/ResearchAccess/Upload/SMID_Jul21.pdf

mailto:[email protected]



July 26, 2021| 12

Emkay Rating Distribution

Ratings Expected Return within the next 12-18 months.

BUY Over 15%

HOLD Between -5% to 15%

SELL Below -5%

Completed Date: 26 Jul 2021 23:58:58 (SGT) Dissemination Date: 26 Jul 2021 23:59:58 (SGT)

Sources for all charts and tables are Emkay Research unless otherwise specified.

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July 26, 2021| 13

ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL) The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible of the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer, director or employee of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant). The research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. EGFSL has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the EGFSL and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of EGFSL compensation to any specific investment banking function of the EGFSL. 1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interest that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at the arm’s length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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July 26, 2021| 14

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crompton greaves ce26jul21...crompton greaves ce (lhs) rel to nifty (rhs) below expectations:...

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