Company Update - Crompton Greaves Consumer - ICICI Direct

CGCEL acquired a majority stake in Butterfly Gandhimathi Appliance (Butterfly) for a consideration of ~Rs. 2077 crore. The transaction includes 55% stake and trademark license from Butterfly's promoters at Rs. 1410 crore (implied market cap of Rs. 2564 crore for Butterfly). CGCEL will also launch open offer for acquiring 26% stake from public for a consideration of ~Rs. 667 crore (~ Rs. 1434/share). CGCEL will finance this acquisition through mix of debt and internal accruals (CGCEL had net cash of Rs. 1083 crore as on December 2021). With the offer price, Butterfly is valued at 2.9x FY21 sales and 71x FY21 earnings.

Key triggers for future price performance

• Total ~1.7 crore new houses under PMAY, replacement of ~20 million water pumps under government's flagship scheme KUSUM, urbanisation and rising aspiration are demand boosters of home appliances
• Dealer addition in areas with population 10,000-100,000 in next five years
• Expanding Butterfly products pan India leveraging existing dealer networks

For details, click on the link below: Link to the report

Shares of Crompton Greaves Consumer Electricals Limited was last trading in BSE at Rs. 408.40 as compared to the previous close of Rs. 378.60. The total number of shares traded during the day was 213972 in over 5787 trades.

The stock hit an intraday high of Rs. 410.40 and intraday low of 377.20. The net turnover during the day was Rs. 85594740.00.

Source : Equity Bulls

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CromptonGreavesConsumerElectricals INE299U01018 ICICIDirect CompanyUpdate