CG Consumer Electricals: Recovery in margins is keeping analysts hopeful

Lighting margins seen recovering; consumer durables remain strong

The Crompton Greaves (CG) Consumer Electricals stock is up 8 per cent after touching its 52-week low after results last month. While the Street’s disappointment — which led the stock down — was due to decline in lighting segment’s profit that impacted Crompton’s September quarter (Q2) performance, the expected recovery in its margins and the strong outlook for consumer durables business is keeping analysts hopeful.

The lighting segment (about a third of sales) saw profits fall by half, on a 4 per cent growth in revenues. This was the second consecutive quarter of decline in its profits. Rising competition in