Expect Crompton Greaves to hit Rs 235: Mayuresh Joshi

According to Mayuresh Joshi, Vice President - Institution at Angel Broking, Crompton Greaves may hit Rs 235 over the next twelve months.

Mayuresh Joshi, Vice President - Institution at Angel Broking told CNBC-TV18, "I think the de-merger business will be a huge positive for Crompton Greaves . If you look at the kind of consumer business numbers that have thrown up from Crompton over the past two years, they have been extremely positive. If you take the fan segment, if you take the lighting segment and the residential pump segment, they are the market leaders in all these segments."

"Clearly if you look at the expected numbers to come from Crompton Greaves, our take is that a 10 percent increase in topline to around Rs 3,550 crore, the bottomline should show substantial amount of improvement and that is based on the fact that a lot of the restructuring exercise that Crompton Greaves is probably doing more or less on its overseas operations, which accounts for more than 50 percent of its revenues, will start bearing fruits. If you take into account the Hungarian operations, the Canadian operations and the US operations, all of them should start bearing fruits over the next couple of years," he said.

"So in that sense itself, our take is that Crompton should trade at higher multiples going forward as well and again clearly the return ratio profile or the trajectory should greatly improve for the company hereon. So good numbers are expected for this quarter and again restructuring exercise will ensure that the margin growth and the earnings profile remains stuck in for Crompton Greaves. We have stuck to our target price of Rs 235 for Crompton over the next 12 months."

Disclosure: Analyst does not have any personal holdings in the stock but might have discussed the stock with his clients.

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