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Crompton Greaves is trading near its 52-week low. The stock has touched 52-week high of Rs 349 and low of Rs 132 on NSE. The company has been performing well over the past several years, but the margins are under pressure and the same has been reflected in the price of the stock.
The company was not able to post impressive results during the past quarter. The P/E multiple has been on the higher side compared to the industry average.
The stock has been sliding over the past several weeks. The company stock has declined to Rs 150 level compared to closing price of Rs 278 on April 4.
Market analysts are also skeptical about the performance of the management team. The company purchased a plane recently, while the travel expenses were Rs 31 crore. The depreciation in the value of plane does not justify the decision.
The overseas operations of the company have not been consistent in performance.
Compared to peers USHA and Bajaj Electrical, CG has always enjoyed better margins. Technical experts are not sure that the company will be able to manage the same in near future.
Motilal Oswal has given a neutral rating to the stock in its July report. Angel Broking has given a neutral outlook for the company in its July research report. Kunal Saraogi of Equityrush has given a hold call for the stock.