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Crompton Greaves
Crompton Greaves (CG) announced its 2QFY2012 results, which were below
street expectations but in-line with our expectations. Top line grew by 12.8%
yoy to `2,706cr (`2,398cr), which was 6.4% higher than our expectation of
`2,542cr. Growth was largely driven by the industrial segment, which posted
handsome 29.1% yoy growth to `465.5cr (`360.6cr). The power system
segment delivered a decent performance (11.6% yoy growth to `1,761cr)
mainly on account of robust revenue growth on the international front (24.8%
yoy to `1,162cr), which covered up the poor performance on the domestic
front (down by 7.0% yoy to `598.8cr). The consumer segment posted muted
growth of 3.6% yoy to `480.1cr (`463.4cr), which was on expected lines due
to a consistent increase in interest rates and inflationary pressures.
EBITDA margin witnessed a steep contraction of ~560bp yoy to 8.4%, which
was in-line with our estimates of 9.0%, primarily driven by high raw-material
costs, which rose by 630bp yoy as a proportion to sales. Margin erosion was
mainly attributable to the power system segment (both domestic and
international segments), which has been facing increased cost and pricing
pressures. The same was the picture with the industrial and consumer
segments, as these segments also reeled under margin pressure. Reported PAT
declined sharply by 45.4% to `116.7cr, 20% below street expectations
(`144.0cr) and in-line with our expectations (`115.8cr).
At the CMP of `144, the stock is trading at 14.6x and 9.4x its FY2012E and
FY2013E EPS, respectively. Currently, the stock is under review. We will revise
our estimates and recommendation post the conference call.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Crompton Greaves
Crompton Greaves (CG) announced its 2QFY2012 results, which were below
street expectations but in-line with our expectations. Top line grew by 12.8%
yoy to `2,706cr (`2,398cr), which was 6.4% higher than our expectation of
`2,542cr. Growth was largely driven by the industrial segment, which posted
handsome 29.1% yoy growth to `465.5cr (`360.6cr). The power system
segment delivered a decent performance (11.6% yoy growth to `1,761cr)
mainly on account of robust revenue growth on the international front (24.8%
yoy to `1,162cr), which covered up the poor performance on the domestic
front (down by 7.0% yoy to `598.8cr). The consumer segment posted muted
growth of 3.6% yoy to `480.1cr (`463.4cr), which was on expected lines due
to a consistent increase in interest rates and inflationary pressures.
EBITDA margin witnessed a steep contraction of ~560bp yoy to 8.4%, which
was in-line with our estimates of 9.0%, primarily driven by high raw-material
costs, which rose by 630bp yoy as a proportion to sales. Margin erosion was
mainly attributable to the power system segment (both domestic and
international segments), which has been facing increased cost and pricing
pressures. The same was the picture with the industrial and consumer
segments, as these segments also reeled under margin pressure. Reported PAT
declined sharply by 45.4% to `116.7cr, 20% below street expectations
(`144.0cr) and in-line with our expectations (`115.8cr).
At the CMP of `144, the stock is trading at 14.6x and 9.4x its FY2012E and
FY2013E EPS, respectively. Currently, the stock is under review. We will revise
our estimates and recommendation post the conference call.
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