Analysist of Crompton greaves company http://www.scribd.

com/doc/35342743/Crompton-Greaves-Limited

Motilal oswal ( business standard ) cropmton greaves 2011 http://www.business-standard.com/content/research_pdf/crg_030511_01.pdf Crompton greaves annual report 2011 http://www.cgglobal.com/pdfs/annual-report/ar1011/Pg12-35.pdf indiabulls ( cg ) annual report 2009 http://smartinvestor.in/BSCMS/PDF/tu954%20crompton%20greaves%20limited%20090701.pdf

Crompton Greaves Cluster: Apple Green Recommendation: Hold Price target: Rs327 Current market price: Rs262 Q3FY2011 results: First-cut analysis Result highlights Q3FY2011 results, subsidiaries drag down consolidated performance: Crompton Greaves Ltd (CGL)?s Q3FY2011 performance was a mixed bag. On the one hand, the consolidated revenue growth was less than expected mainly due to sluggish sales in its subsidiaries. On the other hand, the lower tax rate boosted the company?s overall earnings which were better than expected. Stand-alone revenues grew by 14.3%: On a stand-alone basis, the company registered revenues worth Rs1,398.6 crore, indicating a growth of 14.3% year on year (YoY) which was higher than our expectation of a 12.5% growth. The growth in the revenues was led by a robust 30.3% growth in the consumer products segment. The industrial system segment also recorded a healthy growth of 20.1% YoY. The power segment continued to be a laggard with a year-on-year (Y-o-Y) growth of a meagre 2.1%. Stand-alone OPM at 16.3%: The operating profit margin (OPM) of the company declined marginally by 33 basis points to 16.3% mainly led by an increase in the raw material cost. A higher other income and a lower tax rate helped the company to post a 30% Y-o-Y growth in its net profit to Rs176 crore (which was higher than our estimate of Rs144.8 crore).

Consolidated revenues marred by a fall in subsidiaries? revenues: On a consolidated basis, the company reported a 6.7% Y-o-Y growth in its revenues to Rs2,397 crore, which was marginally below our estimate. The performance was disappointing mainly due to a fall of 2.4% YoY in the revenues posted by its subsidiaries. We feel that the revenues of its subsidiaries could have fallen on account of the depreciation of the euro against the rupee.

Stable consolidated OPM at 14.2%: The consolidated OPM was 14.2%, the same as in Q3FY2010. Boosted by a lower rate (23.3%), the net profit was up 17% at Rs231.3 crore against our expectation of Rs216.9 crore.

We will be back with a detailed note on CGL?s Q3FY2011 results after a conference call with the company?s management and after reviewing our estimates and price target for the company. Currently, we have a Hold rating on the CGL stock.

Key things to watch in management commentary: The order backlog and the order inflow; and the reasons for the lower tax rate, the fall in the revenues of the subsidiaries and the continued underperformance of the stand-alone power business.