Crompton Greaves - March 2013 Results Preview - Motilal Oswal

- We expect savings from restructuring of Belgium operations to start flowing from 4QFY13E. During 3QFY13, Crompton Greaves had guided for a savings of Euro 3.7m in 4QFY13.

- We expect increased rejection rates in Belgium would have a negative impact on margins, while EBITDA margin would continue to face rampup challenges in Hungary. De-tanking rate of 22.5% in 3QFY13 is expected to decline to ~10% by March 2013.

- Domestic power segment is likely to show robust power order intake, driven by pick-up in ordering from SEBs. Sustainability of the growth trend in consumer segment would be watched as Boston Consulting Group has been hired to suggest the rejuvenation plan.

- In the industry segment, drives factory in Manideep is likely to be inaugurated in March 2013. Any pick-up in ordering from key sectors like cement/railways would be closely watched. Exports should also see a ramp-up driven by weakening INR.

Source : Equity Bulls

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