Crompton Greaves - Q1FY14 Results - Nirmal Bang Institutional

- Crompton Greaves (CGL) posted consolidated revenue of Rs31.6bn for 1QFY14, up 12.3% YoY, and 4.6%/2.7% above our/Bloomberg consensus estimates, respectively.

- Top-line was driven by healthy growth in the international power systems segment and the consumer products segment. EBITDA fell 13.2% YoY at Rs1.4bn, on expected lines, following losses in the international power systems business.

- As expected, the recovery in operating margin started with a 230bps QoQ expansion at 4.6% for the quarter, in line with our estimate of 4.5%. Aided by higher other income, up 84% YoY owing to treasury gains, the company reported PAT of Rs601mn, 13.8% above our estimate.

- While CGL continued to offer healthy revenue visibility driven by strong order book, up 6.5% YoY at Rs97.7bn, turnaround of its international power systems segment will be key valuation driver, in our view.

- We have retained our Buy rating on the stock with a target price of Rs105 based on 12xFY15E EPS.

Source : Equity Bulls

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