Neutral on Crompton Greaves Ltd - Motilal Oswal

Crompton Greaves (CRG IN; Mkt Cap USD3.9b, CMP Rs279, Neutral)

Crompton Greaves Ltd (CGL) reported 3QFY11 standalone revenue of Rs14b (up 14% YoY), PAT was Rs1.76b up 30% YoY and EBITDA margins of 16.3%.

For CG Global (comprising Pauwels, Ganz and Microsol), 3QFY11 revenue was Rs10b (down 2% YoY), EBITDA was Rs2.2b (down 4% YoY).

The consumer division (33% of revenue and 27% of EBIT) of CGL was a key driver in 3QFY11, posting revenue of Rs4.8b (up 30% YoY).

Consolidated order backlog in 3QFY11 was Rs70b with a BTB ratio of 0.7x TTM revenue. Consolidated order-book grew by 15% YoY.

Maintain Neutral with a target price of Rs322 (Rs329 earlier) (18x FY12E EPS) and Rs10/share attributed to CGL's investment in Avantha Power.

Source : Equity Bulls

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