CLSA maintains 'Outperform' rating on Crompton Greaves
Crompton's Q4 adjusted net profit at Rs 270 crore, up 39% Y-o-Y, is significantly higher than the estimates.
By ET Bureau |
RESEARCH: CLSA
RATING: OUTPERFORM
CMP: Rs 228
CLSA maintains `Outperform' rating on Crompton Greaves. Crompton's Q4 adjusted net profit at Rs 270 crore, up 39% Y-o-Y, is significantly higher than the estimates. The revenue growth at 2% was however below the estimates.
Crompton has made two acquisitions in the last two months, which would complement its existing business. Domestic business continues to do well. Crompton's Q4 standalone revenue registered a growth of 19% Y-o-Y which was in-line with the expectations.
The rupee's appreciation against the Euro would have also amplified the decline in revenues. Crompton has made two acquisitions over the last two months: Power Technology Solutions (March) and three small businesses of Nelco on a slump sale basis. Both these acquisitions are aimed at improving its automation and services offering.
Crompton continues to be the best performing stock in India's power T&D (transmission and distribution) space. It still trades at a 40-45 % discount to its competitors, ABB and Areva, on FY12 PE basis. With its superior operating performance and improved product and services offering, CLSA expects the valuation gap to narrow.
RATING: OUTPERFORM
CMP: Rs 228
CLSA maintains `Outperform' rating on Crompton Greaves. Crompton's Q4 adjusted net profit at Rs 270 crore, up 39% Y-o-Y, is significantly higher than the estimates. The revenue growth at 2% was however below the estimates.
Crompton has made two acquisitions in the last two months, which would complement its existing business. Domestic business continues to do well. Crompton's Q4 standalone revenue registered a growth of 19% Y-o-Y which was in-line with the expectations.
The rupee's appreciation against the Euro would have also amplified the decline in revenues. Crompton has made two acquisitions over the last two months: Power Technology Solutions (March) and three small businesses of Nelco on a slump sale basis. Both these acquisitions are aimed at improving its automation and services offering.
Crompton continues to be the best performing stock in India's power T&D (transmission and distribution) space. It still trades at a 40-45 % discount to its competitors, ABB and Areva, on FY12 PE basis. With its superior operating performance and improved product and services offering, CLSA expects the valuation gap to narrow.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
Related Articles
Vedanta Aluminium shares rise nearly 2% as CLSA initiates Outperform call, sees 18% upside potential. Here's whyADVERTISEMENT
