Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Crompton: No pep in numbers - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 10, 2002

    Crompton: No pep in numbers

    Crompton Greaves tryst with restructuring continues. FY02 was a momentous year for the company, as it turned back into the black. The first quarter of FY03 is a continuation of that trend. Crompton recorded 6% topline growth YoY and finished the quarter with a Rs 6 m profit, as compared to Rs 57 m loss reported in 1QFY02.

    (Rs m) 1QFY02 1QFY03 Change
    Net Sales 3,480 3,688 6.0%
    Other Income 6 21 250.0%
    Expenditure 3,236 3,405 5.2%
    Operating Profit (EBDIT) 244 283 16.2%
    Operating Profit Margin (%) 7.0% 7.7%  
    Interest 190 184 -2.8%
    Depreciation 117 114 -2.5%
    Profit before Tax -57 6 -110.6%
    Tax 0 0 -
    Profit after Tax/(Loss) -57 6 -
    Net profit margin (%) -1.6% 0.2%  
    No. of Shares 52.4 52.4  
    Diluted Earnings per share* -4.3 0.5  
    P/E Ratio   113.5  

    The company's operating margins improved by 70 basis points. However, the continuing high interest outgo and depreciation provisioning took a toll on profits. Had it not been for a higher other income, Crompton would surely have finished the quarter in the red. The reason for higher other income is not been given in the press release of the company.

    The company's stock price had shot up in anticipation of a much improved performance to 52 week high at Rs 60 levels recently. However, even after all the restructuring and change of management (the company now forms part of the BM Thapar Group), the 1QFY03 performance (though better than last year) is not really eye catching. Thus the counter retraced its steps on the bourses yesterday.

    Cost break-up
    (Rs m) 1QFY02 1QFY03 Change
    Material costs 2,348 2,522 7.4%
    Staff costs 424 413 -2.7%
    Other expenditure 464 470 1.3%
    Total expenditure 3,236 3,405 5.2%

    One positive for the company in near future is the news that Crompton divested its shareholding comprising 760,000 equity shares in CG Newage Electrical Ltd. at a price of Rs 220.50 per share a few days back. The consideration (Rs 168 m) will be accounted for in the September quarter. Thus the next quarter should see a much better bottomline growth.

    However, all said and done, Crompton Greaves operational performance leaves much to be desired. The company would also have to clear income tax, excise and sales tax demands aggregating to Rs 277 m relating to FY02 some time in future, which would dampen its recovery in FY03.



    Equitymaster requests your view! Post a comment on "Crompton: No pep in numbers". Click here!


    More Views on News

    BHEL: Margins Dip into the Negative (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The company also saw order inflows of Rs 18 billion during the quarter, which was a massive 41% YoY lower than the previous year's quarter.

    Cummins Ltd: Domestic Revenues the Saving Grace (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The domestic economy continues to grow largely in areas which are positively impacted through continuing government investments in infrastructure.

    ABB: Large Orders Remain Muted (Quarterly Results Update - Detailed)

    Aug 2, 2017

    Decisions on government initiatives and private investments were stalled in anticipation of upcoming tax restructure.

    L&T: Amidst a Challenging Business Environment (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Bank credit to industry remained muted and investment momentum was driven mostly by public sector spending.

    L&T: Private Sector Capex Remains in a Tizzy (Quarterly Results Update - Detailed)

    Jul 24, 2017

    Vast majority of private players remain more concerned with debt payback rather than starting new projects.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 16, 2017 (Close)


    • Track your investment in CG POWER & INDUSTRIAL SOLUTIONS LTD with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks



    Compare Company With Charts