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Crompton Greaves - RU4QFY2011-02-05-11

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					                                                                                          4QFY2011 Result Update | Capital Goods
                                                                                                                                May 2, 2011



 Crompton Greaves                                                                            BUY
                                                                                             CMP                                        `250
 Performance Highlights                                                                      Target Price                               `300
(` cr)                  4QFY11       4QFY10        % chg (yoy)    3QFY11    % chg (qoq)      Investment Period                  12 Months
Revenue                    2,908        2,508            16.0       2,397         21.3
                                                                                             Stock Info
EBITDA                       373          403            (7.3)       340           9.7
                                                                                             Sector                             Capital Goods
EBITDA margin (%)           12.8         16.1         (323)bp        14.2      (136)bp
                                                                                             Market Cap (` cr)                           16,034
Adj. PAT                     251          307           (18.0)       233           8.0
Source: Company, Angel Research                                                              Beta                                           0.7
                                                                                             52 Week High / Low                         349/219
For 4QFY2011, Crompton Greaves (CG) reported lower-than-expected numbers.                    Avg. Daily Volume                    1,325,935
On a consolidated basis, the company posted decent revenue growth of 16% yoy                 Face Value (`)                                 2.0
to `2,908cr (`2,508cr), which was slightly higher than our estimate of `2,771cr.
                                                                                             BSE Sensex                                  18,998
With decent valuation and strong long-term prospects, we maintain our Buy
                                                                                             Nifty                                        5,701
recommendation with a revised target price of `300 (`330).
                                                                                             Reuters Code                          CROM.BO
Margin erosion plays a spoilsport: For 4QFY2011, CG posted 16% yoy growth in                 Bloomberg Code                            CRG@IN
its consolidated revenue, mainly driven by the industrial and consumer segments,
which grew by 25% and 19.6%, respectively (rupee terms). The margin eroded
sharply by 323bp yoy to 12.8%, higher than our expectations of 191bp, which                  Shareholding Pattern (%)
resulted into a 7.3% yoy decline in EBITDA to `373cr (`403cr).                               Promoters                                    40.9
                                                                                             MF / Banks / Indian Fls                      28.1
Outlook and valuation: Order inflows from PGCIL have been relatively low during
                                                                                             FII / NRIs / OCBs                            23.5
FY2011. Further, concern prevails over margin pressures arising on account of
                                                                                             Indian Public / Others                        7.4
higher commodity prices and increased competition going forward. However,
industry commentary indicates that ordering activity from PGCIL is likely to gather
pace after 1HFY2012, which will benefit CG in terms of order intakes. Despite                Abs. (%)                    3m       1yr       3yr
margin compression, pricing pressures and heightened competition, we believe
                                                                                             Sensex                     5.0      8.2       7.9
higher growth in international subsidiaries coupled with margin improvements                 Crompton
can offset the prevailing softness in the domestic power T&D segment. The stock                                         (7.9)   (5.1)     71.7
                                                                                             Greaves
quotes at 16.4x and 13.4x FY2012E and FY2013E EPS, respectively. We maintain
our Buy recommendation on the stock with a revised price target of `300 (`330).


Key financials (Consolidated)
  Y/E March (` cr)                      FY2010        FY2011      FY2012E    FY2013E
  Net sales                               9,141       10,005       11,029     12,867
  % chg                                      4.6          9.5        10.2        16.7
  Adj. PAT                                  860          889         980       1,198
  % chg                                    53.6           3.3        10.2        22.2
  EBITDA (%)                               14.0          13.4        13.4        13.9
  EPS (`)                                  13.4          13.9        15.3        18.7
  P/E (x)                                  18.6          18.0        16.4        13.4
  P/BV (x)                                   6.4          4.9         4.0         3.2
  RoE (%)                                  46.3          32.4        26.8        26.3
  RoCE (%)                                 43.7          34.3        30.4        31.1
                                                                                              Hemang Thaker
  EV/Sales (x)                               1.7          1.6         1.4         1.1
                                                                                              +91 22 3937 7800 Ext: 6840
  EV/EBITDA (x)                            12.2          11.8        10.1         8.1         hemang.thaker@angelbroking.com
Source: Company, Angel Research



Please refer to important disclosures at the end of this report                                                                              1
                                                                                 Crompton Greaves | 4QFY2011 Result Update



Exhibit 1: Quarterly performance
(` cr)                                    4QFY11       4QFY10 % chg (yoy)      3QFY11 % chg (qoq)           FY11          FY10 % chg (yoy)
Net Sales                                  2,908             2,508     16.0          2,397      21.3      10,005          9,141        9.5
Other operating income                         0                0          -            0             -     0.00           0.00          -
Total income                               2,908             2,508     16.0          2,397      21.3      10,005          9,141        9.5
Stock adjustments                             15              102                      42                 (95.57)         22.47
Raw Material                               1,495             1,199     24.7          1,198      24.8      5,174           4,624      11.9
(% of total income)                         51.4              47.8                    50.0                  51.7           50.6
Employee Cost                                272              262       3.7           301       (9.5)     1,181           1,113        6.1
(% of total income)                          9.4              10.5                    12.5                  11.8           12.2
Other Expenses                               366              265      38.1           267       37.2       1,211          1,158        4.6
(% of total income)                         12.6              10.6                    11.1                  12.1           12.7
Total Expenditure                          2,535             2,105     20.4          2,057      23.2       8,661          7,864      10.1
EBITDA                                       373              403      (7.3)          340         9.7      1,344          1,277        5.2
(EBITDA %)                                  12.8              16.1                    14.2                 13.43           14.0
Interest                                       7               12     (39.4)            4       87.5          21            26      (21.0)
Depreciation                                  60               40      50.3            47       27.9         194           155       24.9
Other Income                                  47               33      42.1            12      289.0         100            94         6.7
PBT                                          353              384      (8.1)          302       17.0       1,229          1,189        3.4
(% of total income)                         12.1              15.3                    12.6                  12.3           13.0
Total Tax                                     68              114     (40.0)           70       (2.9)        310           365      (15.1)
(% of PBT)                                  19.4              29.6                    23.3                  25.2           30.7
PAT (Before minority int. and Asso.)         285              270       5.4          231.3      23.1         919           824       11.5
Extra ordinary item                           38              (35)   (208.3)           0.0            -       38           (35)        0.0
Adj PAT (After Minority Int. and Asso.)      251              307     (18.0)          233         8.0        889           860         3.3
(% of total income)                          9.8              10.8                     9.7                   8.9            9.4
Source: Company, Angel Research


                                                   Exhibit 2: Actual vs. estimates
                                                    (` cr)                                   Actual          Estimates             Var. (%)
                                                   Revenue                                   2,908              2,771                  4.9
                                                   EBITDA                                      373                  392               (4.8)
                                                   PAT                                         251                  245                2.4
                                                   EPS (`)                                     3.9                  3.8                2.4
                                                   Source: Company, Angel Research

                                                   High material costs dent margins: CG’s profitability was impacted by high
                                                   raw-material costs during the quarter. Raw-material cost as a percentage of
                                                   revenue rose by 360bp yoy to 51.4%, which negatively affected the company’s
                                                   margin. Other expenses during the quarter rose by 38.1% yoy, resulting in a
                                                   323bp yoy contraction in margin to 12.8%, higher than our expectations of a
                                                   191bp dip. Consequently, PAT declined by 18% yoy `251cr (`307cr). PAT was
                                                   broadly in line with our estimate of `245cr. Notably, PAT was largely aided by
                                                   lower tax rates for the current quarter (19.4% in 4QFY2011 as compared to 29.6%
                                                   in 4QFY2010). Lower tax rates were a result of investments in R&D, which are
                                                   entitled to tax rebates.

                                                   For FY2011, the company delivered revenue and PAT growth of 9.5% and 3.3% to
                                                   `10,005cr and `889cr, respectively.


May 2, 2011                                                                                                                               2
                                            Crompton Greaves | 4QFY2011 Result Update



              Exhibit 3: Segment-wise performance (Standalone)
              Y/E March (` cr)           4QFY11 4QFY10         % chg (yoy)   FY11   FY10   % chg (yoy)
              Revenue
              Power Systems                     819     829          (1.1) 2,554 2,510            1.8
              Consumer Products                 551     460          19.6 2,021 1,612            25.4
              Industrial Systems                402     337          19.2 1,407 1,174            19.8
              Others                             2.7     5.5        (51.2)     17    25         (31.5)
              Total                        1,774       1,631          8.8 5,999 5,322            12.7
              EBIT
              Power Systems                     148     161          (8.2)    460   462          (0.4)
              Consumer Products                  79      67          17.5     293   230          27.4
              Industrial Systems                 64      78         (17.7)    263   260           1.0
              Others                             0.7     0.3        132.3     3.0    1.0        192.1
              Total                             292     307          (4.9)   1019   953           6.9
              Revenue mix (%)
              Power Systems                     46.2    50.8                 42.6   47.2
              Consumer Products                 31.0    28.2                 33.7   30.3
              Industrial Systems                22.6    20.6                 23.4   22.1
              Others                             0.2     0.3                  0.3    0.5
              EBIT Margin (%)
              Power Systems                     18.1    19.5                 18.0   18.4
              Consumer Products                 14.3    14.6                 14.5   14.3
              Industrial Systems                16.0    23.2                 18.7   22.1
              Others                            26.8     5.6                 17.3    4.0
              Total                             16.4    18.8                 17.0   17.9
              Source: Company, Angel Research

              Sluggish growth in power systems: The power systems segment underperformed,
              reporting a 1.1% yoy decline in revenue amid weak offtake from customers and a
              slowdown in PGCIL’s ordering. The segment also witnessed a margin dip of 140bp
              yoy on the back of increased competition and pricing pressures. Management has
              guided muted activity in the T&D segment till 1HFY2012, which may further strain
              the power systems segment on account of expected drying up of order inflows from
              the T&D segment.

              Industrial systems and consumer segment driving growth – margins erode: Growth
              in the domestic business was mainly driven by the consumer products and
              industrial segments, which posted decent growth of 19.6% and 19.2% yoy,
              respectively. However, growth was offset by high raw-material costs, which eroded
              the company’s margin, especially the industrial systems segment where the margin
              slashed by 720bp yoy to 16%. On a sequential basis, margin declined by 220bp.
              This was mainly because the industrial systems segment carried short-cycled orders
              and, therefore, was unable to pass on the increase in commodity prices.
              In addition, orders of its subsidiary Nelco were being executed at very low
              margins, which impacted the margin of the entire segment.

              Nelco’s orders are expected to be completely executed in the next six months and
              management has guided margin improvement in the industrial systems segment in
              the coming quarters.



May 2, 2011                                                                                          3
                                            Crompton Greaves | 4QFY2011 Result Update



              Exhibit 4: Segment-wise performance (Consolidated)
                                                                 % chg                       % chg
              Y/E March (` cr)           4QFY11        4QFY10              FY11     FY10
                                                                  (yoy)                       (yoy)
              Revenue
              Power Systems                 1,923       1,684     14.2     6,503    6,204      4.8
              Consumer Products                 551       460     19.6     2,021    1,612     25.4
              Industrial Systems                435       348     25.0     1,497    1,259     18.9
              Others                             8.5     29.1    (70.8)       32     103     (69.4)
              Total                         2,917       2,521     15.7    10,053    9,179      9.5
              EBIT                                                          0.65
              Power Systems                     257       249      3.0      807      769       4.9
              Consumer Products                  79        67     17.5      293      230      27.4
              Industrial Systems                 65        89    (27.0)     264      276      (4.3)
              Others                        (13.8)        1.9   (811.9)      (25)     15    (266.0)
              Total                             387       407     (5.0)    1,339    1,290      3.8
              Revenue mix (%)
              Power Systems                     65.9     66.8               64.7     67.6
              Consumer Products                 18.9     18.3               20.1     17.6
              Industrial Systems                14.9     13.8               14.9     13.7
              Others                             0.3      1.2                0.3      1.1
              EBIT Margin (%)
              Power Systems                     13.4     14.8               12.4     12.4
              Consumer Products                 14.3     14.6               14.5     14.3
              Industrial Systems                14.9     25.6               17.6     21.9
              Others                      (162.7)         6.7              (79.1)    14.6
              Total                             13.3     16.2               13.3     14.1
              Source: Company, Angel Research

              Power systems segment aided by one-off orders: The 14.2% yoy increase in the
              power systems segment’s consolidated revenue was spurred by strong
              performance of its overseas entities. This was largely aided by exceptional
              EPC orders during the quarter. However, the trend is not sustainable from
              management’s point of view.

              Key highlights of the conference call
                  For FY2012, management has guided revenue growth of 12–15% for
                  domestic operations. The power systems segment will exhibit ongoing
                  weakness and is expected to report muted growth of 6–8%.
                  Strong performance is expected in the industrial and consumer segments, with
                  estimated growth rates of 18% and 22%, respectively. No margin pressure is
                  expected on the industrial and consumer segments due to cost pass-through
                  ability.
                  Overseas entities are expected to grow by 12–13% in euro terms and there is
                  headroom for margin improvement.
                  Tax rate is sustainable at the consolidated level. The company will continue to
                  enjoy tax benefits on a standalone basis on account of investment in R&D,
                  which are entitled to tax rebates.
                  Capex for FY2012 is estimated at `450cr.


May 2, 2011                                                                                       4
                                             Crompton Greaves | 4QFY2011 Result Update



              Strong order book

              Order intake for the quarter totaled `3,154cr and unexecuted order backlog at the
              end of 4QFY2011 stood at `7,169cr. Order backlog of the overseas business
              stood at `3,683cr, while that for the domestic business was `3,486cr. Even though
              order inflow from PGCIL and other state utilities was lower in FY2011,
              management expects ordering to gather pace after 1HFY2012.


              Exhibit 5: Order backlog
                                                                         7,116   7,017   7,169
                                                                 6,802
                        7,000    6,315   6,400           6,400
                                                 6,078

                        5,600
               (` cr)




                        4,200


                        2,800


                        1,400


                           -
                                1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11

              Source: Company, Angel Research




May 2, 2011                                                                                      5
                                                                                   Crompton Greaves | 4QFY2011 Result Update



                                                   Investment arguments

                                                   Power segment to drive growth: At present, the domestic power systems segment
                                                   accounts for 43% of the company’s standalone revenue. The massive capacity
                                                   expansion planned in the country has made inroads for investment opportunities in
                                                   power generation, thereby outlining huge investments in the T&D space. Renowned
                                                   for its sound expertise in manufacturing power transformers, extra high voltage
                                                   (EHV) and medium voltage (MV) circuit breakers, CG is well poised to harness the
                                                   opportunities in the government’s proposed upgrade of its 765kV ultra high
                                                   voltage segment. While the company is currently facing weakness in its power
                                                   systems segment due to stressed T&D market, a significant upside can be expected
                                                   in the coming quarters with PGCIL ordering expected to gear up. This will lead to
                                                   increased order intakes going ahead.

                                                   Diversified with the industry and consumer segments: The industrial systems and
                                                   consumer products segments are poised to post steady growth. With the likely
                                                   revival of domestic industrial capex, demand for HT and LT machines, namely
                                                   motors and generators, will complement the segment. Similarly, CG enjoys a
                                                   strong foothold in the domestic consumer market, with a strong product portfolio
                                                   of consumer appliances. The consumer products segment accounts for 20% of the
                                                   company’s total revenue, and collectively both these segments account for 35% of
                                                   the revenue base.


                                                   Outlook and valuation

                                                   Order inflows from PGCIL have been relatively low during FY2011. Further,
                                                   concern prevails over margins pressures arising on account of higher commodity
                                                   prices and increased competition going forward. However, industry commentary
                                                   indicates that ordering activity from PGCIL is likely to gather pace after 1HFY2012,
                                                   which will benefit CG in terms of order intakes. Despite margin compression,
                                                   pricing pressures and heightened competition, we believe higher growth in
                                                   international subsidiaries coupled with margin improvements can offset the
                                                   prevailing softness in the domestic power T&D segment. The stock quotes at 16.4x
                                                   and 13.4x FY2012E and FY2013E EPS, respectively. We maintain our Buy
                                                   recommendation on the stock with a revised price target of `300 (`330).


Exhibit 6: Change in estimates
                                                       FY2012E                                              FY2013E
(` cr)                            Earlier estimates Revised estimates    Var. (%)       Earlier estimates Revised estimates    Var. (%)
Revenue                                   11,063             11,029        (0.3)                14,150             12,867        (9.1)
EBITDA                                     1,549              1,482        (4.3)                 2,083              1,785       (14.3)
PAT                                        1,003                980        (2.3)                 1,372              1,198       (12.7)
Source: Company, Angel Research




May 2, 2011                                                                                                                          6
                                                                                                                Crompton Greaves | 4QFY2011 Result Update



                                                    Exhibit 7: Key assumptions
                                                        Segment growth rates (%)                                                                                                             FY2012E                             FY2013E
                                                        Power systems segment (Domestic)                                                                                                                5.0                               10.0
                                                        Power systems segment (International)                                                                                                         10.0                                10.0
                                                        Consumer products                                                                                                                             20.0                                22.0
                                                        Industrial systems                                                                                                                            10.0                                15.0
                                                        Source: Company, Angel Research


                                                    Exhibit 8: Angel EPS forecast
                                                                                                                                  Angel forecast                           Bloomberg consensus                                     Var (%)
                                                        FY2012E                                                                                          15.3                                                  16.3                       (6.3)
                                                        FY2013E                                                                                          18.7                                                  18.5                        0.9
                                                        Source: Company, Angel Research


                                                    Exhibit 9: One-year forward P/E band

                                                               420
                                                               350
                                                               280
                                                               210
                                                               140
                                                                70
                                                                    0
                                                                        Apr-05




                                                                                                   Apr-06




                                                                                                                              Apr-07




                                                                                                                                                         Apr-08




                                                                                                                                                                                    Apr-09




                                                                                                                                                                                                               Apr-10




                                                                                                                                                                                                                                          Apr-11
                                                                                 Aug-05




                                                                                                            Aug-06




                                                                                                                                       Aug-07




                                                                                                                                                                  Aug-08




                                                                                                                                                                                             Aug-09




                                                                                                                                                                                                                        Aug-10
                                                                                          Dec-05




                                                                                                                     Dec-06




                                                                                                                                                Dec-07




                                                                                                                                                                           Dec-08




                                                                                                                                                                                                      Dec-09




                                                                                                                                                                                                                                 Dec-10
                                                                                      Share Price (`)                                      2x                       8x                       14x                          20x

                                                        Source: Company, Angel Research




Exhibit 10: Peer comparison
Company                Reco.        CMP Tgt. price Upside                  P/BV(x)                             P/E(x)                      FY2011-13E                               RoCE (%)                             RoE (%)

                                      (`)         (`)        (%) FY12E FY13E FY12E FY13E                                                         EPS CAGR FY12E FY13E FY12E FY13E
ABB*                   Sell          858        595       (30.6)         6.3              5.3               36.2              29.2                        213.1                     26            27.9             18.7              19.7
Areva T&D*             Neutral       279           -            -        5.5              4.7               28.8              25.7                          17.9               24.0               26.9             20.8              19.8
BHEL                   Neutral     2,001           -            -        4.0              3.3               14.1              12.6                          13.5               32.1               36.1             29.5              26.6
BGR Energy             Buy           550        700        27.3          3.3              2.4               11.1               6.5                          41.5               24.2               31.3             33.7              42.2
Crompton Greaves       Buy           250        300        20.0          4.0              3.2               16.4              13.4                          16.1               30.4               31.1             26.8              26.3
Jyoti Structures       Buy            85        110        28.9          0.9              0.8                6.3               5.1                          27.6               26.4               26.4             18.0              16.6
KEC International      Buy            86        115        34.5          2.0              1.6                8.9               6.7                          26.0               22.6               25.5             24.4              26.0
Thermax                Neutral       647           -            -        4.6              3.7               17.7              15.7                          16.3               30.2               27.6             28.8              26.1
Source: Company, Angel Research. *Note: December year ending.




May 2, 2011                                                                                                                                                                                                                                    7
                                             Crompton Greaves | 4QFY2011 Result Update



              Profit and loss Statement (Consolidated)
              Y/E March (` cr)                  FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E
              Operating income                   6,832   8,737   9,141 10,005     11,029   12,867
               % chg                              21.2    27.9     4.6      9.5     10.2     16.7
              Total Expenditure                  6,086   7,742   7,864    8,661    9,547   11,082
              Raw Materials                      3,371   4,153   4,328    5,079    5,192    6,038
              Mfg costs                          1,194   1,541   1,469    1,190    1,901    2,245
              Personnel Costs                     797    1,065   1,113    1,181    1,351    1,512
              Other Costs                         725     983     954     1,211    1,103    1,287
              EBITDA                              746     996    1,277    1,344    1,482    1,785
               % chg                              54.5    33.5    28.3      5.2     51.3     20.5
               (% of Net Sales)                   10.9    11.4    14.0     13.4     13.4     13.9
              Depreciation& Amortisation          126     122     155      194      220      259
              EBIT                                620     874    1,122    1,150    1,262    1,526
               % chg                              60.0    41.0    28.4      2.5      9.7     20.9
               (% of Net Sales)                    9.1    10.0    12.3     11.5     11.4     11.9
              Interest & other Charges             78      81       43      21       25       16
              Other Income                         74      74     110      100      124      153
               (% of PBT)                         12.0     8.5     9.2      8.1      9.1      9.2
              Recurring PBT                       615     867    1,189    1,229    1,361    1,663
               % chg                              41.1    40.9    37.1      3.4     10.7     22.2
              Extraordinary Expense/(Inc.)          0       0       35     (38)       0        0
              PBT (reported)                      615     867    1,224    1,191    1,361    1,663
              Tax                                 205     305     365      310      381      466
               (% of PBT)                         33.4    35.1    30.7     25.2     28.0     28.0
              PAT (reported)                      410     563     859      881      980     1,198
              Add: Share of earnings of asso.       2      (1)       3       8        0        0
              Less: Minority interest (MI)          5       2        3      0.4       0        0
              Prior period items                    0       0        0      0.0       0        0
              PAT after MI (reported)             407     560     825      927      980     1,198
              ADJ. PAT                            407     560     860      889      980     1,198
               % chg                              44.3    37.7    53.6      3.3     10.2     22.2
               (% of Net Sales)                    6.0     6.4     9.4      8.9      8.9      9.3
              Basic EPS (`)                       11.1    15.3    13.4    13.85     15.3     18.7
              Fully Diluted EPS (`)               11.1    15.3    13.4     13.9     15.3     18.7
               % chg                              44.3    37.7   (12.2)     3.3     10.2     22.2




May 2, 2011                                                                                     8
                                          Crompton Greaves | 4QFY2011 Result Update



              Balance sheet (Consolidated)
              Y/E March (` cr)              FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E
              SOURCES OF FUNDS
              Equity Share Capital             73      73     128     128     128     128
              Preference Capital                0       0       0       0       0       0
              Reserves & Surplus             1,228   1,758   2,376   3,146   3,938   4,926
              Shareholders’ Funds            1,302   1,831   2,504   3,275   4,067   5,054
              Minority Interest                12      14       4      16      16      16
              Total Loans                     842     718     501     470     251     201
              Deferred Tax Liability            0      85      95     124     124     124
              Total Liabilities              2,156   2,648   3,104   3,885   4,458   5,395
              APPLICATION OF FUNDS
              Gross Block                    2,685   3,029   2,986   3,586   4,186   4,936
              Less: Acc. Depreciation        1,489   1,704   1,723   1,917   2,137   2,396
              Net Block                      1,197   1,325   1,262   1,669   2,049   2,540
              Capital Work-in-Progress         48      54     114     125     125     125
              Goodwill                           -       -       -       -       -       -
              Investments                      93     167     554     675     950    1,150
              Deferred Tax Asset               59     133      90     108     108     108
              Current Assets                 3,402   3,945   4,102   4,550   5,089   5,945
              Cash                            244     566     669     298     668     881
              Loans & Advances                370     229     246     468     533     619
              Inventories                    1,066   1,095   1,041   1,189   1,168   1,272
              Debtors                        1,720   2,056   2,146   2,543   2,720   3,173
              Others                             -       -       -     51       0       0
              Current liabilities            2,642   2,976   3,017   3,389   3,863   4,473
              Net Current Assets              759     969    1,085   1,160   1,225   1,472
              Mis. Exp. not written off          -       -       -       -       -       -
              Total Assets                   2,156   2,648   3,104   3,885   4,458   5,395




May 2, 2011                                                                             9
                                             Crompton Greaves | 4QFY2011 Result Update



              Cash flow statement (Consolidated)
              Y/E March (` cr)                FY2008 FY2009 FY2010 FY2011E FY2012E FY2013E
              PAT                               407     560     860     889     980    1,198
              Adjustments                       446     598     433     555     626     741
              Opr Profits Before W/Cap
                                                853    1,158   1,293   1,444   1,606   1,938
              Changes
              Changes in Working Capital        (84)      6      54    (446)    200     (77)
              Taxes Paid during the year       (187)   (217)   (292)   (310)   (359)   (445)
              Cash Flow from Operations         579     944    1,056    695    1,447   1,417
              (Inc.)/Dec in Fixed Assets       (253)   (198)   (207)   (566)   (600)   (750)
              (Inc.)/Dec in Investments        (102)   (140)   (436)   (121)   (275)   (200)
              (Inc.)/Dec in Loans/advances        0       0       0       0       0       0
              Other Income                        8      16      68    (162)    138       0
              Cash Flow from Investing         (347)   (322)   (575)   (849)   (737)   (950)
              Issue of Equity                     0       0       0       0       0       0
              Inc/(Dec) in Loans                (91)   (137)   (217)    (31)   (150)    (50)
              Dividend Paid (incl.Tax)          (70)    (81)   (116)   (165)   (165)   (188)
              Others                            (68)    (83)    (45)    (21)    (25)    (16)
              Cash Flow from Financing         (229)   (302)   (378)   (217)   (340)   (253)
              Cash generated/(utilised)           3     321     103    (370)    369     213
              Cash at start of the year         241     244     566     669     298     668
              Cash at end of the year           244     566     669     298     668     881




May 2, 2011                                                                              10
                                              Crompton Greaves | 4QFY2011 Result Update



              Key ratios
              Y/E March                           FY2008 FY2009 FY2010 FY2011E FY2012E FY2013E
               Valuation Ratio (x)
               P/E (on FDEPS)                       22.5   16.4   18.6    18.0    16.4    13.4
               P/CEPS                               17.2   13.4   15.8    14.8    13.4    11.0
               P/BV                                  7.1    5.0    6.4     4.9     4.0     3.2
               Dividend yield (%)                    0.6    0.8    0.9     0.9     1.0     1.1
               EV/Sales                              2.4    1.8    1.7     1.6     1.4     1.1
               EV/EBITDA                            22.3   16.2   12.2    11.8    10.1     8.1
               EV / Total Assets                     8.9    7.0    5.5     4.1     3.4     2.7
               Per Share Data (`)
               EPS (Basic)                          11.1   15.3   13.4    13.9    15.3    18.7
               EPS (fully diluted)                  11.1   15.3   13.4    13.9    15.3    18.7
               Cash EPS                             14.5   18.6   15.8    16.9    18.7    22.7
               DPS                                   1.6    2.0    2.2     2.2     2.5     2.8
               Book Value                           35.1   49.5   38.8    50.8    63.2    78.6
               DuPont Analysis (%)
               EBIT margin                           9.1   10.0   12.3    11.5    11.4    11.9
               Tax retention ratio (%)              66.6   64.9   69.3    74.8    72.0    72.0
               Asset turnover (x)                    4.7    5.6    5.7     4.4     3.8     4.1
               RoIC (Pre-tax)                       42.6   55.9   70.0    50.7    43.9    49.2
               RoIC (Post-tax)                      28.4   36.3   48.5    37.9    31.6    35.4
               Cost of Debt (Post Tax)               6.0    6.7    4.9     3.2     5.0     5.0
               Leverage (x)                          0.7    0.2   (0.1)   (0.1)   (0.2)   (0.3)
               Operating ROE                        44.3   43.6   43.6    33.7    27.0    26.7
               Returns (%)
               RoCE (Pre-tax)                       35.2   41.9   43.7    34.3    30.4    31.1
               Angel RoIC (Pre-tax)                 44.9   57.8   73.8    53.6    45.9    51.3
               RoE                                  46.9   44.8   46.3    32.4    26.8    26.3
               Turnover ratios (x)
               Asset Turnover (Gross Block) (X)      3.1    3.4    3.4     3.2     2.8     2.8
               Inventory / Sales (days)              53     45      43      41      39      35
               Receivables (days)                    84     79      84      86      87      84
               Payables (days)                      110     98     105    102     103     101
               WC cycle (ex-cash) (days)             26     19      16      23      23      16
               Solvency ratios (x)
               Net debt to Equity                    0.6    0.0   (0.2)   (0.1)   (0.3)   (0.3)
               Net debt to EBITDA                    0.8    0.0   (0.4)   (0.2)   (0.7)   (0.9)
               Interest Coverage                     7.9   10.8   26.2    55.0    50.0    96.5




May 2, 2011                                                                                11
                                                                                  Crompton Greaves | 4QFY2011 Result Update




  Research Team Tel: 022 - 39357800                   E-mail: research@angelbroking.com                    Website: www.angelbroking.com

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  Disclosure of Interest Statement                                          Crompton Greaves
  1. Analyst ownership of the stock                                               No
  2. Angel and its Group companies ownership of the stock                         No
  3. Angel and its Group companies' Directors ownership of the stock              No
  4. Broking relationship with company covered                                    No


  Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors


  Ratings (Returns):              Buy (> 15%)                            Accumulate (5% to 15%)                     Neutral (-5 to 5%)
                                  Reduce (-5% to 15%)                    Sell (< -15%)




May 2, 2011                                                                                                                                12

				
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