Crompton Greaves Ltd consolidated net profit at Rs4.6cr in Q1FY19 vs net loss of Rs42.4cr in Q1FY18: Misses Estimates

The company’s consolidated revenue stood at Rs1,490.1cr, up 11.3% yoy

Aug 10, 2018 09:08 IST India Infoline Research Team

Crompton Greaves Ltd Q1FY19

Consolidated Results Q1FY19: (in Rs cr)

Q1FY19 YoY (%)
Revenue 1,490.1 11.3
EBITDA 119.2 142.3
EBITDA Margin (%) 8 433
Net Profit (adjusted) 4.6 -
***EBITDA margin change is bps
CG Power and Industrial Solutions Ltd’s Q1FY19 consolidated sales increased 11.3% yoy to Rs1,490.1cr from Rs1,339.0cr (net of excise duty) in Q1FY18 as against expectations of Rs1,767cr. EBITDA increased 142.3% yoy to Rs119.2cr from Rs49.2cr in Q1FY18 as against estimated EBITDA of Rs126cr. EBITDA margin increased to 8% in Q1FY19 from 3.7% in Q1FY18, an expansion of 433bps yoy. The company reported a net profit (from continued operations) at Rs4.6cr vs net loss of Rs42.4cr in Q1FY18.

• Sales growth was led by Industrial Systems, which grew 14% yoy to Rs718.2cr, while EBIT margin improved yoy from 2.6% in Q1FY18 to 8.7% in Q1FY19.

• Power Systems segment sales have declined 4% yoy to Rs768.5cr. However, there was a sharp yoy improvement in EBIT margin from 5.3% to 8.8% in Q1FY19.

• Better operating performance particularly in industrial systems (price hikes and better product mix) led to a strong growth in profit before tax (PAT), which came in at Rs33.2cr vs a loss of Rs27.1cr. in Q1FY18. However, higher tax incidence of Rs27.2cr vs 14.6cr in Q1FY18 has resulted in lower profits.
• CG has adjusted the cumulative effect of initial application of Ind-AS 115 up to FY18 in opening reserves of FY19 (amount not disclosed). Hence, its consolidated revenue and PAT for Q1FY19 is higher by Rs90.4cr/Rs12.7cr due to Ind AS 115.

• Losses from discontinued operations were at Rs90.2cr, primarily for additional one quarter of operating losses in the Hungary business with delay in effective handover date from April-July 2018 apart from likely impact from systems business where financial closure is underway. Its Belgium operations has been EBITDA positive for past few quarters, while the Ireland operations are also expected to be breakeven at PBT level in FY19. 

Technical View:

CG Power & Industrial Solutions Ltd ended at Rs60.10, down 1 point, or 1.64%, from its previous close of Rs61.10 on the BSE. The scrip opened at Rs61.25 and touched a high and low of Rs62.20 and Rs59, respectively. A total of 63,53,487 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.

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