Moneycontrol
Feb 02, 2012 12:39 PM IST | Source: CNBC-TV18

Gloom done, blue skies ahead for Crompton Greaves: Religare

Crompton Greaves was one of the most hyped stocks in the second quarter. The company posted a 58 % drop in net profits, sale of shares by former vice-chairman S M Trehan and the company's decision to acquire a jet plane for Rs 270 crore proved to be costly.


Crompton Greaves was one of the most hyped stocks in the second quarter. A massive drop of 58% in net profits, sale of shares by former vice-chairman S M Trehan and the company's decision to acquire a jet plane for Rs 270 crore proved to be costly.


However, the company surprised the streets with topline growth of 26% in the third quarter. Suhas Harinarayanan, Co-Head of Research, Religare Capital Markets mentions a couple of key takeaways from the conference call. The margins have bottomed out and the order inflow in third quarter was reasonably good. The stock can touch Rs 200 in the coming months.


The company sold aircraft in Q3 at book value but it will have no impact on Profit & Loss statement.


Below is an edited transcript of his interview. Watch the accompanying video for more.


Q1: What were the key positives you took away from the conference call of Crompton Greaves post which the stock reacted quite positively?

A: Firstly a drop in margins which we saw in Q3 was probably pertaining to one-off items and mainly in the international business. So the domestic business margin seems to have stabilized and clearly bottomed out. I don

Sections
Follow us on
Available On