Crompton Q3: Analysts expect profit to fall 1% at Rs 76 cr

Engineering company Crompton Greaves is set to announce its results for the third quarter of financial year 2012-13 on Tuesday. Analysts on an average expect the company to report weak numbers in the quarter.

Consolidated profit after tax is likely to fall by 1.1 percent year-on-year to Rs 76 crore in the quarter whereas total income is seen going up by 6.9 percent to Rs 3,237 crore from Rs 3,028 crore during the same period.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to go down by 5.1 percent YoY to Rs 173 crore in October-December quarter. EBITDA margin is seen falling by 70 basis points YoY to 5.4 percent in the third quarter.
According to analysts, resumption of normalcy post transition of company’s facilities from Belgium to Hungary may take longer time and put pressure on near-term earnings. Performance of international business will be key
Analysts expect 7 percent YoY de-growth in topline
International business is likely to report losses of approximately Rs 35-40 crore.
Losses will reflect a continued weak cost structure. Analysts feel benefits of restructuring will trickle in only post Q3.
On margin front, analysts expect slight rebound as against negative margin in previous quarter in international business Expect a steady standalone business
Analysts feel the domestic business will continue seeing momentum in revenues across segments (+12 percent YoY)
Analysts estimate 7 percent order inflow growth, driven largely by strength in India T&D ordering
Order Inflow for the quarter is expected to be at Rs 4,185 crore, up 7 percent YoY and 32 percent QoQ
Investors should watch out for improvement in margin in international business and increase in interest costs due to the debt taken to fund the recent ZIV acquisition.