Crompton Q4: Analysts expect 30% fall in PAT at Rs 70 cr

Crompton Greaves will report its fourth quarter (January-March) numbers Friday. Analysts on an average expect the engineering firm's consolidated profit after tax to fall 30.2 percent year-on-year to Rs 70 crore during the quarter because of continued losses in the subsidiaries.

Higher depreciation and interest expenses will also further dampen the profitability.

However, the results will look exceptionally bright if compared on a Q-o-Q basis. Crompton had reported a loss of Rs 189 crore in October-December quarter because of the one time restructuring charges.

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Net sales are likely to go up by 10 percent Y-o-Y (nearly 14 percent sequentially) to Rs 3,385 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to be at Rs 175 crore in fourth quarter FY13 as against Rs 213 crore in a year ago period and Rs 2 crore in previous quarter.

Operating profit margin may fall 170 basis points year-on-year (increase 510 basis points Q-o-Q) to 5.2 percent in January-March quarter due to higher costs and consequent losses being faced in the international markets.

Crompton is incurring higher cost due to increased rural penetration in consumer products.

Expectations on consolidated results

Revenue growth is expected to gain momentum after the slip in Q3, but problems on the power division will ensure only a modest growth on the topline.

Investors should watch out for losses in the international business. Savings from restructuring in Belgium would also be watched. The company had guided for savings of Euro 3.7 million in Q4FY13.

Analysts expect order inflows to slow sharply because of weak domestic ordering scenario, so international orders could be the swing factor. Order book stood at Rs 9230 crore as of December 2012.

Consumer products segment is expected to post robust performance.