Crompton Greaves profit likely to fall 40% in Q3

Transformer manufacturer Crompton Greaves is expected to report a consolidated profit after tax of Rs 140 crore in the third quarter of FY12, falling 40% as compared to Rs 233 crore in a year ago quarter.

Net sales are seen going up by 12% to Rs 2,693 crore from Rs 2,397 crore year-on-year.  EBITDA is likely to go down 26% to Rs 252 crore from Rs 340 crore during the same period.

Operating profit margin is expected to be falling at 9.37% in the quarter ended December FY12 versus 14.19% in the corresponding quarter of last fiscal.

Expectations

- Expect moderate revenue growth aided by overseas subsidiaries and partially by the rupee depreciation

- Expect slowdown to continue in the domestic power segment

- Margins expected to decline YoY but improve QoQ due to cooling of commodity prices on a QoQ basis

- Expect consequent de-growth in PAT

Management so far has been unsuccessful in meeting its guidance of higher R&D expense and therefore reduced tax rate of 15%

* Company's tax rate in the first half was 32%