Crompton Greaves's earnings are expected to be muted in first quarter of FY16 as consolidated revenue is seen rising 0.5 percent year-on-year to Rs 3,460 crore, according to a CNBC-TV18 poll.
Consolidated profit is likely to increase 17.4 percent to Rs 75.2 crore in June quarter compared to Rs 64 crore in the corresponding quarter of last fiscal.
Analysts feel euro depreciation (16 percent Y-o-Y appreciation of the rupee against euro) may impact growth in overseas business while domestic business growth is likely to remain largely sedate.
Power systems business of Crompton, which is in the business of management and application of electrical energy, is expected to report muted growth whereas consumer products business may show some signs of improvement during the quarter.
Analysts expect weak performance in subsidiaries to continue as margin recovery continued to get delayed and expect international subsidiaries to report losses of Rs 38-40 crore in Q1FY16.
According to poll, additional provisions are likely in the Hungary business, which may add to margin volatility.
Operating profit (operating before interest, tax, depreciation and amortisation) is seen rising 2.6 percent year-on-year to Rs 177 crore and margin may expand 10 basis points to 5.1 percent in the quarter gone by.
On standalone basis, profit during the quarter may fall 11 percent to Rs 113 crore and revenue may slip 15 percent to Rs 1,619 crore compared to same quarter last year. Operating profit is likely to decline 18.7 percent to Rs 139 crore and margin may dip 40 basis points to 8.6 percent.
During the quarter, Avantha Holdings has sold its 34.37 percent shareholding in the consumer business to Advent/Temasek for Rs 2,000 crore. Avantha Power (wherein 23.14 percent stake held by Crompton Greaves) has completed the divestment of 100 percent stake in Korba power plant (1.3 GW) with Adani Power.
Further, the management aims to monetise around Rs 1,000 crore of non-core assets, including additional land at Kanjurmarg to lower the standalone business debt. Even there are reports that the company may announce the sale of its international power business along with Q1 earnings.
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