Religare's research report on Crompton GreavesWith effect from 15 Mar’16, CRG’s shares will trade ex-consumer business (record date: 16 Mar’16). Also, the demerged power & industrial business will be debt-free post conclusion of the recently announced sale of international businesses. This along with CRG’s renewed focus on the B2B business would lead to a meaningful improvement in its return ratios from here on. We value the consumer business at Rs 115/sh and the power & industrial business at Rs 55/sh (or 13x FY18 PE). BUY; Mar’17 TP Rs 55.CRG’s overseas operations would also comprise power systems (€20-30mn) until the business is shut down/sold off. While the Brazil business has already been shut down, the US Power Solutions business is likely to be sold by Jun’16; however, winding down of the UK Power Solutions business could still be some time away. Thus, we estimate lower FY17 EBITDA margins (4%) for the power segment as closure of the systems business may not be completed within specified timelines.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Read More
