Hold Crompton Greaves; target of Rs 185: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Crompton GreavesThe Q3FY2016 numbers reported by Crompton Greaves Ltd (CGL) excludes numbers of the demerged consumer business. Its operating performance was poor and substantially lower than our as well as Street estimate. The stand-alone business was affected with weaker power system sales which had a bearing on its margin and earnings. The performance of overseas subsidiaries deteriorated (operating level loss of Rs43 crore) further and dragged the overall performance. At the net level, Rs125 crore of loss by subsidiaries coupled with drop in stand-alone profit resulted into higher net loss (Rs96 crore loss in Q3FY2016 vs Rs49 crore in Q3FY2015) for the consolidated entity. We believe, the focus of CGL management has been on restructuring for some time now and the outlook remains tepid, as reflected in the soft order book picture. Given the scenario, we have trimmed our estimate for the CGL. Though the Q3 result excludes the demerged consumer business and restated accordingly, we continue to include consumer business in our current estimate as the demerged consumer business is yet to get listed. We believe CGL (ex-consumer) is having significant headwinds ahead while the consumer business (to be listed in future) is likely to sustain healthy performance and derive substantial value for shareholders post-listing. Therefore, we recommend investors to Hold the stock till the listing of its consumer business. 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.

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