February 16, 2017 / 12:20 IST
CG posted a much better P/L in standalone operations with strong 39% YoY growth in EBIDTA for Q3FY17. However, higher interest cost (up 5x YoY & 32% QoQ) led to flattish PAT. The company sustained strong traction in order intake. In Q3FY17, new orders growth at 19% YoY to INR 12.2bn was led by strong growth in industrial orders (up 36% YoY), which was driven by robust ordering in railway segment in past 2-3 quarters.
Outlook
Given current scenario in T&D equipment industry globally with >50% overcapacity, we believe it will not be easy for management to exit global T&D plants. However, early exit would pose upside risk to our call. Maintain ‘HOLD/SP’ At CMP, the stock trades at 27/20x its FY18E/FY19E EPS.
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