crompton greaves 3qfy15 performance remains a mixed bag; buy
TRANSCRIPT
3 February 2015
3QFY15 Results Update | Sector: Capital Goods
Crompton Greaves
Satyam Agarwal ([email protected]); +91 22 3982 5410
Amit Shah ([email protected]) / Nirav Vasa ([email protected])
BSE SENSEX S&P CNX CMP: INR179 TP: INR275 (54%) Buy 29,000 8,757 Bloomberg CRG IN Equity Shares (m) 626.7
M.Cap. (INR b) / (USD b) 118.3/1.9 52-Week Range (INR) 231/110
1, 6, 12 Rel. Per (%) -8/-21/16 Avg Val/Vol ‘000 1017/5444
Free float 65.6
Financials & Valuation (INR Billion)
Y/E Mar 2015E 2016E 2017E
Net Sales 141.7 155.9 179.8 EBITDA 6.9 9.7 14.0 Adj PAT 2.4 5.7 9.0 EPS(INR) 3.9 9.1 14.5 EPS Gr.
(1.0) 137.1 59.0
BV/Sh.
60.9 68.2 79.9 RoE (%) 6.4 14.0 19.5 RoCE (%) 4.9 10.3 14.9 P/E (x) 46.4 19.6 12.3 P/BV (x) 2.9 2.6 2.2
Estimate change 12%
TP change
Rating change
CRG’s 3QFY15 performance continues to be a mixed bag: Standalone results have been stable (EBIDTA margins at 8.7% and EPS of INR2/sh), while disappointment continues to be the overseas business (EBIDTA level loss, despite EUR revenues up 8.4% YoY; resulting in continued PAT loss of INR1.2b).
Standalone performance stood flat YoY as power systems business saw a de-growth of 11% YoY led by delay in shipment of export order. Power systems export for the quarter stood at INR1.34b, decline of ~INR1.0b YoY. Consumer segment has witness a strong growth of 11% YoY led by 10% YoY growth in fans and pump segment each. Industrial System segment performance remain muted (-2% YoY) due to sluggishness witnessed in the railway segment.
Overseas business slipped in to losses of INR107m at operating level as 17m Euro legacy order of 24 unit of power transformer got executed during the quarter. CG took a one time hit of INR640m upon execution of the order. Performance was primarily hit by losses in Hungary and Canadian operations, whereas Americas, Belgium and South East Asia operations turn profitable led by improvement in operational performance. Overseas business margins should continue to witness pressure at operational level as legacy orders worth 20m Euro are yet to be executed. Adjusted net loss for the quarter stood at INR1.2b
We cut our consolidated earnings estimates, maintain Buy rating: We are maintaining standalone EPS estimates: FY15 INR8.2 (+1% YoY), FY16 INR10.5 (up 27%) and FY17 INR13.7 (up 31%); we have revised our consolidated earnings estimate downwards led by delay in turnaround of the overseas business. Our revised EPS stands at: FY15 INR3.9 (flat YoY), FY16 INR9.1 (+137% YoY) and FY17 INR14.5 (up 59%). Maintain Buy, with price target of INR275/sh (20x FY17 for standalone, 0.5x EV/ Revenues for overseas subsidiaries).
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
3 February 2015 2
Crompton Greaves
Standalone business reports stable performance, despite negative operating leverage in power / industrial segments Standalone revenues at INR18.6b were down 1.5% YoY (below our estimates of
5.8%), while standalone EBITDA margins at 8.7% (estimates of 8.8%) were down 7bp YoY. Standalone performance has been muted as power systems business witnessed de-growth of 11% YoY led by delay in shipment of Export order, which management expects to book in 4QFY15.
Revenues in Power business at INR6.5b down 11.3% YoY, led by weaker exports sales. Exports sales stood at INR1.3b (down 49% YoY) led by delay in shipment of export order, which management is confident to book in 4QFY15. PGCIL tendering has also witnessed a meaningful increase from January 2015 onwards.
Industry business revenues were down 1.9% YoY, led by constrained investment climate. The management indicated that the revenue loss is mainly on account of the sluggishness in the railways segment. New factories of HT motors and Drives should increasingly contribute to revenues, as the process of obtaining pre-qualifications has been underway. Railway segment has started to witness some signs of traction and should translate into revenues in 4QFY15.
Consumer business revenues were up 11% YoY. Fans reported robust revenue growth of 10% YoY, Pumps (+10% YoY), Lighting (+8% YoY), etc.
Power business EBIT margins stood at 8.0% (down 147bps YoY), and is lower than estimates led by slugish export order execution. Industrial margins stood at 10.6% (flat YoY) and are impacted by commissioning of the Bhopal HT motors plant in July 2013, increased costs for customer certifications and also the negative operating leverage. Consumer business margins stood at 12.0% (up 31bps YoY) largely led by improved product mix towards fans and lighting.
Order intake in 2QFY15 in standalone business stood muted at INR11b (down 1% YoY), as Industrial orders have witnessed a decline of 11% YoY led by delay in finalization in order of railway segment
Exhibit 1: Muted Revenue performance led by de-growth in power systems segment
Source: MOSL, Company
Exhibit 2: Margins remain constrained led by negative operating leverage
Source: MOSL, Company
13,4
2914
,448
13,9
8617
,652
14,6
8814
,515
16,2
4519
,406
16,5
9216
,702
17,4
6120
,599
18,4
0717
,867
18,6
7720
,566
19,0
4719
,235
18,5
82
14 14 149 9
0
16
1013 15
7 611
7 7
03
8
-1
1QFY
11
3QFY
11
1QFY
12
3QFY
12
1QFY
13
3QFY
13
1QFY
14
3QFY
14
1QFY
15
3QFY
15
Standalone Revenue (INR m) Revenue Growth (% YoY)
12.7
13.1
12.8
15.9
14.8
16.5
16.6
16.7
15.6
16.0
16.3
15.0
12.7
11.1
10.8
10.2
9.5
8.8
7.6
6.9
8.3
8.9
9.1
9.0
9.0
8.7
8.7
1QFY
09
3QFY
09
1QFY
10
3QFY
10
1QFY
11
3QFY
11
1QFY
12
3QFY
12
1QFY
13
3QFY
13
1QFY
14
3QFY
14
1QFY
15
3QFY
15Standalone EBITDA Margin (%)
3 February 2015 3
Crompton Greaves
Exhibit 3: Quarterly Performance (Standalone), INR M FY14 FY15 FY14 FY15E 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE 3Q vs Est Sales 18,407 17,867 18,677 20,566 19,047 19,235 18,582 22,965 75,707 79,829 19,764 -6% Change (%) 10.9 7.0 7.0 -0.2 3.5 7.7 -0.5 11.7 6.1 5.4 5.8 EBITDA 1,524 1,590 1,693 1,852 1,710 1,670 1,624 2,072 6,658 6,905 1,742 -7%
Change (%) -3.8 8.2 27.7 30.4 12.2 5.0 -4.1 11.9 12.0 3.7 2.9
As of % Sales (Adj) 8.3 8.9 9.1 9.0 9.0 8.7 8.74 9.0 8.8 8.6 8.8 -7bp
Depreciation 212 217 220 245 239 240 242 256 894 977 245
Interest -66 -107 -9 -38 -42 -38 -92 -3 -221 -175 -50
Other Income 298 295 294 252 203 288 224 236 1,139 950 210
PBT 1,676 1,775 1,777 1,896 1,716 1,757 1,697 2,055 7,125 7,053 1,757 -3%
Tax 430 427 421 635 450 497 422 517 1,914 1,887 472 Effec. Tax Rate (%) 25.7 24.1 23.7 33.5 26.2 28.3 24.9 25.1 26.9 26.8 26.9
Reported PAT 1,246 1,348 1,355 1,261 1,266 1,260 3,950 1,538 5,211 5,166 1,285
Adj PAT 1,246 1,348 1,355 1,261 1,266 1,260 1,275 1,538 5,211 5,166 1,285 -1% Change (%) 3.6 20.7 27.7 17.1 1.5 -6.6 -5.9 22.0 16.9 -0.9 -5.2
Source: MOSL, Company
Overseas business revenues up 8.4% YoY (in Euro), slips in to loss at operating levels Overseas subsidiaries revenues were up 8.4% YoY in Euro terms, while it slipped
into losses of INR107m at operating levels with -0.7% operating loss margins (vs -0.1% YoY). Execution of legacy order (transfer order from Belgium to Hungary) worth Euro 17m has led to additional liability of INR640m. Interest cost increased by 34% YoY led by elongation in working capital cycle. Legacy orders worth Euro20m are yet to be executed which might incur additional liability going ahead. Adjusted net profit stood at INR2.7b
The management indicated that US/ Belgium / South East Asia systems business have maintained the trend of improvement in operational performance. However Canada and hungary has witnessed loss of 1.6/4m Euro respectively in 3QFY15 .
Going forward, the execution of: i) transfer projects / GIS projects at Hungary of 20m Euro, can probably put margins under pressure in the overseas business.
Order intake during the quarter stood at INR13.4b, down 44% YoY (in INR) and largely supported by automation / system orders.
3 February 2015 4
Crompton Greaves
Exhibit 4: CG Global Revenues are up 8.4% in EUR
Source: MOSL, Company
Exhibit 5: Legacy order execution leads to operating loss
Source: MOSL, Company
Exhibit 6: Subsidiary performance (INR M)
FY14 FY15
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QE Revenues 13,541 14,546 15,026 17,495 15,369 15,068 14,750 16,649
Revenue growth, % 17.5 16.0 22.6 31.8 13.5 3.6 -1.8 -4.8 EBIDTA -76 23 -22 30 17 14 -107 75
As of % Sales -0.6 0.2 -0.1 0.2 0.1 0.1 -0.7 0.5 Depreciation 316 445 499 468 432 422 424 406 Interest 267 300 276 343 287 264 371 422 Other Income 55 31 110 588 183 167 21 262 Exceptional items (reported) 0 0 0 0 0 0 0 0 PBT -604 -692 -688 -193 -518 -505 -880 -490 Tax 34 79 72 263 99 73 343 -119 Effective Tax Rate (%) -5.6 -11.3 -10.5 -135.9 -19.2 -14.4 -38.9 24.2 Reported PAT -666 -747 -735 -633 -624 -562 -1,242 -320 Adjusted PAT -666 -747 -735 -633 -624 -562 -1,242 -320
Source: MOSL, Company
Exhibit 7: Consolidated - Segmental (INR M)
1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15
Revenues Power Division 18,180 20,409 21,322 25,009 20,193 21,378 20,666 Industrial Division 4,521 4,471 4,783 4,481 4,526 4,618 7,262 Consumer Division 7,885 6,721 6,510 7,484 8,611 7,431 4,609 Others 1,130 934 1,071 807 1,212 972 1,090
Total 31,715 32,535 33,685 37,781 34,541 34,399 33,626 Less: Inter segment 143 122 165 117 126 95 264
Net Sales 31,572 32,414 33,520 37,665 34,415 34,303 33,362
EBIT Margin (%) / bp Power Division 1.5 2.0 2.5 4.5 1.8 2.2 1.5 Industrial Division 8.5 7.5 6.2 6.0 6.8 9.2 11.7 Consumer Division 11.9 11.4 11.7 12.1 12.6 12.0 6.1 Others -0.9 2.8 2.0 1.9 -3.3 -4.4 -5.5
Total 5.0 4.7 4.8 6.2 5.0 5.1 4.1
Source: MOSL, Company
10,2
41
9,20
5 10
,227
8,
897
9,59
3 9,
531
9,98
4 11
,428
9,
689
12,5
41
14,0
35
11,3
67
11,5
20
12,5
40
12,2
58
13,2
74
13,5
41
14,5
46
15,0
26
17,4
95
15,3
69
15,0
68
14,7
50
8-9 -4
-19-6
4 -2
28
1
3241
-119
0-13
17 18 16 2332
134 -2
1QFY
10
3QFY
10
1QFY
11
3QFY
11
1QFY
12
3QFY
12
1QFY
13
3QFY
13
1QFY
14
3QFY
14
1QFY
15
3QFY
15
Overseas Revenue (INR m) Revenue growth, %YoY
9.2 10
.7
11.2
9.5
-0.5
5.2
0.5 1.4
1.8
0.2
-3.9
-4.8
-0.6 0.2
-0.1
0.2
0.1
0.1
-0.7
1QFY
11
3QFY
11
1QFY
12
3QFY
12
1QFY
13
3QFY
13
1QFY
14
3QFY
14
1QFY
15
3QFY
15
Overseas EBITDA Margin (%)
3 February 2015 5
Crompton Greaves
Automation business witnessing strong projects pipeline Automation business is witnessing good pipeline of projects globally, and CRG
has been bidding for several of these projects. Increased order intake in automation business is driven by commencement of ordering by Iberdrola in Spain, Linky’s project in France and also orders in Poland, Portugal, etc.
Even in India, FY16 performance will largely be a reflection of the acceleration in industrial and consumer business with improved economic activity.
Exhibit 8: Domestic order book decline led by delay in finalization of orders
Source: MOSL, Company
Exhibit 9: Overseas order intake supported by automation
Source: MOSL, Company
Consumer demerger: unlock value, strategic possibilities CRG announced de-merger of the consumer business (appointed date April 2015), with CRG retaining 25% stake and listing expected by Nov 2015. While the demerger will aid value unlocking, the structure is not optimal given retention of 25% stake by CRG. Management stated the intent to increase revenues of CRG (ex consumer) from INR106b in FY14 to INR140b in FY18, with margins of 6-7% (2.8% in FY14). Consumer business is likely to double revenues to INR60b and improve margins to 14% (vs 11.9% in FY14), in this period. Also, CRG booked one time gain of INR2.7b on sale of 8 surplus land at Kanjur (we understand total surplus land available at ~16 acres). We calculate CRG’s consumer business to have reported EPS of INR3.9 in FY14 and estimate at INR4.5 in FY15; at PER of 25-30x FY15E (HAVL at 28x FY15E), the possible value of the consumer business could be ~INR110-135/sh; of which 75% will be with CRG’s shareholders directly. Exhibit 10: Composition of Standalone EPS (INR/Sh, Calculated*)
FY11 FY12 FY13 FY14 FY15E FY16E FY17E
Consumer 3.4 3.1 3.2 3.9 4.5 5.2 6.2 Non-Consumer 7.4 4.8 3.7 4.4 4.3 5.7 8.4 Total 10.8 7.9 6.9 8.3 8.7 10.9 14.5
* Consumer EPS calculated assuming Segment EBIT = PBT and approx tax rate of 27% Source: MOSL, Company
37,0
20
34,8
60
35,1
40
39,0
00
44,5
55
42,5
64
41,4
10
42,0
60
41,8
40
37,9
90
43,1
80
39,7
00
39,7
30
35,8
50
36,5
80
35,3
50
35,0
80
33,1
50
36,8
30
35,7
40
32,2
00
37,2
75
41,1
00
50,3
10
51,9
40
50,4
80
53,2
60
54,5
20
57,7
30
61,0
10
57,0
80
59,2
80
55,7
40
51,5
80
3QFY
11
1QFY
12
3QFY
12
1QFY
13
3QFY
13
1QFY
14
3QFY
14
1QFY
15
3QFY
15
Subsidiary order book (INR m) Standalone order book (INR m)
15.1
17.1
9.8 13
.6
14.9
13.8
12.0
12.4
12.0
9.8 14
.4
7.9
10.7
9.7
10.9
11.0
10.6
9.8 14
.5
7.2 9.
0 19.1
15.2
15.2
13.3
10.5
20.0
10.0
14.6
15.5
15.2
18.1
14.1
13.4
3QFY
11
1QFY
12
3QFY
12
1QFY
13
3QFY
13
1QFY
14
3QFY
14
1QFY
15
3QFY
15
Standalone order intake (INR b)Overseas order intake (INR b)
3 February 2015 6
Crompton Greaves
Consumer business has witnessed strong growth rates led by improved reach, premium products CRG has expanded its reach in the consumer business to 134,000 retailers in the
distribution segment and 22,000 retailers in rural segment; by adding 11,150 retailers in FY14. Also, modern retail format was started, by setting up exclusive stores.
In Lighting, CRG was the first to launch an LED flat panel luminaire in the branded category, and gained a market share of 25% within the first quarter. New products accounted for 17% of total sale of lighting and 24% of luminaires in FY14.
In Fans, CRG’s market share has increased from lows of 21% in FY11 to 26.6% in FY14, which is quite substantial. New product launches accounted for 30% of the revenues; and several premium products were launched.
In Pumps, CRG’s market share increased 50bps to 13.6% in FY14. In the residential segment, the company improved its leadership position with market share of 27%.
Exhibit 11: CRG has outperformed industry growth rates in each of last three years FY12 FY13 FY14 Industry CRG Industry CRG Industry CRG Fans -2% 2% 15% 22% 10% 15% Lighting 12% 17% 12% 13% 2% 12% Pumps -8% -4% 6% 26% -10% flat
Source: MOSL, Company
Exhibit 12: Productwise revenues / Traded Goods (INR M)
Source: MOSL, Company
Exhibit 13: Ad-spend witnessing increased trend (INR M)
Source: MOSL, Company
Exhibit 14: Consumer business product-wise revenues (INR M)
FY09 FY10 FY11 FY12 FY13 FY14
Fans and Ventilation equipments 6,032 7,645 9,097 9,122 11,138 12,848
Electric Lamps 4,636 4,923 5,703 6,667 7,689 9,010
Power driven Pumps 2,794 3,854 5,217 5,019 5,869 5,790
Appliances 210 683 969 1,211 2,120 1,817
Total 13,672 17,105 20,986 22,019 26,816 29,465
Source: MOSL, Company
5,79
0
12,8
48
9,01
0
1,81
7
3,55
5
4,61
7
4,98
0
1,38
3
Power driven pumps
Electric fans and ventillation
equipments
Electric Lamps Appliances
Revenues (INR m) Cost of Purchase Goods (INR m)
156 211 256 227 345 474 691 766
1.61.9 1.9
1.41.7
2.2
2.7 2.7
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
Ad Spend (INR M) Ad (% of Consumer Rev)
3 February 2015 7
Crompton Greaves
Valuation and view CRG's journey to emerge as a 'Global Corporation' from India continues to face
multiple 'growth pangs'. Phase 1 of the restructuring program encompassing the European operations continues to face hurdles as Hungary plan incurs operating losses on execution of the transfer projects. Execution of transfer projects at Hungary and also the profitability of the Saudi / Canada transformer plant becomes the key monitorables.
We are maintaining standalone EPS estimates: FY15 INR8.2 (+1% YoY), FY16 INR10.5 (up 27%) and FY17 INR14.5 (up 31%); we have revised our consolidated earnings estimate downwards led by delay in turnaround of the overseas business. Our revised EPS stands at: FY15 INR3.9 (flat YoY), FY16 INR9.1 (+137% YoY) and FY17 INR14.5 (up 59%).
Promoter pledge has increased to 66% in Dec 2014 vs 54% in Dec 2013. Maintain Buy, with price target of INR275/sh (20x FY17 for standalone and 0.5x EV/ Revenues for overseas subsidiaries).
Exhibit 15: Change in Key Estimates (INR m)
Old Est. Revised Est. % change
FY15E FY16E FY15E FY16E FY15E FY16E Revenue 141,665 155,926 141,665 155,926 No change No change EBIDTA 7,523 10,691 6,905 9,698 (8.2) (9.3) EBIDTA Margin 5.3 6.9 4.9 6.2 (0.44)bps (0.64)bps Adjusted PAT 3,346 6,477 2,418 5,732 (27.7) (11.5) Adjusted PAT Margin 2.4 4.2 1.7 3.7 (0.65)bps (0.48)bps
Source: MOSL Estimates, Company
3 February 2015 8
Crompton Greaves
Corporate profile: Crompton Greaves
Exhibit 17: Shareholding pattern (%) Dec-14 Sep-14 Dec-13
Promoter 34.4 42.7 42.5
DII 30.9 24.7 23.8
FII 15.0 16.1 18.7
Others 19.7 16.5 15.0
Note: FII Includes depository receipts
Exhibit 18: Top holders Holder Name % Holding
HDFC Trustee Company Limited - HDFC Equity Fund 9.2
LIC of India 4.8
ICICI Prudential Dynamic Plan 4.1
Reliance Capital Trustee Co Ltd A/c Reliance Equity 3.4
HDFC Standard Life Insurance Company Ltd 2.2
Exhibit 19: Top management
Name Designation
Gautam Thapar Chairman
S M Trehan Vice Chairman
Laurent Demortier Managing Director & CEO
Exhibit 20: Directors Name Name
Gautam Thapar Meher Pudumjee*
S M Trehan Colette Lewiner*
Laurent Demortier Valentin Von Massow*
Shirish Apte* B Hariharan
Sanjay Labroo* Omkar Goswami
*Independent
Exhibit 21: Auditors
Name Type
Sharp & Tannan Statutory Ashwin Solanki & Associates Cost Auditor
Exhibit 22: MOSL forecast v/s consensus EPS
(INR) MOSL
forecast Consensus
forecast Variation
(%)
FY15
FY16
FY17
Company description Crompton Greaves is part of the USD4b Avantha Group, and is a global leader in the management and application of electrical energy. It has 15000 employees and operations across 85 countries globally. The company is organized into three business groups - Power Systems, Industrial Systems and Consumer Products.
Exhibit 8: Sensex rebased
100
130
160
190
220
250
Feb-14 May-14 Aug-14 Nov-14 Feb-15
Crompton Greaves Sensex - Rebased
3 February 2015 9
Crompton Greaves
Financials and valuations - Consolidated
Income statement (INR Million) Y/E March 2010 2011 2012 2013 2014 2015E 2016E 2017E Net Sales 91,409 100,051 112,486 120,944 134,806 141,665 155,926 179,790 Change (%) 4.6 9.5 12.4 7.5 11.5 5.1 10.1 15.3 Raw Materials 57,966 64,980 76,850 83,461 91,353 97,071 107,119 119,255 Staff Cost 11,131 11,811 14,662 17,405 19,521 19,514 20,064 20,630 Other Mfg. Expenses 9,542 9,822 12,937 16,247 17,113 18,175 19,046 25,860
EBITDA 12,770 13,438 8,036 3,832 6,820 6,905 9,698 14,045 % of Net Sales 14.0 13.4 7.1 3.2 5.1 4.9 6.2 7.8 Depreciation 1,551 1,936 2,600 2,029 2,621 2,659 2,731 2,862 Interest 428 352 567 955 1,366 793 447 417 Other Income 1,100 1,142 628 1,000 2,115 1,208 1,164 1,312 EO Items (as rep.) 352 -381 0 -1,207 0 0 0 0 PBT 12,243 11,910 5,497 640 4,947 4,661 7,684 12,077 Tax 3,650 3,100 1,821 1,009 2,361 2,282 2,029 3,039 Rate (%) 29.8 26.0 33.1 157.6 47.7 49.0 26.4 25.2 Reported PAT 8,593 8,810 3,676 -369 2,587 2,378 5,655 9,039 Extra-ordinary Inc.(net) 352 -381 0 -2,287 0 0 0 0 Adjusted PAT 8,241 9,191 3,676 1,918 2,587 2,378 5,655 9,039 Minority Int 6.0 76.5 59.9 7.3 -143.4 39.6 77.0 77.0 Consolidated PAT 8,247 9,268 3,736 1,927 2,443 2,418 5,732 9,116 Change (%) 47.3 12.4 -59.7 -48.4 26.8 -1.0 137.1 59.0
Balance Sheet (INR Million) Y/E March 2010 2011 2012 2013 2014E 2015E 2016E 2015E Share Capital 1,283 1,283 1,283 1,283 1,254 1,254 1,254 1,254 Reserves 23,760 31,464 34,826 34,332 35,192 36,899 41,460 48,855 Net Worth 25,043 32,747 36,109 35,615 36,446 38,152 42,714 50,108 Loans 5,010 3,955 9,849 18,515 21,930 20,270 18,259 16,937 Deffered Tax Liability 49 160 -122 -1,681 -1,532 -1,472 -1,413 -1,413 Minority Interest 43 157 157 95 118 118 118 118 Capital Employed 30,145 37,019 45,992 52,544 56,962 57,067 59,677 65,749
Gross Fixed Assets 29,858 37,805 44,087 53,424 59,233 59,865 60,057 61,442 Less: Depreciation 17,234 19,490 23,005 24,726 26,825 29,316 31,823 34,993 Net Fixed Assets 12,623 18,315 21,083 28,699 32,408 30,548 28,235 26,449 Capital WIP 1,137 1,102 1,493 1,965 2,184 2,713 5,667 8,167 Investments 5,536 6,747 7,864 7,907 2,989 6,368 9,940 15,423
Curr. Assets 41,018 45,646 55,343 59,807 69,168 68,396 72,310 82,150 Inventory 10,412 11,893 12,233 16,367 16,714 17,654 19,386 21,891 Debtors 21,463 25,427 31,432 31,605 35,913 37,572 40,698 46,217 Cash & Bank Balance 6,688 2,984 4,976 5,834 8,150 4,968 3,413 4,238 Loans & Advances 2,455 5,342 6,702 6,002 8,392 8,202 8,813 9,804
Current Liab. & Prov. 30,170 34,790 40,186 45,834 49,787 50,957 56,474 66,440 Creditors 16,098 18,585 21,076 24,618 27,737 27,883 31,010 36,379 Other Liabilities 10,469 12,148 15,319 16,994 17,985 18,869 20,983 25,120 Provisions 3,603 4,058 3,791 4,222 4,064 4,205 4,481 4,941 Net Current Assets 10,849 10,856 15,157 13,973 19,381 17,438 15,835 15,710 Application of Funds 30,145 37,020 45,993 52,544 56,961 57,067 59,677 65,749
3 February 2015 10
Crompton Greaves
Financials and valuations - Consolidated
Ratios Y/E March 2010 2011 2012 2013 2014E 2015E 2016E 2017E Standalone EPS 9.0 10.8 7.9 6.9 8.3 8.2 10.5 13.7 Consolidated EPS 13.1 14.8 6.0 3.1 3.9 3.9 9.1 14.5 Growth (%) 46.5 12.5 -59.7 -48.4 26.8 -1.0 137.1 59.0 Cash EPS 15.3 17.3 9.8 6.2 8.3 8.0 13.4 19.0 Book Value 39.0 51.0 56.3 55.5 58.2 60.9 68.2 79.9 DPS 1.3 2.2 1.4 1.2 0.8 1.4 1.8 2.3 Payout (incl. Div. Tax.) 15.3 23.7 20.7 20.1 11.3 20.0 20.0 20.0
Valuation (x)
P/E (standalone) 22.0 21.7 16.1 21.5 21.7 17.1 13.0 P/E (consolidated) 13.6 30.0 58.2 45.9 46.4 19.6 12.3 Cash P/E
18.4 13.9 18.4 18.3 14.8 11.6
EV/EBITDA
13.6 20.7 18.4 17.9 12.4 8.0 EV/Sales
1.0 0.7 0.9 0.9 0.8 0.6
Price/Book Value 5.1 3.0 2.0 3.1 2.9 2.6 2.2 Dividend Yield (%) 0.7 0.8 0.7 0.4 0.8 1.0 1.3
Profitability Ratios (%)
RoE 39.6 30.5 10.7 -1.0 7.2 6.4 14.0 19.5 RoCE 30.9 28.1 9.8 2.8 6.0 4.9 10.3 14.9
Turnover Ratios
Debtors (Days) 42 93 102 95 97 97 95 94 Inventory (Days) 42 43 40 49 45 45 45 44 Creditors. (Days) 64 68 68 74 75 72 73 74 Asset Turnover (x) 3.0 2.7 2.4 2.3 2.4 2.5 2.6 2.7
Leverage Ratio
Debt/Equity (x) 0 -0.1 0.0 0.2 0.4 0.3 0.2 0.0
Cash Flow Statement (INR Million) Y/E March 2010 2011 2012 2013 2014E 2015E 2016E 2017E PBT before EO Items 11,891 12,291 5,497 1,848 4,947 4,661 7,684 12,077 Add : Depreciation 1,551 1,936 2,600 2,029 2,621 2,659 2,731 2,862 Interest 428 352 567 955 1,366 793 447 417 Less : Direct Taxes Paid 3,650 3,100 2,495 2,177 2,211 2,223 1,970 3,039 (Inc)/Dec in WC -125 -3,715 -2,310 2,046 -3,092 -1,239 48 950 CF from Operations 10,094 7,765 3,859 4,701 3,631 4,651 8,940 13,269
EO Income 352 -381 0 -1,207 0 0 0 0 CF from Oper. incl. EO Items 10,446 7,384 3,859 3,494 3,631 4,651 8,940 13,269
(Inc)/Dec in FA -1,526 -7,593 -5,758 -10,117 -6,550 -1,330 -3,372 -3,577 (Pur)/Sale of Investments -3,864 -1,211 -1,117 -43 4,919 -3,379 -3,572 -5,483 CF from Investments -5,389 -8,805 -6,875 -10,160 -1,631 -4,708 -6,944 -9,060
(Inc)/Dec in Net Worth -481 767 725 709 -1,147 362 219 77 (Inc)/Dec in Debt -2,173 -1,055 5,894 8,666 3,415 -1,661 -2,011 -1,322 Less : Interest Paid 428 352 567 955 1,366 793 447 417 Dividend Paid 944 1,644 1,044 897 587 1,033 1,312 1,721 CF from Fin. Activity -4,025 -2,284 5,008 7,524 316 -3,125 -3,551 -3,384
Inc/Dec of Cash 1,032 -3,705 1,992 857 2,316 -3,182 -1,554 825 Add: Beginning Balance 5,656 6,688 2,984 4,976 5,834 8,150 4,968 3,413 Closing Balance 6,688 2,988 4,981 5,833 8,150 4,967 3,413 4,238
3 February 2015 11
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N O T E S
3 February 2015 12
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