Crompton Greaves net more than halves; shares slump

Crompton Greaves net more than halves; shares slump

Mumbai: Crompton Greaves Tuesday said its April-June net profit more than halved, sending shares down more than 15%, the steepest fall in the past 27 months.

The Gautam Thapar-led Avantha Group firm posted a fall in April-June consolidated net profit by 58.6% to 79 crore on muted revenue growth and higher raw material costs. Its net sales grew 6% to 2,438 crore.

“Margins have declined for them, but the consumer products segment grew only by 2%. That is of more concern to me," said an analyst who wished not to be named as he is not authorised to speak to media.

The revenue for the consumer products segment, that traditionally contributes highest share of the firm’s operational profit, grew less-than that of power systems and industrial systems, a company statement showed.

“(The) consumer products segment was doing really well over many quarters compared to all other segments which were anyways not doing well," the analyst quoted earlier said.

Raw material costs for the firm have gone up by 35% during the quarter to 1,610 crore.

The full year revenue for the firm in 2011/12 is expected to be 11,550 crore, according to StarMine SmartEstimate, which is 15% higher than its reported revenue in FY11.

Crompton, a power equipment manufacturer and electrical appliance maker, is likely to clock revenue growth between 13%-16% in FY12, Sudhir Trehan, the then managing director of the firm, had said in April.

Shares in Crompton Greaves, which is valued by the market at $3.5 billion, closed 14.03% lower at 208.30 in a firm Mumbai market.