Crompton Greaves Disappoints

Net profit for the second half was a paltry Rs 14.71 crore on sales of Rs 895.88 crore. For the full year, net profit declined 51.96 per cent to Rs 30.76 crore and the operating profit margins dipped to 8.72 per cent from 9.68 per cent.

Sales of the company increased marginally by 1.8 per cent to Rs 1508.81 crore - a sharp fall from the growth rate of 37.3 per cent in the previous year ending March 1996. This is attributed to the slow down in the electrical equipment industry because there were few new power projects taken up in the current year.

 

However, the company could maintain the level of export sales at Rs 159 crore.

Other income of the company has dropped by 42.67 per cent to Rs 8.88 crore.

Interest burden of the company increased by 34.84 per cent to Rs 77.63 crore. Due to this, the gross profit dipped by 37.95 per cent to Rs 62.89 crore.

Depreciation has also increased considerably by 50.7 per cent to Rs 50.70 crore. After writing back the excess tax provision of Rs 3.5 crore for previous years, the company had a zero tax liability.

The expansion of equity further affected the earnings per share of the company.

The paid-up capital increased by 14.65 per cent to Rs 52.04 crore. The GDR issue of the company in July 1996 led to an increase in the equity by Rs 6.6 crore.

The companys equity expanded further by Rs 0.03 crore on amalgamation of Lumino Lamps.

The share price of the company clearly indicates that the market had anticipated bad performance from the company.

The share price has dropped by more than 65 per cent from Rs 240 in July 1996 to the current market price of Rs 85.

Things are unlikly to look up for the electrical equipment industry in the immediate future. The scrip may remain subdued for some time.