– Mixed set of earnings for Crompton Greaves Consumer Electrical
– Weakness in lighting division dragged CG’s bottom line
– Scope for growth as penetration levels are low in consumer durables
– CGCE appears reasonably valued at 30 times FY20 estimated earnings
Consumer durable company Crompton Greaves Consumer Electrical (CGCE) reported a mixed set of financials in Q3 FY19. While topline growth was steady the operating performance was weaker as margin was impacted by higher commodity prices and increase in selling and distribution expenditures. Despite a lack lustre quarterly performance, the company continue to expand their distribution network and are gaining market across product categories.
CGCE: Growth led by electrical consumer durables segment
CGCE’s Q3 revenue increased 10 percent year-on-year (YoY) to Rs 1,030 crore. Growth in earnings before interest, tax, depreciation and amortisation (EBITDA) was slower at 8 percent as margin came in softer at 12.2 percent. Higher other income and decline in finance costs aided the profit after tax, which increased 15 percent YoY.
Electrical consumer durables drove overall topline growth. Higher contribution from fans, geysers and pumps aided quarterly revenue. Change in product mix led to an around 50 bps expansion in segment margin for the quarter gone by.
Performance of the lighting & fixtures segment was subdued as revenue for the segment came in two percent lower. Price erosion in the LED business and absence of Energy Efficiency Services (EESL) orders from municipality and government entities impacted top line. Margin continued to remain under pressure YoY, but showed some improvement on a sequential basis.
The company continues to focus on driving profitability through new product launches and rationalisation of its cost structure. The increase in employee expenses (up three percent) and other operating expenses (up four percent) was much lower in comparison to sales growth.
JUST LOOK AT MIRZA.. SEEMS IN CONSOLIDATION PHASE.
BOOK VALUE OF 42.76 PROMOTERS INCREASED THEIR HOLDING TO 74% IS A GREAT SIGN OF CONFIDENCE OF PROMOTERS AND STOCK DOING GOOD IN BUSINESS.
I SEE THIS STOCK TO MOVE TOWARDS 200 IN NEXT THREE MONTHS.
THIS WOULD BE A VERY GOOD WEALTH CREATOR.
This is what was my conviction.. I knew this great stock is poised towards 200 …
THE GST AND INDIAN STOCK MARKET
Our Govt. put all speculations to rest recently when it announced that GST shall be implemented effective JUL. 01st, 2017, all infrastructure is ready and same shall be launched in midnight as we tasted our independence way back in 1947.
The biggest reform in taxation and removing of cascading effect of various taxes such as excise duty, service tax, VAT etc. happen in this new GOVT.’s regime and must be considered as biggest reform since 1947. The GST shall be effective JUL. 10st, 2017 and looks like GOVT. is quite prepared, though a few initial hiccups may happen.
The GST shall be levied on manufacture, sales as well consumption of goods and services and will lead to economic integration of our country.
The Idea is simple- one country and one tax structure across all states and this will remove the indirect tax system which is not only quite complicated but also gives ways of corruption and tax evasion.
The organized sector is expected to be the major beneficiary specially in those sectors where unorganized industries enjoy a large market share due to various reasons including tax evasion… Read more
Narayana Hrudayalaya Ltd a great company came to public just three years back and is doing very good. NH has chain of hospitals and clinical pathology and is doing very well in the sector. The NH is promoted by DR DEVI SHETTY in 2000 and they came to public thru IPO in 2015 with pricing of INR 250, which after listing got opened for 337.00…. Read more
This share is available for 77.00 with a book value of 19 and face value of INR 10, thus effective price of the share is about INR 58. The PE ratio ….. Read more
On 21st May, I had mentioned about MIRZA INTERNATIONAL followed by an UPDATE on 28th MAY 2017. Now further updates are as follows… Read more
The DB Corp is into the business of newspaper, print media as well broadcasting. The Dainik Bhaskar is a low priced quite popular hindi daily where as they have Gujrati and Marathi editions too with different names having a reasonable market share. The market share is growing and their advertisement income also…. Read more
Visaka Industries established in 1981 commenced manufacture of corrugated cement fiber sheets in 1985 with an initial production capacity of 36,000 tons per year at Patancheru, Telangana.
The company diversified into manufacturing Synthetic Yarn in 1992. Visaka opted for the latest Airjet spinning technology as a challenge & successfully established the factory in Nagpur to produce about 2000 tons of man-made yarns per annum……