Crompton Greaves double bottom?

Stock Opportunities
1

Hi Hiteshbhai,

Could you confirm has Crompton Greaves double bottomed out?

Thanks


2

hi

yes double bottom formation seems to have happened.

Now we need to see if on pull back the support zone of 124-130 holds or not.

3

One more analysis from State of the Market- Deepak Singh

Crompton Greaves above 200 dma


Source: Chartalert.com

As you can see in the chart above: Crompton Greaves stock recently broke out above 200 dma and since than has sustained above ita.opportunity? Doubtsa

Tony

4

charts are okay. doubts are about management. so if it is a trading bet then its okay. investment then no.

5

It is a trading short term bet.

6

It’s trading bet for me too. What could be the possible target?

7

targets are achieved by calculating the distance between the first bottom and first peak and then adding it to the breakout point.

I think it could be 130+30 =160 or so.

8
Represented by Laurent Demortier, CEO & MD of the company.Key takeaways of the conference call by Capital Mkt;

Order intake of overall power systems business for H1FY15 was up by 9.8% to Rs 4308 crore and that of industrial was up by 4.8% to Rs 1098 crore.For quarter Order intake of CG India was Rs 1100 crore (PS â Rs 627 crore; Indl â Rs 473 crore) and that of non India was Rs 1405 crore (PS â Rs 1297 crore; Indl â Rs 108 crore) with overall being Rs 2505 crore (PS â Rs 1924 crore; Indl â Rs 581 crore).Order backlog as end of Sep 2014 of CG India stood at Rs 3535 crore (PS â Rs 2978 crore; Indl â Rs 557crroe) and that of non India was Rs 5573 crore (PS â Rs 5381 crore; Indl â Rs 192 crore) with overall being Rs 9108 crore (PS â Rs 8359 crore; Indl â Rs 749 crore).

The company looks to monetize non productive assets. As part of this the company has signed definite agreement to sell 8 acres of surplus land at Kanjurmarg to Evie Real Estate for Rs 302.26 crore. These 8 acres of land is freed as the company realigned its operations at Kanjurmarg. The transformer factory operates on 10 acres plant still now. The company is evaluating is assets across to globe and will monetize the non productive assets at right time.

The consumer products business is demerged into Crompton Consumer Products (CCPL) where the company will hold 25% plus one share. The existing shareholders of CG will get 3 shares of CCPL for every 4 shares held in CG. The scheme will come into effect from the appointed date of April 1, 2015 subject to receipt of all regulatory approvals.Since CG's non consumer products business is technology driven with global presence and consumer durables is brand driven with 100% Indian operations the demerger will make both the companies agile and respond better to market demands in terms of focus, strategy and infrastructure and process. Both will have specialized board and management and moreover the demerger will simplify the organization structure.The demerger process is initiated as the consumer product business has attained critical size where it could sustain by its own and the CG's non consumer business has completed its integration of acquisitions and captured synergies.

By FY2018 the CCPL will look to double its STO from about Rs 3000 crore in FY14 with 14% EBITD margin. Similarly the CGL looks at a revenue of Rs 14000 crore with EBITDA margin of 6-7%.By Q2FY15 there were signs of recovery outside India especially in Europe The Belgium and Hungary plant are quite well loaded. Profitability will increase with execution of long cycle large orders which come with good margin.For Indian operations there are some signs of revival in industrial capex especially in Railways and couple of other industries which resulted in growth in order intake in Q2FY15 for industrial products. For India power systems business PGCIL continue to be the critical consumer and there are lot of projects tenders going on. The traction in export order is largely due to growth in Middle East and Africa, where the company has entered new geographies, which used to be the traditional markets of European players.

The company is to reduce its focus on Brazil and it has already aborted its investment plants. The company currently has orders worth Euro 15 million in Brazil which will be taking about a year to complete. The loss of Brazil subsidiary is due to this old projects. But the company continues to focus on other Latin American countries.
9

Co rep by Laurent Demortier, CEO & MD.Key takeaways of the call by Capital Mkt;

Third quarter is a weak quarter especially in Indian market; it will rebound in Q4FY15 atleast in terms of orders and execution/sales.

Order Book as end of Dec 2014
India Non India Total
Power Systems 2985 4971 7956
Industrial Systems 523 187 710
Total 3508 5158 8666
Figures in Rs crore

Order Intake for Q3FY15
India Non India Total
Power Systems 666 1258 1924
Industrial Systems 395 83 478
Total 1061 1341 2402
Figures in Rs crore

In Europe the Belgium operation is now profitable but Hungary is the only gap for the company. In Q3FY15 on one of the large order (24 transformers in one lot) valued Euro 17 million bagged by CG Electric Systems Hungary, the company has recognized an additional cost of Rs 64 crore. This has majorly impacted the profit of Hungary operations.

The Hungary plant is now cost competitive but the legacy projects are the drag on profitability. Legacy order book of Hungary plant is currently at about Euro 20 million. The margins of fresh orders from Europe are improving. The Hungary plant has to reach an STO of Euro 70 million to return to profit.

Power system exports from CG India in Q3FY15 was lower at about Rs 134 crore compared to Rs 263 crore in the corresponding previous period. This is largely due to delay in shipments. Though exports sales declined the power systems exports order backlog increased to Rs 970 crore as end of Dec 2014 compared to Rs 761 crore as end of Dec 2013.EO of Rs 268 crore is net of Rs 278.15 crore of profit from sale of Kanjurmarg land in Mumbai and VRS compensation of Rs 10.61 crore. No tax implication on this one-off profit.

Some pick up in the railway orders in January 2015. Industrial capex still subdued. Expects the Q4FY15 to be better interms of order for industrial systems.

Sales of automation in Q3FY15 and 9mFY15 are Rs 259 crore and Rs 629 crore respectively.Of International sales about 35% comes from MEA, 31% Europe, 20% ASIAPAC and balance Americas.