CG Power

The comany was expected to post better numbers and it did not disappoint with its Q3FY14 numbers. It reported a consolidated net profit of Rs.62 crore v/s net loss of Rs.189 crore in previous Q3; sequentially, it has risen 7%. This was led by a 13% (YoY) and up 4% (QoQ) growth in net revenue at Rs.3352 crore. Operating costs have risen, led by rise in raw material costs and employee benefits expenses.

The good part about the numbers is that two of main segments have done well. Power systems, which contributed 63% to the total revenue earned, showed a 17% (YoY) growth in topline and EBIT was at Rs.53 crore compared to a loss in previous quarter. This turnaround in power systems is what helped the company post better numbers. Consumer Products showed a 7% growth in revenue and EBIT rose 21%, in fact its contribution to the profit was highest amongst all, much better than power too. On the other hand, industrial systems showed a major 43% slump in EBIT. The fall in the losses of its international operations is what led to the company improve its numbers. Net profit at end of 9MFY14 was pretty impressive at Rs.180 crore compared to loss of Rs.36 crore in FY13. Yes, Crompton seems to have truly turned the corner.