CG Power

The company posted a set of flattish numbers for Q1FY15, with consolidated net profit coming in at Rs.64 crore, which is same as that posted in Q4 and 6% higher compared to previous Q1 where it stood at Rs.60 crore. This YoY rise in net profit was despite a 9% (YoY) fall in net sales at Rs.3441. By maintaining operating costs at 97% of net revenue, the company managed to boost its bottomline. Tax out go was pretty steep at Rs.55 crore v/s Rs.46 crore in previous Q1 and interest outgo was at Rs.24 crore, up from Rs.20 crore.

The good part about the numbers is that two of main segments have done well. Power systems, which contributed 59% to the total revenue earned, showed a 10% (YoY) growth in topline while EBIT margin improved from 1.48% to 1.78%. Consumer Products showed a 7% growth in revenue and EBIT margin rose to 12.66% from 11.69%. In fact its contribution to the profit was highest amongst all, much better than power too. On the other hand, industrial systems showed a 2% drop in revenue and EBIT margin too slipped from 8.22% to 6.85%. the company has mooted a plan to demerge its Consumer Products business into a separate entity which will go on to get listed on the bourses too. This will get the company much higher valuation.