India`s Crompton Greaves posts profit fall as costs, labour law charge bite
India's Crompton Greaves Consumer Electricals reported a 10.5% fall in quarterly profit on Friday, hit by higher advertising spending and a one-time charge linked to the country's new labour codes.
Consolidated net profit came in at 983.1 million rupees ($10.8 million) for the quarter ended December 31, compared to 1.10 billion rupees a year earlier, according to an exchange filing. Total expenses climbed about 8%.
Revenue rose 7.3% to 18.98 billion rupees.
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KEY CONTEXT
Crompton Greaves booked a one-off charge of 200.4 million rupees linked to the new labour codes, which have shaved millions off corporate India's earnings for the third quarter.
It has also been spending heavily to turn around its kitchen appliances brand Butterfly, which includes items such as blenders and cookers, by pumping money into marketing and improving distribution.
Appliance makers in India, from AC maker Voltas to Crompton Greaves, are battling higher metal prices, prompting some of them to raise prices to protect their bottomlines.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 months) Analysts' sentiment
months)
RIC PE EV/EBIT Price/S Revenue Profit growth Mean # of Stock to Div
DA ales growth rating* analysts price yield
target** (%)
Crompton Greaves 25.07 16.07 1.74 11.83 22.34 Buy 32 0.67 1.23
Consumer Electricals
Ltd
Havells India Ltd 44.15 29.17 3.19 15.47 24.17 Buy 25 0.82 0.74
Voltas Ltd 48.92 37.64 2.67 17.22 51.16 Hold 37 1.01 0.49
TTK Prestige Ltd 35.20 22.31 - 10.06 26.97 Hold 4 0.84 1.08
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
-- All data from LSEG -- $1 = 90.6710 Indian rupees
