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Crompton Greaves

Crompton Greaves : Crompton Greaves' (CGL) third quarter numbers are largely in line with expectations.
The company has been guiding towards a 20% plus growth on domestic as well as international front. The power segment revenues rose 20% yoy to Rs 5.7 bn.
The main client segment for this division is the utilities sector including PGCIL. PGCIL has plans to spend Rs80 bn in FY09 up from Rs 65 bn in FY08. We expect healthy growth to sustain in Power division.
Consolidated profits up 49% yoy but flat sequentially.EBITDA margins stable for CGL as well as its overseas subsidiaries.Maintain earnings in view of in-line results.
Industrial growth has slackened further since the third quarter raising downside risk to FY10 earnings.
Maintain Accumulate given slowdown in domestic industrial production.Overseas subsidiaries also face pressure as the Euro Zone has been slowing down.
ACCUMULATE with a price target of Rs 187 based on DCF.