Goldman Sachs View on Crompton Greaves

Goldman Sachs has upgraded Crompton Greaves to buy from neutral and has raised its target price to Rs 155 from Rs 120, citing better prospects of domestic orders and margins. 

The investment bank says the company would benefit from the balance sheet restructuring of state electricity boards and power sector reforms as over 25% of its revenues are driven by domestic power transmission and distribution capex. The investment bank also said that the company is trading at attractive valuations.

Buy Crompton Greaves

Crompton Greaves had fallen more than 25% on huge volumes in just 2 trading sessions from Rs. 242 on 18th July to Rs. 178 on account of poor quarterly numbers and seems to be technically oversold. The RSI indicator had fallen below 20 levels which suggest that there might be a bounce back in the counter any time soon.

Crompton Greaves Q1 2011-2012 Result Analysis

Crompton Greaves today reported a 58% drop in Q1 net profit at Rs 79 crore for Q1FY12, against Rs 191 crore in the corresponding quarter of previous fiscal. Analyst expected a net profit of Rs 202 crore for June 2011 quarter. However net sales grew marginally by 6% to Rs 2,438 crore from Rs 2,302 crore during the recently concluded quarter. 

Buy Crompton Greaves - Recommends Prubhudas Liladhar

Prabhudas Lilladher is bullish on Crompton Greaves (CG) and has recommended accumulate rating on the stock with a target of Rs 304 in its April 29, 2011 research report.

The current market price of the stock is 250. The stock is currently trading at 15.5x and 13.3x its FY12 and FY13 estimated earnings, respectively.

Download the full report from the below link

 

http://www.moneycontrol.com/news_html_files/news_attachment/2011/Crompton_Greaves_PL_020511.pdf