Crompton Greaves Consumer Electricals has registered 37% growth in PAT for the quarter ended March 2019 to Rs 141.67 crore even while its sales was up by 7% to Rs 1206.88 crore and operating profit stand higher by just 2% to Rs 168.54 crore. Strong growth in PAT despite just a modest growth at operating level was largely due to lower taxation.

• Revenue was up by 7% to Rs 1206.88 crore driven largely by higher electrical consumer durable (ECD) segment revenue. While segment revenue of ECD was up by 10% to Rs 864.36 crore (or 72% of sales) that of lighting & fixtures (L&F) was up by marginal 1% to Rs 342.52 crore (or 28% of sales).
• The EBIT was flat (up 0%) at Rs 207.72 crore with segment margin contract by 130 bps to 17.2%. Segment profit of ECD despite higher sales was lower by 2% to Rs 168.46 crore hurt by 220 bps decline in segment margin to 19.5%. However despite marginal fall in revenue, the segment profit of L&F was up by 5% to Rs 39.26 crore with its segment margin expand by 40 bps to 11.5%.
• Operating profit margin contracted by 60 bps to 14.0%. Thus hit by lower OPM, the operating profit was up by just 2% to Rs 168.54 crore largely on higher sales. Lower OPM is largely due to higher material and staff cost. The material cost net of stocks and excise was up by 60 bps to 23.2%. And the staff cost was up by 10 bps to 6.3%. The cost of traded goods was flat at 45.9%. Though OE was down by 10 bps to 10.6% that is not good enough to offset the rise in material and staff cost. Thus driven by higher sales, the operating profit was up by 2%.
• Other income was up by 58% to Rs 17.21 crore. The interest cost was down by 11% to Rs 14.32 crore and depreciation was up by 7% to Rs 3.30 crore. And thus the PBT (before EO) was up by 8% to Rs 168.13 crore.
• EO expense for the quarter as wells as corresponding previous period was nil. Thus the PBT after EO was up by 8% to Rs 168.13 crore.
• Taxation net of deferred tax was down by 50% to Rs 26.46 crore and the tax rate was lower at 15.7% compared to 33.9% in corresponding previous period. Thus growth at PAT restricted at 37% to Rs 141.67 crore. Based on an assessment order received during the year ended March 31, 2019, the company has written back an amount of Rs 28.45 crore in respect of earlier assessment year and the same is netted off from current tax expense for the quarter ended March 2019.
• Other comprehensive income was down by 92% to Rs 0.40 crore. Thus the total comprehensive income was up by 32% to Rs 142.07 crore.

Yearly performance

Sales were up by 10% to Rs 4478.91 crore. Higher sales with 10 bps expansion in OPM facilitated 10% growth in operating profit to Rs 585.79 crore. After accounting for higher other income, lower interest and higher depreciation the PBT before EO was up by 16% to Rs 561.56 crore. The EO item for the period and corresponding previous period was nil. Thus the PBT after EO was up by 16% to Rs 561.56 crore. Taxation was down by 2% to Rs 159.04 crore and thus the PAT was up by 24% to Rs 402.52 crore.

Based on an assessment order received during the year ended March 31, 2019, the company has written back an amount of Rs 28.45 crore in respect of earlier assessment year and the same is netted off from current tax expense for the year ended March 2019.

Segment profit of ECD was up by 15% (to Rs 616.15 crore) gained by higher sales (up 14% to Rs 3213.57 crore) as well as 30 bps expansion in segment margin to 19.2%. However the segment profit of L&F was down by 27% to Rs 106.87 crore hit by lower sales (down 1% to RS 1265.34 crore) and 310 bps fall in segment margin to 8.4%.

Crompton Greaves Consumer Electricals : Standalone Results

Crompton Greaves Consumer Electricals : Segment results