Crompton Greaves profit up 6.5%, to list consumer biz by next July

Crompton Greaves reported 6.5% growth in consolidated net profit in first quarter 2015 over same period last year. However the company's international business continues to report loss.

Net profit grew to Rs 64 crore in Q1 2015 over same period in previous year while revenue was up 7.7% to Rs 3441 crore. Power systems business which contributes about 60% to the topline grew both in revenue and profit while industrial systems business reported a fall in revenue and profit.

Last month the company announced it will demerge and list its consumer products business (contributes about 20% of revenue) for "better growth opportunities." At the annual general meeting in Mumbai on Tuesday Crompton Greaves chairman Gautam Thapar said the listing of consumer products business, which manufactures fans and lighting appliances, will be done by next July. He told the share holders that the consumer product business is expected to earn about Rs 3500 crore revenue current fiscal up from over Rs 2800 crore last fiscal.

Thapar said CG was restructuring its business and will sell its non core assets to fund operations and also cautioned share holders of the challenges in international business following merger of General Electric-Alstom. Asked about the sale of land parcel in Kanjur Marg Thapar said company will sell the land if it gets a good valuation.

International business contributes about 45% of the revenue and the company management is expecting a turnaround in FY 2015. The company has restructured its European operations and is aiming to improve profitability of its US and Canadian business units. "The first quarter results show recovery will be slow and growth may happen in second half,'' an analyst remarked.