Crompton Greaves drops on margin worries

CROMPTON-GREAVES-DROPS-ON-MARGIN-WORRIES:Crompton Greaves drops on margin worries

 

Reuters Market Eye - Shares in Crompton Greaves fall 7.3 percent after saying April-June net profit rose 8 percent to 859 million rupees, missing expectations and raising worries about whether the power equipment maker can meet its yearly guidance.

Macquarie downgrades the stock to "underperform" from "neutral", despite calling Crompton Greaves' orderbooks "robust," citing concerns about margins and uncertainty for the company's overseas businesses.

Morgan Stanley cites similar concerns about margins, while also expressing concerns over operational restructuring and "unattractive" valuations in maintaining the stock at "underweight."

Crompton Greaves on Friday reiterated its guidance for 12-14 percent revenue growth and 8-9 percent margins for fiscal 2012-13.