About The Company
Greaves Cotton Limited, established in 1859, is one of India’s leading and well-diversified engineering companies. It manufactures a wide range of industrial products to meet the requirement of core sectors in India and abroad. The company’s core competencies are in Diesel/Petrol engines, Gensets, Agro Equipments and Construction Equipments.About The Results
Greaves Cotton has posted disappointing results for third quarter, ending 31st March 09, with sales falling to Rs.262 crores against Rs.339 crores of corresponding quarter in the previous year. If we look to the total income of Rs.888 crores for nine months ending March 09, it is less than 30% for the quarter.
Situation on the profitability front is more precarious as its EBITDA fell to Rs.19.68 crores for the quarter against Rs.38.56 crores. Even this is less than 28% of Rs.70.57 crores, earned for 9 month ending 31st March 09. With sharp decline in interest and tax during the quarter, still PAT for the quarter is just at Rs.14.37 crores against Rs.30.46 crores. This is exactly 33.60% of nine month PAT of Rs.42.75 crores.
EPS of the company for 9 month is at Rs.8.75 which is likely to be at Rs.11.50 for the year ending 30th June 09. The current price of Rs.84 discounts it by about 7 times. In the present scenario, Cummins India is ruling at Rs.208 which discounts it FY 09 EPS of Rs.23, by about 9 times. This company has topline of close to Rs.3,000 crores, per annum.
About The Stock
The falling trend of profitability suggest that an exit at this point of time is essential to avoid further loss.
Related posts: