Equity Alert: Crompton Greaves gains 3% as Q4 net up 47.4% on year

[K.Karthik Raja]

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Equity Alert: Crompton Greaves gains 3% as Q4 net up 47.4% on year
MUMBAI--12:15PM-- Shares of Crompton Greaves gained nearly 3% to
239 rupees
on volume of 562,275 shares on robust Jan-Mar earnings, detailed after
trading hours Friday.
The company reported a net profit of 1.03 bln rupees in the fourth
quarter of 2007-08 (Apr-Mar), up 47.4% on year. Net sales in the
quarter rose
17.1% to 11.59 bln rupees.
Edelweiss Securities said in a report the revenue was in line with
estimates, however, net profit was higher than expected.
"However, we believe margins at FY08 levels are unsustainable over
the
medium- to long-term due to an increase in raw material prices.
Further
increase in competition is likely to limit margin upside," the
Edelweiss
report said.
Edelweiss has downgraded profit estimates for 2008-09 and 2009-10,
but
maintains a positive outlook on the stock, with a "buy" recommendation
that
represents expectations the share will appreciate more than 20% over a
12-month period.
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