3 September 2014
Update | Sector: Capital Goods
Crompton Greaves
BSE Sensex
27,019
S&P CNX
8,083
CMP: INR203
TP: INR271
Buy
Riding a New Mustang
Consumer business demerger to unlock value; several triggers exist
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
CRG IN
626.7
219/80
0/23/90
126.9
2.1
Consumer demerger to unlock value, provide strategic possibilities
CRG has proposed the demerger of the consumer business into a separate listed
company. The Committee of Directors was to examine all relevant aspects and
make suitable recommendations to the Board; and we expect the process to be
completed shortly. We believe that the transaction will unlock significant value,
and also opens up strategic possibilities to accelerate growth.
Over the last 3 years, CRG has consistently reported above industry average
growth rates in each of the key product segments. For instance, in Fans, CRG’s
market share increased substantially from lows of 21% in FY11 to 26.6% in FY14
given the improved reach, launch of premium products, etc.
We calculate CRG’s consumer business to have reported EPS of INR3.9 in FY14
and estimate at INR4.5 in FY15; at benchmark PER of 25-30x FY15E (HAVL
quotes at 31x FY15E), the possible value of the consumer business could be
~INR110-135/sh. The management recently stated that the medium term EBIT
margin target for the consumer business is 15% (vs 11.9% in FY14).
Financial Snapshot (INR b)
Y/E Mar
2015E 2016E 2017E
Net Sales
144.2 163.7 188.8
EBITDA
Adj PAT
EPS (INR)
Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
8.9
3.9
6.4
53
53
11.4
11.0
31.9
3.9
12.6
7.4
11.8
86
62
20.4
17.4
17.2
3.3
16.3
10.5
16.8
42
76
24.1
21.6
12.1
2.7
Leveraging Indian Manufacturing: expect traction in FY15/16
CRG has been positioning to leverage the Indian manufacturing through
increased exports, particularly in Power products (transformers from
Kanjurmarg, GIS / RMUs / Circuit Breakers from Nashik, Automation products
from Bangalore) and HT Motors / Drives (factories commissioned in July 2013).
During FY14, while the exports (including deemed exports) increased 12% YoY,
FOB exports were up sharply at 19% YoY. Several of the new product launches
in industrial and switchgears require pre-qualifications, leading to a time-lag
and thus, we expect a meaningful ramp up in exports in FY15/FY16.
Shareholding pattern % (Mar-14)
Jun-14 Mar-14 Jun-13
Promoter 42.7
DII
FII
Others
22.2
20.1
15.0
42.7
23.2
19.5
14.6
41.7
23.7
15.5
19.1
Stock Performance (1-year)
Crompton Greaves
Sensex - Rebased
250
200
150
100
50
Switchgears / Traction Electronics are key growth drivers
For CRG, switchgear revenues have increased by 15% YoY in FY14, largely led by
strong traction in RMUs. In FY14, GIS capacity at Hungary / Nashik has been
nearly doubled. Another important achievement has been the successful PQ
from PGCIL for 765kva Circuit Breakers, and should increase the
competitiveness in terms of bidding for system projects in India. Commissioning
of the circuit breaker plant in Indonesia (51% JV with PLNE) and the existing
capacity in Brazil should drive increased exports from Nashik. We expect the
contribution of switchgears / traction electronics to increase from ~10% of
consolidated power segment revenues to ~16-18% in the next 2-3 years.
Satyam Agarwal
(AgarwalS@MotilalOswal.com); +91 22 3982 5410
Amit Shah
(Amit.Shah@MotilalOswal.com)
/ Nirav Vasa
(Nirav.Vasa@MotilalOswal.com)
Investors are advised to refer through disclosures made at the end of the Research Report.

Crompton Greaves
Automation business: high operating leverage, 50%+ margins
In smart meters, CRG participated in 10 Advanced Metering Infrastructure (AMI)
projects in Europe, Asia and America. The most significant achievement was to
secure the technical pre-qualification to participate in the ERDF Linky project for
the deployment of smart meters in France. ZIV has recently been awarded
contracts with a total of more than 2m meters. We understand that the
automation business has a gross margin of ~50%+; and thus as these projects
get executed in 2HFY15, margins in overseas business should report a
noticeable increase.
Valuations and view, Maintain Buy
CRG's journey to emerge as a 'global corporation' from India continues to face
multiple 'growth pangs'. Phase 1 of the restructuring program, encompassing
the European operations had been largely completed; and the business
reported EBIDTA breakeven in FY14. There had been initial successes in
strategic areas like geography expansion, moving up the value chain, widening
the production footprint, etc. Thus, FY15/FY16 should witness the gains of the
fructification of these efforts over the last two years. Demerger of the
consumer business will unlock shareholder value. Maintain
Buy,
with a revised
Price target of INR271/sh (standalone business at 22x FY16E, overseas at 0.5x
EV/Sales).
CRG: PER Band Chart (x)
60
45
30
15
0
21.9
5.3
22.5
PE (x)
Peak(x)
Avg(x)
Min(x)
49.5
CRG PB Chart (x)
12.0
9.0
6.0
3.0
0.0
4.5
1.4
3.4
PB (x)
Peak(x)
Avg(x)
Min(x)
10.3
Source: MOSL, Company
Source: MOSL, Company
3 September 2014
2

Crompton Greaves
Consumer demerger: unlock value, strategic possibilities
CRG has proposed the demerger of the consumer business into a separate listed
company, with the intent to allow the businesses to pursue more ambitious growth.
The Committee of Directors was to examine all relevant aspects of the process of
demerger and listing and make suitable recommendations to the Board; and we
expect the process to be completed shortly. We believe that the transaction will
unlock significant value; and also opens up strategic possibilities.
We calculate CRG’s consumer business to have reported EPS of INR3.9 in FY14 and
estimate at INR4.5 in FY15; at PER of 25-30x FY15E (HAVL at 31x FY15E), the possible
value of the consumer business could be ~INR110-135/sh.
Composition of Standalone EPS (INR/Sh, Calculated*)
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
Consumer
3.4
3.1
3.2
3.9
4.5
5.2
6.2
Non-Consumer
7.4
4.8
3.7
4.4
4.3
5.7
8.4
Total
10.8
7.9
6.9
8.3
8.7
10.9
14.5
* Consumer EPS calculated assuming Segment EBIT = PBT and approx tax rate of 27%
Source: MOSL, Company
Consumer business has witnessed strong growth rates led by improved
reach, premium products
CRG has expanded its reach in the consumer business to 134,000 retailers in the
distribution segment and 22,000 retailers in rural segment; by adding 11,150
retailers in FY14. Also, modern retail format was started, by setting up exclusive
stores.
In
Lighting,
CRG was the first to launch an LED flat panel luminaire in the
branded category, and gained a market share of 25% within the first quarter.
New products accounted for 17% of total sale of lighting and 24% of luminaires
in FY14.
In Fans, CRG’s market share has increased from lows of 21% in FY11 to 26.6% in
FY14, which is quite substantial. New product launches accounted for 30% of
the revenues; and several premium products were launched.
In Pumps, CRG’s market share increased 50bps to 13.6% in FY14. In the
residential segment, the company improved its leadership position with market
share of 27%.
CRG’s consumer business has outperformed industry growth rates in last three years
FY12
Fans
Lighting
Pumps
Industry
-2%
12%
-8%
CRG
2%
17%
-4%
Industry
15%
12%
6%
FY13
CRG
22%
13%
26%
FY14
Industry
CRG
10%
15%
2%
12%
-10%
flat
Source: MOSL, Company
3 September 2014
3

Crompton Greaves
Productwise revenues and Traded Goods (INR m)
Revenues (INR m)
Cost of Purchase Goods (INR m)
Ad-spend witnessing an increased trend (INR m)
Ad Spend (INR M)
Ad (% of Consumer Rev)
2.7
2.7
2.2
1.4
1.7
1.9
1.6
1.9
Power driven Electric fans Electric Lamps
pumps
and ventillation
equipments
Appliances
156
211
256
227
345
474
691
766
Source: MOSL, Company
Source: MOSL, Company
Consumer business product-wise revenues (INR m)
Fans and Ventilation equipments
Electric Lamps
Power driven Pumps
Appliances
Total
FY09
6,032
4,636
2,794
210
13,672
FY10
7,645
4,923
3,854
683
17,105
FY11
9,097
5,703
5,217
969
20,986
FY12
FY13
FY14
9,122
11,138
12,848
6,667
7,689
9,010
5,019
5,869
5,790
1,211
2,120
1,817
22,019
26,816
29,465
Source: MOSL, Company
3 September 2014
4

Crompton Greaves
Leveraging Indian Manufacturing: expect traction in FY15/16
Several of the new product
launches in industrial and
switchgears require pre-
qualifications, leading to a
time lag and thus, we
expect a meaningful ramp
up in FY15/FY16
CRG has been positioning to leverage the Indian manufacturing through increased
exports, particularly in Power products (transformers from Kanjurmarg, GIS / RMUs
/ Circuit Breakers from Nashik, Automation products from Bangalore) and HT
Motors / Drives (factories commissioned in July 2013). During FY14, while the
exports (including deemed exports) increased 12% YoY, FOB exports were up sharply
at 19% YoY. Several of the new product launches in industrial and switchgears
require pre-qualifications, leading to a time lag and thus, we expect a meaningful
ramp up in exports in FY15/FY16.
In the
industrial business,
factories have been commissioned at Manideep (near
Bhopal) to produce HT Motors and Drives for Europe, Middle East, Africa and
South East Asia. During FY14, the company received approvals from 10 global
OEMs apart from four large end users. In FY14, the MV and LV motors plant was
also approved by GE Oil and Gas for global sourcing, and provides CRG a
strategic vendor status for a high growth sector. Exports in industry segment
were up just 9% in FY14; and we expect a meaningful traction in FY15/FY16.
Drives
business added 54 new customers, 25 OEMs, 3 new dealers, 5 system
houses and 19 new end users in FY14. Orders received in FY14 includes: from
Saudi Arabia for test bench and for crane applications in Germany. Exports
should witness traction in FY15/FY16.
Also, in
switchgears,
expansion of the GIS manufacturing capacity in India and
setting up an AIS circuit breaker manufacturing facility in Indonesia (51% JV with
PLNE) / Brazil will drive increased exports going forward.
In the last few years, CRG established new plants in Brazil and Saudi Arabia, a
marketing network in Africa and deepened the penetration in South East Asia
markets by establishing presence in Malaysia and Vietnam. These initiatives
have also supported expansion.
Revenue composition: Consolidated business, FY14
Australia
1%
Europe
20%
South
America
3%
North
America
11%
Africa
3%
India
49%
Exports (including Deemed) are up 12% YoY in FY14
Exports
18
13
11
13
17
19
22
% of Revenues
19
14
12 11 12
Asia
13%
Source: MOSL, Company
Source: MOSL, Company
3 September 2014
5

Crompton Greaves
Country-wise Exports Revenues (Standalone, INR m): Physical exports up 19% YoY in FY14,
led by Asia, Africa and South America
Asia
Africa
North America
South America
Europe
Australia
Total
% YoY
FY08
4,000
676
926
999
762
281
7,644
FY09
4,488
2,429
700
2,139
845
297
10,900
42.6%
FY10
5,122
2,070
316
2,233
642
55
10,437
-4.2%
FY11
3,567
2,726
297
1,978
505
55
9,128
-12.5%
FY12
FY13
FY14
3,103
2,562
3,485
2,146
1,920
2,302
422
975
336
1,702
1,676
2,258
391
426
591
56
84
82
7,820
7,643
9,053
-14.3%
-2.3%
18.5%
Source: MOSL, Company
3 September 2014
6

Crompton Greaves
Switchgears / Traction Electronics are key growth drivers
For CRG, switchgear revenues have increased meaningfully by 15% in FY14 and
the increase is largely led strong traction in
Ring Main Units (RMUs).
RMUs are
manufactured by CG-Lucy Switchgears (49%) and being marketed by CRG; the
related party transactions indicate that RMU purchases by CRG has nearly
doubled in FY14 to INR1.1b. In July 2014, the RMU manufacturing capacity at
Nashik was doubled to 1000 per month; CRG has a market share of ~18% in
distribution switchgears in India and thus is strongly positioned to benefit from
the increased investments in the power distribution network.
In FY14, Hungarian plant successfully completed the development of 245kv
GIS
for which it received a subsidy from the national government. This again is an
important milestone, in our opinion. Also, CRG started commercial production
of 36kv GIS, which is a key product addition in the distribution segment. The
plant capacity at Hungary has been increased from 16 bays per month to 35
bays; and the expansion allowed the plant to produce 85 bays in 4QFY14
compared to a total of 82 bays for the whole of FY13. The GIS capacity in Nashik
is also being expanded and should drive increased exports.
Another important achievement in 4QFY14 has been the successful pre-
qualifications from PGCIL for the 765kva
Circuit Breakers.
This should increase
the competitiveness in terms of bidding for system projects in India, given that
CRG was already pre-qualified for power transformers, instrument transformers
and surge arrestors for upto 765kva. Commissioning of the circuit breaker plant
in Indonesia (51% JV with PLNE) and the existing capacity in Brazil should drive
increased exports from Nashik going forward.
For
traction motors,
CRG developed an Integrated power supply system for
railway signaling systems in FY14. Also, the first IGBT power converter was also
successfully developed and supplied to Indian Railways.
CG-Lucy Switchgear: RMUs a key driver (Purchases by CRG,
INR m)
CG-Lucy Switchgears
Switchgears / Traction Electronics witness strong revenue
increases (INR m)
Switchgear
Traction Electronics, etc
FY09
FY10
FY11
FY12
FY13
FY14
Source: MOSL, Company
Source: MOSL, Company
3 September 2014
7

Crompton Greaves
Automation business: high operating leverage, 50%+ margins
FY14 has been an important milestone for ZIV as: i) Demand picked up in Europe, ii)
the company has also been successful in entering the emerging economies,
including India by bagging few initial projects iii) automation products unit at
Bangalore has been commissioned, and will be exporting to South Asia, Middle East
and South East Asia.
In smart meters, the company has participated in 10 Advanced Metering
Infrastructure (AMI) projects in Europe, Asia and America. The most significant
achievement was to secure the technical pre-qualification to participate in the
ERDF Linky project for the deployment of smart meters in France.
ZIV was awarded significant contracts in FY14 from major European Utilities:
Energias de Portugal, Iderdrola and Gas Natural Fenosa with a total of more
than 2 million meters. We understand that the automation business has a gross
margin of ~50%+; and thus as these projects get executed in 2HFY15, margins
should report a quantum increase.
EuropeRss installation base for smart meters is expected to rise sharply and hit
180 million by 2020; just as the Asian market will gain significant traction during
the period. Whilst Spain continues its dominance as an active market in 2014,
large-scale deployments in the UK, Germany and France will bring in the
momentum by late 2015.
Key automation orders received in FY14
Company
PGCIL
Saudi Electricity Company
Ministry of Electricity
ERDF
Companhia Hidro-Eletrica do Sao
Fransico
Administracion Nacional de
Electricidad
Gas Natural Fenosa
Iberdrola
Segment
Protection and Control Devices (5 substations)
Tap Changer Protection Relays
Protection and Control Systems
Protection Devices
Bus Bar Differential Systems
Smart Meters
Country
India
Saudi Arabia
Iraq
France
Brazil
Paraguay
Smart Meters
Spain
Smart Meters, Concentrators and Distributed
Spain
Automation Systems
Source: MOSL, Company
3 September 2014
8

Crompton Greaves
Valuations and View: Maintain Buy
CRG's journey to emerge as a 'global corporation' from India continues to face
multiple 'growth pangs'. Phase 1 of the restructuring program, encompassing the
European operations had been largely completed; and the business reported EBIDTA
breakeven in FY14. There had been initial successes in strategic areas like geography
expansion, moving up the value chain, widening the production footprint, etc. Thus,
FY15/FY16 should witness the gains of the fructification of these efforts over the last
two years. Demerger of the consumer business will unlock shareholder value.
Maintain Buy, with a revised Price target of INR271/sh (standalone business at 22x
FY16E, overseas at 0.5x EV/Sales).
CRG: PER Band Chart (x)
60
45
30
15
0
21.9
5.3
22.5
PE (x)
Peak(x)
Avg(x)
Min(x)
49.5
CRG PB Chart (x)
12.0
9.0
6.0
3.0
0.0
4.5
1.4
3.4
PB (x)
Peak(x)
Avg(x)
Min(x)
10.3
Source: MOSL, Company
Source: MOSL, Company
3 September 2014
9

Crompton Greaves
Operating matrix
FY11
Revenues (INR m)
Power Systems - Standalone
CG Global
Consumer Products
Industrial Systems
Others
Total sales
Less inter segment sales
Total
Growth %
EBIT Margins (%)
Power Systems - Standalone
CG Global
Consumer Products
Industrial Systems
Unallocable exp
Adjusted EBIDTA %
Standalone
Subsidiaries
Consolidated
EPS (NR/Share)
Standalone
Subsidiaries
Consolidated
Net (Debt) / Cash
Standalone
Subsidiaries
Consolidated
Net Working Capital (Days)
Standalone
Subsidiaries
Consolidated
FY12
FY13
FY14
FY15E
FY16E
FY17E
25,542 27,474 27,247 28,235 29,929 34,419 41,303
40,536 47,632 49,591 59,910 64,091 79,990 88,464
20,212 21,336 25,927 28,471 31,318 36,015 41,417
14,066 15,201 14,994 14,889 15,634 19,542 25,405
171
1,299
3,768
3,847
3,847
3,847
3,847
100,528 112,942 121,528 135,352 144,819 173,814 200,436
-477
-456
-584
-547
-601
-661
-727
100,051 112,486 120,944 134,806 144,218 173,152 199,708
9.5
12.4
7.5
11.5
7.0
20.1
15.3
18.0
8.2
14.5
18.7
0.9
11.6
-1.6
12.3
14.8
1.1
8.5
-6.0
10.7
14.2
1.4
9.2
-1.0
11.9
10.3
0.4
9.5
0.3
12.3
10.0
0.4
10.0
2.4
12.5
11.5
0.4
10.5
3.3
12.8
14.0
0.5
15.7
10.1
13.4
11.1
1.7
7.1
8.3
-2.1
3.2
8.9
0.3
5.1
9.1
2.5
6.2
9.7
5.0
7.7
10.5
6.0
8.6
10.8
3.6
14.4
7.9
-2.0
5.8
6.9
-3.9
3.0
8.3
-4.4
3.9
8.7
-2.4
6.4
10.9
0.9
11.8
14.5
2.3
16.8
5,401
(2,427)
2,974
8,198
7,756
4,329
8,859 12,082 17,670
(8,059) (15,430) (17,901) (19,487) (17,919) (14,553)
138 (7,675) (13,572) (10,627) (5,837)
3,117
27
33
29
34
32
33
25
24
25
34
26
30
32
26
20
32
33
30
32
29
24
Source: Company, MOSL
3 September 2014
10

Crompton Greaves
Financials and valuations
Income statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Minority Interest
Adj Cons PAT
2012
112,486
12
8,036
7.1
2,600
5,437
567
628
0
5,497
1,821
33.1
3,676
3,676
-60
-60
3,736
2013
120,944
8
3,832
3.2
2,029
1,802
955
1,000
-1,207
640
1,009
157.6
-369
1,918
-48
-7
1,926
2014
134,806
11
6,820
5.1
2,621
4,198
1,366
2,115
0
4,947
2,361
47.7
2,587
2,587
35
143
2,443
2015E
144,218
7
8,926
6.2
2,895
6,031
735
992
0
6,288
2,333
37.1
3,955
3,955
53
-41
3,996
(INR Million)
2016E
163,662
13
12,592
7.7
3,026
9,566
663
1,035
0
9,938
2,597
26.1
7,341
7,341
86
-82
7,423
2017E
188,795
15
16,300
8.6
3,172
13,128
574
1,260
0
13,814
3,354
24.3
10,460
10,460
42
-82
10,542
Balance sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2012
1,283
34,826
36,109
9,849
-122
45,992
44,087
23,005
21,083
1,493
7,864
55,343
12,233
31,432
4,976
6,702
40,186
36,395
3,791
15,157
45,597
2013
1,283
34,332
35,615
18,515
-1,681
52,544
53,424
24,726
28,699
1,965
7,907
59,807
16,367
31,605
5,834
6,002
45,834
41,612
4,222
13,973
52,543
2014
1,254
35,192
36,446
21,930
-1,532
56,962
59,233
26,825
32,408
2,184
2,989
69,168
16,714
35,913
8,150
8,392
49,787
45,723
4,064
19,381
56,961
2015E
1,254
31,776
33,029
21,009
-1,553
52,603
54,473
30,218
24,255
2,776
6,568
71,308
18,104
38,302
6,512
8,389
52,303
48,006
4,297
19,004
52,603
(INR Million)
2016E
2017E
1,254
1,254
37,832
46,551
39,086
47,805
19,444
18,036
-1,553
-1,553
57,095
64,406
55,547
56,957
33,572
37,072
21,975
19,885
5,776
8,276
9,790
15,378
79,022
90,482
20,481
23,129
42,777
48,583
6,515
8,473
9,248
10,296
59,468
69,615
54,775
64,436
4,693
5,179
19,554
20,867
57,095
64,406
E: MOSL Estimates
3 September 2014
11

Crompton Greaves
Financials and valuations
Ratios
Y/E Mar
Basic (INR)
Standalone EPS
Consolidated EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
Consolidated P/E
Cash P/E
Price / Book Value
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2012
7.9
5.8
9.9
56.3
1.4
27.9
34.9
20.6
3.6
16.8
0.7
10.7
13.1
2.7
102.0
39.7
73.6
0.1
2013
6.9
3.0
6.2
55.5
1.2
46.6
67.8
33.0
3.7
37.4
0.6
-1.0
3.7
2.5
95.4
49.4
76.7
0.4
2014
8.3
3.9
8.1
58.2
0.8
24.0
52.2
25.2
3.5
20.7
0.4
7.2
7.7
2.5
97.2
45.3
79.1
0.4
2015E
8.7
6.4
11.0
52.7
1.5
27.4
31.9
18.5
3.9
15.9
0.7
11.4
11.0
2.6
96.9
45.8
76.6
0.4
2016E
10.9
11.8
16.7
62.4
1.9
18.4
17.2
12.2
3.3
11.2
0.9
20.4
17.4
3.0
95.4
45.7
78.5
0.3
2017E
14.5
16.8
21.9
76.3
2.5
17.3
12.1
9.3
2.7
8.4
1.2
24.1
21.6
3.1
93.9
44.7
80.7
0.2
Cash flow statement
Y/E Mar
OP/(Loss) before Tax
Depreciation
Others
Interest
Direct Taxes Paid
(Inc)/Dec in Wkg Cap
CF from Op. Activity
(Inc)/Dec in FA & CWIP
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax)
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
2012
5,497
2,600
0
567
2,495
-2,310
3,859
-5,758
-1,117
0
-6,875
725
5,894
567
1,044
5,008
1,992
2,984
4,976
2013
1,848
2,029
0
955
2,177
2,046
3,494
-10,117
-43
0
-10,160
709
8,666
955
897
7,524
857
4,976
5,833
2014
4,947
2,621
0
1,366
2,211
-3,092
3,631
-6,550
4,919
0
-1,631
-1,147
3,415
1,366
587
316
2,316
5,834
8,150
2015E
6,288
2,895
0
735
2,354
-1,261
6,303
4,666
-3,579
0
1,087
-6,277
-922
735
1,095
-9,028
-1,638
8,150
6,512
(INR Million)
2016E
2017E
9,938
13,814
3,026
3,172
0
0
663
574
2,597
3,354
-546
645
10,484
14,850
-3,746
-3,582
-3,223
-5,588
0
0
-6,969
-9,170
82
82
-1,564
-1,408
663
574
1,366
1,822
-3,512
-3,722
3
1,958
6,512
6,515
6,515
8,473
E: MOSL Estimates
3 September 2014
12

Crompton Greaves
NOTES
3 September 2014
13

Disclosures
This research report has been prepared by MOSt to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies). This
Crompton Greaves
report is for personal information of the select recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to
invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been
furnished to you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into
account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable
for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and
investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business
relationships with a significant percentage of the companies covered by our Research Department Our research professionals provide important input into our investment banking and other business selection
processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that
the research professionals who were involved in preparing this material may participate in the solicitation of such business. The research professionals responsible for the preparation of this document may
interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting market information. Our research professionals are paid in part based on the
profitability of MOSt which include earnings from investment banking and other business. MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from
maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an
officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market commentary or trading
strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with
the recommendations expressed herein. In reviewing these materials, you should be aware that any or all o the foregoing, among other things, may give rise to real or potential conflicts of interest . MOSt and
its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in
any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or
lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to
hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The
information contained herein is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the
data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not
intended to be a complete statement or summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt
and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its
affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of
its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of
merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its
contents.
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of
Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Disclosure of Interest Statement
Analyst ownership of the stock
CROMPTON GREAVES
No
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or
will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible
for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.
Regional Disclosures (outside India)
For U.K.
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to
law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to
which this document relates is only available to investment professionals and will be engaged in only with such persons.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States.
In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state
laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein
are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has
entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer,
MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research
analyst account.
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors
Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore
to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Anosh Koppikar
Kadambari Balachandran
Email:anosh.Koppikar@motilaloswal.com
Email : kadambari.balachandran@motilaloswal.com
Contact(+65)68189232
Contact: (+65) 68189233 / 65249115
Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
For U.S.
For Singapore
Motilal Oswal Securities Ltd
3 September 2014
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
14