Crompton Greaves surges on heavy volumes

Crompton Greaves has moved higher by 10% to Rs 74.80 on the BSE on the back of three-fold jump in trading volumes.

The stock is currently trading at its highest level since March 15, after it turned ex-demerger of its consumer products business.

In past four trading sessions, the stock rallied 25% from Rs 60 on May 27, after the company reported March 2016 (Q4FY16) results. The S&P BSE Sensex was up 0.38% during the same period.

Religare Institutional Research maintains ‘buy’ rating on the stock with a target price of Rs 80.

“The key positive in Q4 came from the industrial segment where standalone EBIT (earnings before interest and depreciation) margins increased 220 basis point year on year (YoY) to 12.6%, led higher efficiency. Industrial revenues grew by 12.6%/10.8% YoY for Q4FY16/ FY16 on account of projects in the cement, railways and irrigation sectors. Management expects some of the process sectors to continue aiding demand for motors,” the brokerage house said in a report.

The power segment for the standalone entity was down 13% YoY in the quarter. According to management, this business is likely to revive in subsequent quarters as orders flow in from Power Grid and other utilities, added report.

At 02:30 PM, the stock was up 9% at Rs 74.04 on the BSE. A combined 19.19 million equity shares representing 3% of total equity of Crompton Greaves changed hands on the BSE and NSE. An average 7.5 million shares were traded daily in past two weeks on both the exchanges.