Crompton reported 3Q11 results that were operationally in-line with our estimates, though PAT was ahead due to a lower tax rate. the consumer segment was the strongest while the power business was flat. Crompton remains our pick in the T&D space and we maintain our Buy rating.

3Q11 operating numbers in-line with our estimates
􀀟 Crompton reported consolidated revenue for 3Q11 at Rs24bn (up 7% yoy) while EBIDTA was up 6% at Rs3.4bn. Margin was flat at 14.2% and in-line with our estimate.

􀀟 Net profit for the quarter came in at Rs2.3bn (up 16% yoy), slightly higher than our estimates, largely due to sharp decline in the tax rate during the quarter.

􀀟 Order flow and order book details are not yet available and we should be able to get these in the management call scheduled for Monday.

Strong performance in the consumer segment; power still subdued
􀀟 The company's consumer products segment performed the strongest, recording 30% yoy revenue growth in 3Q11. In 9M11, the segment was the primary revenue driver and reported revenue of Rs14.7bn (up 28% yoy). Segmental PBIT margin remained flat at 14% in 3Q11.

􀀟 Industrial segment revenue came in at Rs3.8bn in 3Q11 (up 23% yoy), but the margin fell to 18.2% (down 245bp yoy).

􀀟 The company's key segment, power, saw subdued performance during the quarter with revenue remaining flat yoy. The domestic power business registered revenue growth of 2%, but the international segment saw a decline in revenue.

􀀟 However, adjusting for euro depreciation, the company's international power segment grew at about 9% yoy during the quarter. PBIT margin in the power business remained flat at 13%.

Our pick in the T&D equipment space; maintain Buy
􀀟 Crompton remains our pick in the T&D space. The company's mainly products-based business gives it an advantage over peers, in our view.

􀀟 Crompton has been able to maintain its margins in the domestic business despite increased competition in recent quarters. The growth in the international segment augurs well for the company's performance. We maintain Buy with a TP of Rs364. The stock currently trades at an FY12F PE of 17x.