GREAVESCOT - Greaves Cotton Ltd. Share Price

The management of Greaves Cotton Limited expressed a positive outlook focused on diversification, sustainable mobility, and long-term growth. Key highlights include:

1. Strategic Transformation: Transitioning from a single-product diesel engine company to a multi-business entity with fuel-agnostic solutions (CNG, electric, hydrogen), emphasizing B2C growth (64% of revenue).

2. Financial Strength: Consolidated Q3 FY25 revenue reached Rs.751 crore, with standalone growth of 13% (Rs.502 crore). EBITDA margins improved, supported by cost efficiency, and cash reserves stood at Rs.503 crore with near-zero debt.

3. Business Segments:

   • Engineering (Engines & Gensets): Non-auto applications grew 30% YoY, with genset market share rising to 4%. Exports contributed 10% of revenue.
   • Retail: Greaves Retail grew 13% YoY, expanding into EV components, HCV parts, and exports (Philippines, East Africa).
   • Electric Mobility (GEML): Revenue of Rs.184 crore in Q3. Ampere regained 5th position in e2W segment (3.4% market share) with new launches (Magnus Neo, Nexus). Filed DRHP for IPO to fund tech, capacity, and inorganic growth.

4. Innovation & Expansion:

   • Launched CPCB IV+ gensets, hydrogen-compliant engines, and Euro 5+ diesel engines.
   • Entered aerospace (AS9100D certification) and construction equipment segments.
   • Expanded EV charging infrastructure and set distance records (e.g., 225 km on a single charge for e3Ws).

5. Growth Targets: Aiming for Rs.15,000 crore revenue by 2030 via organic expansion (new products, digital integration) and acquisitions. Focus areas include EV components, non-auto engineering, and global markets.

6. Sustainability: Commitment to reducing emissions through diversified clean-energy solutions (e.g., hydrogen engines, electric powertrains).

The management remains confident in leveraging India's mobility demand, infrastructure growth, and strategic investments to drive sustained profitability and market leadership.

Question 1:
Zaki Nasir: "How do you expect to achieve the Rs. 15,000 crore revenue target by 2030, requiring ~30% growth? Will this be organic or via acquisitions? Also, what is the current cash balance and its post-IPO trajectory?"

Answer Summary:
The management highlighted a diversified revenue strategy, with an 18% CAGR over recent years, driven by organic expansion and selective inorganic opportunities. Cash reserves stood at ~Rs.503 crore (consolidated) as of December 2023, supporting future investments. Growth will focus on expanding EV, retail, and engineering segments, leveraging existing capabilities and market alignment.

Question 2:
Krisha Kansara: "How is Greaves increasing market share in CNG engines against competitors like Bajaj Auto? What differentiates newly launched engines (e.g., hydrogen, Euro 5+) in terms of technology and timelines?"

Answer Summary:
Greaves adopts a fuel-agnostic strategy, tailoring engines to OEM needs while diversifying beyond automotive (e.g., gensets, exports). The hydrogen engine is a concept demonstrator, while Euro 5+ engines are market-ready, meeting 2025 norms. New products target niche applications (e.g., construction) and export markets, with gradual commercialization based on demand.

Question 3:
Krisha Kansara: "What are Excel Controlinkage's growth constraints, and how are capacity expansions addressing them?"

Answer Summary:
Excel faced temporary slowdowns due to muted OEM demand (commercial vehicles, tractors) and export inventory corrections. Capacity expansions focus on debottlenecking and upstream component production, ensuring readiness for demand recovery. Quarterly growth (15% QoQ in Q3) reflects improving traction.

Question 4:
Tushar Bohra: "Could you elaborate on aerospace opportunities post-AS9100D certification? Are railways/defense adjacencies being explored?"

Answer Summary:
Aerospace certification enables machining for aviation components, a long-term opportunity requiring stringent qualifications. Adjacencies include railway parts, defense collaborations, and energy services (e.g., replacing diesel gensets with lithium batteries). Greaves aims to leverage precision engineering capabilities across sectors.

Question 5:
Tushar Bohra: "Is the hydrogen engine designed for retrofitting or new applications? Will it target four-wheelers/commercial vehicles?"

Answer Summary:
The hydrogen engine showcases technical capability, with retrofitting feasibility for larger engines. Applications depend on hydrogen availability and TCO economics. Current focus is on three-wheelers, but scalability for commercial vehicles is under exploration.

Question 6:
Abhishek Salunke: "Why has Excel's revenue declined YoY? What is its capacity utilization and acquisition strategy?"

Answer Summary:
Excel's revenue dipped due to OEM sluggishness and export destocking. Capacity utilization remains healthy, with expansions targeting future demand. Inorganic growth will prioritize ROI/ROCE metrics, with no fixed EV/EBITDA multiples.

Question 7:
Jyoti Singh: "How will Greaves Retail sustain growth in spares (75% of revenue)? What partnerships/new categories are planned?"

Answer Summary:
Greaves Retail diversifies into EV spares (e.g., e-rickshaws), HCV/construction parts, and multi-brand servicing. Digital integration and exports (Philippines, Africa) complement growth. Energy-as-a-service for railways/telecom is a new adjacency.

Question 8:
Amit Kumar: "Why are EV two-wheeler sales subdued despite subsidy reinstatement? Are there operational constraints?"

Answer Summary:
Industry-wide slowdowns (30% MoM drop in December) and inventory transitions for new launches (Magnus Neo) impacted sales. No operational constraints exist; traction is expected post-Auto Expo.

Question 9:
Atul Panpatil: "How did the genset segment perform in Q3? Will FY26 see stronger growth?"

Answer Summary:
Genset demand aligns with GDP/Infra growth, with CPCB IV+ compliance driving upgrades. Exports and domestic recovery (post-regulatory changes) will fuel FY26 growth. Margins benefit from operational efficiency and diversification.