Greaves Cotton - Q1FY21 Result Update - ICICI Securities

Greaves Cotton's (GCL) standalone revenues came in at Rs. 147.1 crore, down 69.2% YoY, (below our estimate of Rs. 175.8 crore). Engine segment revenues came in at Rs. 140 crore, down 67.7% YoY. E-mobility segment revenue declined 52.5% to Rs. 8.9 crore due to business disruptions amid Covid-19. At the EBITDA level, it posted a loss of Rs. 21.7 crore YoY (vs. EBITDA of Rs. 61.3 crore in Q1FY20) owing to higher employee expenses, operating expenses and less revenue booking. Loss after tax was at Rs. 24.2 crore (vs. PAT of Rs. 39.8 crore in Q1FY20), partly impacted by only marginal fall of 4% in depreciation and lower other income that fell 71% to Rs. 2.2 crore YoY.

Valuation & Outlook

Overall auto engine volumes may remain sluggish in the medium term due to BS-VI transition and economic slowdown amid Covid-19. While Bestway acquisition would expand E-3W base, new product launches in high speed E-2W vehicles at Ampere and new business initiatives (CNG engines, after market, B2C business) may provide much needed growth uptick in the long term. We build revenue, PAT CAGR of -4.6%, -7.4%, respectively in FY20-22E. We value GCL (base business at 12.5x on FY22E, Ampere at 1.5x P/sales on FY22E) at Rs. 80/share and maintain HOLD rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GreavesCotton_Q1FY21.pdf

Shares of GREAVES COTTON LTD. was last trading in BSE at Rs.81.95 as compared to the previous close of Rs. 83.9. The total number of shares traded during the day was 77879 in over 1671 trades.

The stock hit an intraday high of Rs. 85.5 and intraday low of 81.7. The net turnover during the day was Rs. 6442314.

Source : Equity Bulls

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