Greaves Cotton - Q2FY21 First Cut - ICICI Direct

(CMP: Rs. 68; MCap: Rs. 1570 crore)

Greaves Cotton Ltd reported muted operating performance for Q2FY21 with topline decline of 41.2% which still remains a key concern on the back of slowdown in core engine business amid business disruptions and BS VI transitions.

Q2FY21 Earnings Summary

- Standalone revenues came in at Rs. 288.2 crore, which declined by 41.2% on YoY, (below our estimates of Rs. 298.7 crore). The engine segment revenues came in at Rs. 166 crore which declined by 40.4% YoY. On the other hand, E-Mobility segment revenue grew by 23.9% to Rs. 42.5 crore owing to pent-up demand amid unlock measures

- EBITDA declined by 70.5% to Rs. 17.5 crore on YoY (above our estimates Rs. 13.7 crore). While, EBITDA margins declined by 600bps to 6.1% (Vs our estimate of 4.6%) impacted by higher operating expenses and lesser revenue booking

- The company has reported Adj. PAT (Adjusted for exceptional item) at Rs. 3.4 crore, down by 91.5% on YoY basis (below our estimate of Rs. 4.1 crore) partly impacted by lower other income. It has reported an exceptional item of Rs. 31.1 crore which includes Rs. 14.1 crore towards impairment loss on fixed assets and Rs. 16.9 crore towards employee separation cost

Greaves cotton's posted weak performance owing to demand & supply side disruptions in the 3W/4W segment amid economic slowdown while EBITDA deteriorated due to lesser revenue booking and under absorbed operating cost amid covid-19.

We would come out with a detailed report post the Conference call.

Shares of GREAVES COTTON LTD. was last trading in BSE at Rs.67.75 as compared to the previous close of Rs. 66.65. The total number of shares traded during the day was 19479 in over 348 trades.

The stock hit an intraday high of Rs. 68.75 and intraday low of 66.85. The net turnover during the day was Rs. 1319909.

Source : Equity Bulls

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