Q3FY21 Result Update - Greaves Cotton - ICICI Direct

Greaves Cotton's (GCL) standalone revenues came in at Rs. 436.8 crore, down 11.7% YoY, (above our estimate of Rs. 353.1 crore). The engine segment revenues came in at Rs. 412 crore, down 7.5% YoY. On the other hand, e-mobility segment revenue grew 47.4% to Rs. 57.8 crore. EBITDA declined 30.3% to Rs. 53.8 crore YoY (above our estimate of Rs. 33.9 crore). EBITDA margins declined 330 bps to 12.3% (vs. our estimate of 9.6%) impacted by higher operating expenses and less revenue booking. Employee cost fell 31.1% to Rs. 28.7 crore amid restructuring efforts aiding margins. Adjusted PAT (adjusted for exceptional item) was at Rs. 31.5 crore, down 37.6% YoY (above our estimate of Rs. 19.4 crore) partly impacted by lower other income.

Valuation & Outlook

Overall auto engine volumes may stay sluggish in the medium term due to BS-VI transition, pandemic. New product launches in high speed E-2-W vehicles at Ampere and new business initiatives (CNG engines, after market, B2C business) may provide much needed growth uptick in the long term. We introduced FY23E and build revenue, EBITDA CAGR of 3%, 3.2% in FY20-23E, respectively. We value GCL (base business at 12.0x on FY23E and Ampere at 1.0x P/sales on FY23E) at Rs. 90 (earlier Rs. 75) and maintain HOLD.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GreavesCotton_Q3FY21.pdf

Shares of GREAVES COTTON LTD. was last trading in BSE at Rs.92.15 as compared to the previous close of Rs. 87.75. The total number of shares traded during the day was 309356 in over 2847 trades.

The stock hit an intraday high of Rs. 94.1 and intraday low of 88.25. The net turnover during the day was Rs. 28513614.

Source : Equity Bulls

Keywords