Greaves Cotton Ltd share Price

The share price of Greaves Cotton has generated a breakout above the falling supply line joining highs since January 2022 signalling resumption of up move and offers fresh entry opportunity
 
Buying demand has emerged in the stock from the support area of ₹ 130-150 as it is the confluence of the term 100 weeks EMA (currently at ₹ 147) and the rising demand line support, which has been held on multiple occasions in last 15 months highlighting favourable risk reward set up and a positive price structure
 
We expect the stock to continue its current pullback and head towards ₹ 190 levels in the coming months being the 80% retracement of the April-May 2022 decline (₹ 210-130)


Among oscillators, the weekly 14 periods RSI has recently generated a buy signal and is seen sustaining above its nine periods average. It has recently rebounded from the oversold territory testing its previous major lows thus supports positive bias

Greaves Cotton (GCL) is a leading diversified engineering company with a presence in automotive, non-automotive, aftermarket, retail, electric mobility solution and finance. New business share increased to ~49% while engine reduced to ~48% in FY17-22. E-mobility is expected to drive future growth (~38% of FY22 revenue)

GCL reported a decent set of Q4FY22 numbers. Standalone revenue came in at ₹ 378.7 crore (vs. I-direct estimate of ₹ 441.2 crore), which declined 17.1% YoY. Standalone EBITDA of ₹ 29.1 crore (vs. I-direct estimate of ₹ 44.6 crore), down 38.5% YoY, impacted by restructuring, higher commodity prices. On a consolidated basis, EBIDTA came in at ₹ 41 crore (vs. EBITDA of ₹ 42 crore in Q4FY21). Consequently, standalone PAT of ₹ 16.8 crore (vs. I-direct estimate of ₹ 20.6 crore) declined 29.6% YoY. Engine (auto, non-auto) volumes declined 41% to 25469 units’ YoY.
 
Consolidated revenue grew 19.3% YoY to ₹ 620.8 crore. The engine segment revenues came in at ₹ 349.1 crore, declining 17.8% YoY. On the other hand, e-mobility segment revenue increased 243.5% to ₹ 237.29 crore. E-Mobility segment turns profitable in Q4FY22; EBIT came at ₹ 7.26 crore vs. loss of ₹ 11.2 crore in the same period last year. For FY22, E-mobility segment revenues crossed the ₹ 500 crore mark
 
Recently, the company gets growth capital for its EV business, Abdul Latif Jameel has committed to invest up to US$220 million in Greaves Electric Mobility. Abdul Latif Jameel will initially invest US$150 million for a 35.8% stake on a fully diluted basis in the company. GCL (and Esop holders)  will have 64.2% in GEMPL on a fully diluted basis
 
Transformation strategy to increase E-mobility and new-initiatives business share to drive long term growth and help transform and de-risk its business. Consolidation of manufacturing operations into Megasites to bring higher operational efficiencies and reduced fixed costs in the long run. We expect revenue, EBITDA to grow at CAGR of ~13.6%, 76.8%, respectively in FY22-24E

Auto parts & equipment company Greaves Cotton announced Q1FY24 results:

• Standalone EBITDA for Q1FY24 stood at Rs 45 crore, a growth of 63% YoY, and an improvement in margins by 4 bps to 11.3%
• New acquisition Excel's revenue stands at Rs 39 crore with robust margins
• Ampere Electric Scooter crosses cumulative 2,00,000 secondary sales milestone

Commenting on the company's Q1FY24 performance, Nagesh Basavanhalli, Non-Executive Vice-Chairman of Greaves Cotton, said, "We have taken significant steps in progressing towards becoming a full-stack ecosystem player focused on democratising sustainable mobility. Our growth stems from our dedicated team and strategic investments in clean technology, product innovation, and design. The acquisition with Excel Controlinkage has led to growth and enhanced capabilities, and our recent majority stake acquisition in MLR presents a valuable opportunity to strengthen our position in the 3-wheeler market. This also aligns with our strategy of focusing on sustainable margin improvement."

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