Greaves Cotton – Q2FY21 Results Update – ICICI Direct
[ad_1]
Greaves Cotton’s (GCL) own-source revenue amounted to Rs. 288.2 crore, which fell 41.2% year-on-year (versus our estimate of Rs. 298.7 crore). Engine segment revenue amounted to Rs. 266 crore, down 40.4% year-on-year. On the other hand, the revenues of the electric mobility segment increased by 23.9% to reach Rs. 42.5 crore due to pent-up demand. EBITDA fell 70.5% to Rs. 17.5 crore year-on-year (compared to our estimate: Rs. 13.7 crore). While EBITDA margins fell 600 basis points to 6.1% (versus our estimate of 4.6%) impacted by higher operating expenses and lower revenues. The adjusted PAT (adjusted for one-off item) was Rs. 3.4 crore, down 91.5% year-on-year (lower than our estimate of Rs. 4.1 crore). He reported an exceptional item of Rs. 31.1 crores.
Assessment and outlook
Overall automotive engine volumes could remain low in the medium term due to the BS-VI transition, automatic 3W and 4W slowdown in the midst of Covid-19. While the acquisition of Bestway would expand the E-3-W base, new product launches in high-speed E-2W vehicles at Ampere and new business initiatives (CNG engines, aftermarket and B2C activities) could provide a much-needed acceleration in long-term growth. We generate revenue, PAT CAGR of -4.8%, -7.4% on FY20-22E, respectively. We estimate GCL (12.0x baseline activity on FY22E and 1.5x P ampere / sales on FY22E) at Rs. 75 / share and hold HOLD.
For more details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GreavesCotton_Q2FY21.pdf
Shares of GREAVES COTTON LTD. was last trading on BSE at Rs.68 from the previous close of Rs. 67.9. The total number of shares traded during the day was 111,708 in more than 1,301 trades.
The share hit an intraday high of Rs. 70 and an intraday low of 66.05. The net turnover during the day was Rs. 7,642,548.
[ad_2]