GREAVESCOT - Greaves Cotton Ltd. Share Price

In the earnings call for Q4 and FY '26, Greaves Cotton Limited's management provided a positive outlook, highlighting a robust performance with a 22% year-on-year revenue growth and the highest annual revenue in a decade. The strategy, GREAVES.NEXT, aims to position the company as a future-ready engineering firm focusing on Energy, Mobility, and Industrial Solutions.

Key forward-looking points from management include:

1. Revenue and Growth Projections: Management targets a medium-term growth rate of 16% to 18% annually for core business segments. For FY '26, consolidated revenues reached INR 3,437 crores, reflecting an 18% increase year-on-year.

2. EBITDA and Margins: The management projects EBITDA margins to remain in the range of 13% to 15% as the business scales.

3. Investment Plans: CAPEX projections of INR 500 to 700 crores are earmarked for product development, operational enhancements, and expansion into international markets over the next five years.

4. Segment Performance: The Energy Solutions business grew by 20% for the full year, with a significant demand for gensets driven by the infrastructure boom. The Mobility Solutions segment saw a 48% growth in Q4 due to strong demand for diesel engines.

5. International Business Expansion: International revenues increased from approximately 9% to 13% of total revenue, with a strategy to strengthen presence in Europe and the Middle East.

6. Electric Mobility: Greaves Electric Mobility achieved a 51% growth year-on-year in FY '26, with the aim of further increasing market share and reducing cash losses.

7. Cost Management: The management acknowledged recent pressures from input costs but emphasized a disciplined approach to cost management and maintaining profitability.

Overall, management expressed confidence in continuing growth momentum and building capabilities aligned with their strategic roadmap.

Here are the major questions and their detailed answers from the Q&A section of the earnings call transcript for Greaves Cotton Limited held on May 6, 2026:

1. Nilesh Doshi: Are you indicating the EBITDA margin at the consolidated level or the standalone level?

   • Manish Poddar: These numbers primarily pertain to our core businesses, including standalone operations and a couple of others like Excel and Greaves Technologies. Greaves Electric Mobility is part of our investee businesses, which follow a different profitability path.

2. Nilesh Doshi: How long will Greaves financially support the mobility business due to its losses?

   • Manish Poddar: FY '26 has seen significant improvement in Greaves Electric Mobility, reducing losses from minus 30% to 20%. Volume growth, coupled with market share expansion, indicates a clear path to profitability. We'll support investments in the short term as we aim for long-term gains.

3. Zaki Abbas Nasser: Can we consider Q4 as a new base for the next year in terms of core business?

   • Parag Satpute: We are pleased with our core business performance. Our midterm growth ambition remains 16% to 18%, so we see Q4 as a strong foundation for ongoing growth.

4. Anubhav Mukherjee: Is the drop in gross margin due to inflation and the Middle East situation?

   • Manish Poddar: Yes, the higher raw material costs, particularly in aluminum and copper, have impacted margins. We're implementing price passthroughs and maintaining operational efficiency to manage these pressures.

5. Daisy Bharucha: What type of products are being delivered to the defense sector?

   • Parag Satpute: We are delivering engines for the repowering of army trucks. This contract showcases our engineering capabilities in specialized applications.

6. Saket Kapoor: What roadmap does the electric mobility business have for reducing cash losses?

   • Vikas Singh: We're prohibited from making forward-looking forecasts due to DRHP rules. However, our growth trajectory, brand recognition, and reductions in losses indicate an encouraging future.

These responses encapsulate the details discussed during the Q&A session, reflecting the company's strategies and outlook for business segments, especially in challenging economic conditions.