GREAVESCOT - Greaves Cotton Ltd. Share Price

The management of Greaves Cotton Limited provided an optimistic outlook during the Q2 and H1 FY26 earnings call. Key points from the management's forecast include:

1. Positive Demand Trends: The outlook for the second half remains positive across most business lines, driven by healthy demand in automotive and gensets due to infrastructure investments and an upturn in agricultural and construction activities. Key sectors like mining and urban infrastructure also show strength.

2. Core Segment Performance: The automotive engine segment continues to see a revival with increasing demand for 3-wheelers and small commercial vehicles, bolstered by stable fuel prices and better fleet utilization. The genset market share has improved to approximately 4%, underpinned by reliable product offerings.

3. Financial Performance: For Q2, consolidated revenues stood at Rs. 815 crore, marking a 16% year-on-year growth. The standalone revenue increased to Rs. 552 crore, with EBITDA growing by 32% year-on-year leading to improved margins.

4. Growth and Strategy Plan: Management anticipates a sustained revenue growth of 16% to 20% CAGR over the next four to five years. The new strategic initiative, termed GREAVES.NEXT, aims to position the firm as a trusted engineering company focusing on energy solutions, mobility, and industrial applications.

5. Electric Mobility Progress: The electric mobility unit, Greaves Electric Mobility, reported revenues of Rs. 199 crore in Q2, with a 54% year-on-year volume increase in the electric 2-wheeler segment, enhancing its market share from 3.2% to 4.2%.

6. Long-term Revenue Target: Management reiterated the ambition to achieve revenues between Rs. 15,000 crore to Rs. 16,000 crore by FY30, aiming for a strong foundation composed of diversified capabilities and sustained customer trust.

The management's focus remains on innovation, operational excellence, and responding to market dynamics, maintaining a resilient forecast for the upcoming periods.

Q&A Summary from the Greaves Cotton Limited Earnings Call (November 6, 2025)

Q1: Krisha Kansara (Molecule Ventures): What is causing the slowdown in Excel Controlinkage's growth and margin compression?

A1: The core business with heavy commercial vehicles is strong. However, our export business has seen challenges due to overdependence on one geography. This led to margin erosion since exports had higher margins. We're now diversifying in exports, which takes time but is essential for long-term growth.

Q2: Krisha Kansara: Breakdown between volume and price growth in the genset division?

A2: The growth primarily emerged from domestic markets, driven by an expanded distribution network and improved customer service. While we saw some export orders, most growth came from diversifying into segments that meet specific customer needs.

Q3: Krisha Kansara: What is the reason behind stagnant aftermarket sales?

A3: The retail segment, especially auto aftermarket spares, has seen a decline due to the shrinking 3-wheeler vehicle parc post-COVID. However, after several quarters, we observe stabilization, and expect previous engine sales to translate into future aftermarket growth.

Q4: Krisha Kansara: Expectations for aftermarket segment growth?

A4: We anticipate the aftermarket segment to grow at a CAGR of 8%"“9%, reflecting the overall diesel engine parc growth, which is stabilizing as demand recovers.

Q5: Krisha Kansara: Updates on long-term debt increase?

A5: The increase largely comes from financing for Greaves Finance's EV business initiatives. This includes loans from reputable institutions aligned with our growth strategy.

Q6: Jyoti Singh (Arihant Capital Markets): What's the revenue projection timeline for the rare earth battery partnership with Chara?

A6: Our partnership with Chara is progressing well, with trials underway on key products. Revenue contributions should materialize as we commercialize these developments in the near future.

Q7: Jyoti Singh: Are we targeting specific EBITDA margins under the new strategy?

A7: We aim to maintain current healthy EBITDA margins while targeting top-line growth at 16% to 20% CAGR, facilitated by sustainable portfolio development.

Q8: Jyoti Singh: Timeline for export contribution reaching 30%?

A8: We are focusing on diversifying our export opportunities. While we expect initial slow growth rates, we will develop a dedicated team to expedite international business over time.

Q9: Sonal Minhas (Prescient Capital): Will the electric and finance businesses remain part of the core strategy?

A9: Yes, both are critical to our overall strategy but managed differently as they target consumer-focused markets. We believe in their long-term viability and profitability.

Q10: Dhruv Shah (Ambika Fincap): What are the margin expectations by 2030?

A10: We foresee margins remaining stable at current levels while achieving top-line CAGR of 16%"“20% through consistent operational performance across attractive market segments.

This summary captures the key questions and answers from the earnings call, providing insight into Greaves Cotton Limited's strategic direction and growth expectations.