This small-cap stock is involved in manufacturing engines, engine applications, trading power tillers, engine-related spares, electric vehicles, and infrastructure equipment. The stock is down by 7 percent, and the company has delivered up to 46 percent return in one month after the company set to bring an IPO, Vijaya Kedia Investment, and a bulk deal.
Stock Price Movement:
In Monday’s trading session, Greaves Cotton Limited’s shares were down by 6.73 percent from the previous close of Rs. 297.15. The stock opened at Rs. 288.20 and is currently trading at Rs. 277.25, with a high of Rs. 298.85 and a low of Rs. 275.50. The market capitalization now stands at approximately Rs. 6,445.55 crore.
What Happened
Vijay Kedia, a well-known ace investor, recently acquired 12 lakh shares of Greaves Cotton, equivalent to a 0.52 percent stake, for Rs 25 crore through a block deal on December 9. This marks his first investment in the company. After his investment, the company has delivered a return of 45.88 percent over the last month.
On December 30, Greaves Cotton’s shares saw a surge of up to 13 percent after 43.45 lakh shares, or 1.87 percent of the company’s equity, worth Rs 131 crore, changed hands at an average price of around Rs 312.
Additionally, the company has also recently filed a draft prospectus for a Rs. 1000 crore public issue. The IPO includes a fresh issue of Rs 1,000 crore and an Offer for Sale (OFS) of up to 18.94 crore equity shares by Greaves Cotton Limited and Abdul Latif Jameel Green Mobility Solutions DMCC.
Recent Developments
Greaves Cotton has made significant progress in recent years to diversify its portfolio and strengthen its market position. In FY2019, the company acquired a majority stake in Ampere Vehicles, reinforcing its presence in the electric mobility sector.
The company has also launched eco-friendly products, such as the eHD series of electric pumps and the Ampere Zeal electric scooter. Additionally, Greaves expanded its retail presence with the opening of AutoEVmart, a multi-brand electric vehicle store in Bengaluru.
Business Segments
Greaves Cotton operates in key sectors, including Powertrain Solutions, where it manufactures engines for petrol, diesel, and CNG applications. Its subsidiary, Ampere Vehicles, is focused on the development of electric vehicles.
The company also provides aftermarket services, offering spare parts and services, and manufactures agricultural equipment, such as power tillers, for the farming sector.
Segment Volumes
The company’s segment volumes reflect a 1 percent growth in the auto segment, a 31 percent decline in the non-auto sector, a 9 percent growth in engine production, and strong double-digit growth in the electric mobility segment, which includes E2W and E3W.
The diverse product portfolio and emphasis on electric vehicles appear to be driving the company’s performance.
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Recent Quarter Results and Ratios
Greaves Cotton Limited’s revenue decreased from Rs. 727 crore in Q2 FY24 to Rs. 705 crore in Q2 FY25, reflecting a decline of 3.03 percent. However, the company’s net loss reduced significantly, from Rs. -375 crore in Q2 FY24 to Rs. -14 crore in Q2 FY25.
Regarding return ratios, the company’s return on capital employed (ROCE) and return on equity (ROE) are projected to be 3.72 percent and 1.62 percent, respectively. The debt-to-equity ratio is low at 0.06x, indicating the company is almost debt-free. Greaves Cotton Limited’s earnings per share (EPS) is expected to be Rs. 3.19.
Company Overview
Greaves Cotton Limited was founded in 1922 and is a prominent Indian engineering company that provides end-to-end energy solutions. It manufactures cleantech powertrain solutions for CNG, petrol, diesel engines, gensets, farm equipment, e-mobility, and aftermarket services.
The company operates in four segments, such as engines, electric mobility, cables & control levers, and others. Its electric mobility portfolio includes two- and three-wheelers such as the Ampere Primus and Greaves ELP. Committed to sustainable mobility, Greaves Cotton operates subsidiaries like Greaves Finance Limited and Greaves Technologies Limited.
Written By – Nikhil Naik
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