Greaves Cotton Ltd. share price target

The Q4FY20 results of Greaves Cotton (Greaves) were lower than estimates across parameters. Earnings pressures are expected to sustain in near term as economic slowdown on account of COVID-19 would impact growth across segments. Moreover, negative operating leverage and pricing pressures from customers would impact margins. At CMP, the stock is trading at 14.4x FY22 earnings which is close to its long-term historical average of 16-17x....

Auto volumes to be impacted by BS-VI, slowdown in FY21E In Q4Y20, GCL's engine volume (3-W) fell 49% YoY to 37516 units while 4W volumes fell 87% YoY to 529 units. They are likely to be impacted by strict BS-VI norms in FY21E and auto slowdown. Other engines segment de-grew 7% YoY to 8739 units. Overall engine volumes de-grew 46% YoY. On nonauto side, power genset volumes declined 35% YoY to 736 units. Overall agriculture (pumpset, power tiller, other) volumes declined 68% YoY to 11928 units. GCL may have to take a price hike of 35-50% for BS-VI compliant engines leading to significant volume reduction and margin stress as it is difficult to completely pass on the price increase amid economic...

The Q4FY20 results of Greaves Cotton (Greaves) were lower than estimates across parameters. Earnings pressures are expected to sustain in near term as economic slowdown on account of COVID-19 would impact growth across segments. Moreover, negative operating leverage and pricing pressures from customers would impact margins. At CMP, the stock is trading at 14.4x FY22 earnings which is close to its long-term historical average of 16-17x....

In 3QFY20, GCL's 3W engine volumes grew 11.7% YoY to 77,148 units while 4-W volumes declined 69% YoY to 1,428 units. These are likely to be impacted by strict BS-VI norms in FY21E. Others engines segment registered growth of 2.2% YoY to 8,649 units. Overall engine volume grew 6.2% YoY. On non-auto side, power genset segment volume declined marginally by 13% on YoY basis to 969 units. Overall agriculture (pumpset, power tiller,...

Greaves Cotton's (GCL) revenues came in at | 494.7 crore, marginally down 2.3% YoY, (in line with our estimates of | 496.1 crore aided by new initiatives business. EBITDA grew 9.4% to | 77.2 crore YoY (above our estimate of | 61 crore). EBITDA margins improved and came in at 170 bps YoY to 15.6% (vs. our estimate of 12.3%) on the back of a reduction in other operating expenses and raw material expenses. Adjusted PAT was at | 50.5 crore, up...

Greaves Cotton Q2 adjusted earnings came in at Rs. 1.66 fall of 17.8 percent onaccount of revenue mix and cost pressures.

Greaves Cotton's (GCL) revenues came in at | 490 crore, down 1.0% YoY, below our estimate of | 501.2 crore impacted by the auto slowdown. EBITDA came in at | 59.1 crore, down 19.3% YoY (below our estimate of | 69.7 crore). EBITDA margins came in at 12.1%, down 270 bps YoY, impacted by higher operating expenses. GCL reported adjusted PAT of | 42.3 crore, up 6.1% YoY (below our estimate of | 52.1 crore). For H1FY20, engines...

The results of Greaves Cotton Limited's (GCL) Q2FY2020 missed estimates. Topline declined marginally by 1% y-o-y. Subdued performance across engines, agri and aftermarkets segments dragged the revenues down. Operating margins shrunk 270 bps y-o-y to 12.1% (missed estimates) attributable to adverse product mix and high raw material costs. The adjusted PAT at Rs 40 cr declined 19% y-o-y and missed our estimates of Rs 50 cr. Given the headwinds, GCL's topline growth is expected to moderate sharply to flat growth in FY2020....

Background: Greaves Cotton (GCL) is one of the largest manufacturers (primarily) single cylinder (diesel, gasoline engines) and dual cylinder engines, which find application in running 3-W vehicles and 4-W small commercial vehicles (SCVs). The company offers products and solutions across business units- Engines, power, farm equipment, mobility and aftermarket. In FY19 Greaves Cotton augmented its Clean Technology portfolio with entry in the last-mile affordable 2W...

Slowdown Impact Growth & Profitability in Q1: Greaves Cotton Q1 earning came in much below our estimates on account of revenue mix, cost pressures and lower other income. Revenue for Q1 grew by 7% to Rs. 4.9 Bn and electric mobility contributed ~ 3.8% of revenues.