Greaves Cotton Ltd. share price target

Greaves Cotton's (GCL) revenues were at | 476.8 crore, up 4.1% YoY, below our estimate of | 485.8 crore. EBITDA was flat at | 61.3 crore YoY (below our estimate of | 65.1 crore). EBITDA margins were at 12.8%, down 50 bps YoY, below our estimate of 13.4%. PAT came in at | 38.2 crore, down 4.2% YoY (below our estimate of | 45.2 crore). For Q1FY20, engines contributed...

Greaves Cotton Limited's (GCL) Q1FY2020 results missed estimates as topline growth moderated sharply to 4% and margins contracted by 50 BPS y-o-y due to operating deleverage. Net profit fell by 4%. Apart from slowdown in the traditional diesel 3W business (40% of the topline), growth is also expected to slow in the aftermarket segment (22% of revenue) due to liquidity concerns and in the agri segment due to rural stress. While emerging business of CNG engines and electric 2W are growing rapidly, given their small size, it would not meaningfully offset...

Greaves Cotton came out with good set of numbers, revenue surpassed our estimate, however EBITDA and PAT were slightly below our estimate. Standalone revenue for Q4FY19 grew 8.6% YoY to Rs 5281 mn, ahead of our estimate of Rs 4740 mn, while EBITDA came at Rs 700 mn slightly below our estimate of Rs 760 mn. EBITDA margin contracted by 112bps YoY to 13.3% from 14.4% in Q4FY18, mainly due to high commodity prices and slower after market growth. Adjusted PAT (adjustment for exceptional item comprising of Rs 155mn provision for IL&FS; exposure) for the quarter stood...

Greaves Cotton (Greaves) Q4 and FY19 estimates were in line with our estimates. Q4 adjusted earnings dropped by 4.2% YoY to Rs. 1.89 on the back of higher commodity prices, gross margin dropped by 150 bps YoY.

In Q4Y19, GCL's engine volume (3-W, 4W) grew 6.8% YoY to 86647 units. The 3-W (passenger, goods) volumes grew 7.5% YoY at 74060 units. On non-auto side, power genset segment volume grew 16.6% YoY to 1130 units. Pumpset volume grew 26.9% to 25319 units YoY. Total agricultural volume grew 13.5% with some impact on power tiller segment due to liquidity issues at customers end. We build in 3-W volumes of ~348637 and...

9% y-o-y to Rs 528 cr. The traditional 3W engines business reported a healthy volume growth of 8% y-o-y, while the new business of multi brand spares (aftermarkets) remained under pressure for the quarter due to liquidity crunch. Healthy growth in agri pumpset business further aided the revenue growth. Revenues were broadly in line with estimates. However, operating margins...

to remain under pressure; shift in favor of alternate fuel run engines and a likely steep increase due to BS6 emission norms to impact volumes: Greaves cotton Limited (GCL) derives around 40% of its revenues from the 3wheeler diesel engines segment. The diesel engine segment demand has been under pressure in the recent past given the Government thrust...

In Q3Y19, GCL's engine volume (3-W, 4W) grew 3.0% YoY to 81622 units. The 3-W (passenger & goods) volumes grew 3.8% YoY to 69097 units. On the non-auto side, power genset segment volumes grew 38.3% YoY to 1516 units. PK pumpset volume grew 5.2% to 17356 units YoY, diesel pumpset volumes declined 36.6% to 2213 units while electric pumps volume were at 9000 unit for Q3FY19. Agri power tiller volumes doubled to 655 units YoY. We build in 3-W volumes of ~294568 and ~316974 units in FY19E and FY20E, respectively. In Q3FY19, engine business...

Greaves Q2 in Line with Estimates: Greaves revenue grew by 9.4% to Rs. 4.95 bn which is the highest ever in a quarter and PAT grew by 9% to Rs. 0.49 bn in-line with our estimates.

During Q2FY19, EBITDA came in at | 73.3 crore, up 8.0% YoY (in line with our estimates: | 72.7 crore). EBITDA margins came in at 14.8%, which declined marginally by 20 bps YoY, better than our estimate of 14.2%. The key reason for the variance was the more-than-expected increase in other operating expenses The company reported a PAT of | 49.4 crore, which remained flat on a YoY basis, in line with our estimate of | 49.3 crore. Effective tax rate increased 70 bps to 31.5% for the quarter...