Greaves Cotton posts 5% Q1 revenue growth

However, net profit fell 11% to Rs 39 cr

Greaves Cotton Ltd, one of India's leading engineering companies, has posted 5 per cent growth in its revenue at Rs 445 crore for the quarter ended June 30, 2016 as against Rs 424 crore for the corresponding period last year.

Despite tough market conditions, Greaves Cotton maintained its net profit at Rs 39 crore for the first quarter of the current financial year, 11 per cent decline from Rs 44 crore in the comparable period last year.

EBITDA for the quarter under consideration stood at Rs 60.4 crore, a marginal decline from Rs 61.5 crore for the same period last year, recording a EBIDTA margin of 13.6 per cent during the current quarter.

"Despite a challenging market environment, the company with its sustained focus on various lines of business has recorded revenue growth of 5% in the quarter ended June 30, 2016 over the corresponding period last year. This has been possible due to strategic initiatives on launching new range of solutions, enhancing service quality and entering new geographies. This is to be seen in the context of the weak revenue growth in the immediate past quarters. Contributing to the higher revenue is robust growth in the Farm Equipment Business and the Auxiliary Power business," said Sunil Pahilajani, Managing Director and Chief Executive Officer of the company.

During the quarter, the company had taken a few initiatives that would help it prepare for the future which resulted in higher operating Expenses and a consequent reduction in profits.

"We continue our value engineering efforts that have delivered a healthy EBIDTA margin of 13.6%. Our efforts on cost controls are sustainable & will continue to improve. One of our key strengths has been our strong distribution network across the country. This has been traditionally used to supply spare parts and service to meet the needs of over 4 million customers. With the recently announced foray into a wider range of spare parts and consumables under the Greaves brand name, we are providing a reliable and quality alternative that delivers value to all stakeholders," he added.

Greaves becomes a one-stop solution provider for most parts requirements in the 3-wheeler passenger and commercial vehicle segment. Greaves is also ready with a new range of multi-cylinder engines that offers a wide range of solutions for payloads upto 3.5 T. This opens up new vistas of growth for the organisation.

"A good monsoon augurs well for the farm equipment business even as we ready ourselves with a 'Make in India' range of products for launch during the year," he added.