Greaves Cotton surges 24% in three days on strong December sales of EV arm

Shares of Greaves Cotton advanced higher by 11 per cent to Rs 171.45 on the BSE in Wednesday’s intra-day trade on the back of heavy volumes amid reports that the company's arm Greaves Electric Mobility will double its production capacity.

In the past three days, the stock has rallied 24 per cent after Greaves Electric Mobility, a leading electric two and three-wheeler manufacturer, sold over 10,000 units in December 2021.

At 12:11 pm, Greaves Cotton was trading 9 per cent higher at Rs 167.75, as compared to a 0.26 per cent rise in the S&P BSE Sensex. The trading volumes on the counter rose over five-fold with a combined around 14 million equity shares having changed hands on the NSE and BSE. The stock had hit a record high of Rs 184.25 on June 24, 2021.

The BSE has sought clarification from Greaves Cotton with reference to the media report, according to which, Greaves Electric Mobility is said to double its production capacity. The reply is awaited.

According to a Business Line news report, Greaves Electric Mobility is working on a new set of products, which will include a high-speed electric scooter and an electric three-wheeler cargo vehicle, to strengthen its position as an integrated player in the last mile transportation segment.

With the establishment of its new electric vehicle factory at Ranipet, which can be ramped up to produce 1 million vehicles a year over phases from about 120,000 units now, higher localisation levels in its electric products, and strong retail presence through Greaves Retail, the company hopes to be well-positioned to benefit from growing acceptance of electric vehicles in the country, the report said. 

Greaves Cotton's e-mobility arm Greaves Electric Mobility on Sunday said it sold over 10,000 units in December 2021. This includes both electric 2-wheelers (E2W) and 3-wheelers (E3W) segments. Ampere, fastest growing e-mobility brand, reported a record growth of almost 6 times revenue growth in December versus the same month last year and E3W business grew by 101 per cent in volume terms, the company said in statement.

It said that the October-December quarter (Q3) quarter was significant from many perspectives for Greaves Electric Mobility with the company acquiring 100 per cent stake in electric 3-wheeler company ELE (e-rickshaws) and completing acquisition of 26 per cent stake in another electric 3-wheeler company MLR Auto (Teja brand), along with the launch of Ranipet mega EV factory, one of the biggest EV factories in the country. Ampere vehicles have received significant demand in the market.

Meanwhile, rating agency India Ratings and Research (Ind-Ra) believes that electrification could substantially pick up in the 2W and 3W segments in three-to-four years, led by the following factors: the reduced upfront pricing differential between an internal combustion engine 2W and e-2W post the increase in the subsidy for e-2W under Faster Adoption and Manufacturing of Electric Vehicles II by 50 per cent to Rs 15,000/kWh in June 2021, no significant requirement of battery charging infrastructure, low operational cost, amid increasing cost of ownership for internal combustion engine vehicles, due to increase in fuel costs and prices undertaken by OEMs on account of increasing material costs.

This is evident from the volume growth of more than 48 per cent in e-2Ws and 245 per cent in e-3Ws in 1HFY22. Greaves Cotton is well positioned to benefit from this industry growth, led by its acquisition of Ampere, which held around 14 per cent market share in the e-2W segment in FY21(FY20: 12 per cent), new launches in the high-speed category, the large capacity expansion planned to manage competition, and the expansion into the e-3W space through Best way and MLR Auto, Ind-Ra said in a rating action. CLICK HERE FOR MORE DETAILS