Greaves Cotton drops after Q4 earnings

The company announced Q4 results after market hours on Tuesday, 30 April 2013. The stock market was closed on Wednesday, 1 May 2013, on account of Maharashtra Day.

Meanwhile, the S&P BSE Sensex was up 105.55 points or 0.54% at 19,609.73.

On BSE, 4,756 shares were traded in the counter as against average daily volume of 14,837 shares in the past one quarter.

The stock hit a high of Rs 70.75 and a low of Rs 68.70 so far during the day. The stock had hit a 52-week low of Rs 60 on 18 July 2012. The stock had hit a 52-week high of Rs 87.55 on 9 October 2012.

The stock outperformed the market over the past one month till 30 April 2013, surging 12.73% compared with the Sensex's 3.55% rise. The scrip had, however, underperformed the market in past one quarter, declining 8.95% as against Sensex's 2.5% fall.

The company has equity capital of Rs 48.84 crore. Face value per share is Rs 2.

Greaves Cotton's EBIDTA (earnings before interest, depreciation, taxation and amortization) margin stood at 12.8% in Q4 March 2013.

Greaves Cotton's net profit declined 25.6% to Rs 137.96 crore on 6.7% growth in net sales to Rs 1867.86 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). Greaves Cotton's consolidated net profit declined 21.7% to Rs 148.02 crore on 6.4% growth in net sales to Rs 1900.69 crore in FY 2013 over FY 2012.

Greaves Cotton said it had exceptional income of Rs 43.30 crore during Q4 March 2012 and FY 2012. The net exceptional gain comprised of sale of land and building Rs 77.80 crore and provision for obsolescence and utility and impairment of investment Rs 20.30 crore and Rs 14.20 crore respectively, Greaves Cotton said in a statement.

Greaves Automotive Engine Business has been a key contributor to the growth story, Greaves Cotton said. The strategy of product shift to the emerging four wheeled small commercial vehicles industry, with regular supplies to Tata Motors's Ace Zip and Magic Iris, from the traditional three wheeled segment has been welcomed by the industry and customers alike, the company said. This apart, addition of new customer Vibgyor Vehicles, part of Vibgyor Group and entering a long standing agreement of seven year supply to Atul Auto have been initiatives to ensure smooth and efficient supplies across the year, it added. The power business has recorded reasonable growth in spite of the prevailing diffidence in the market place. Farm Equipment business will focus on newer products as part of its growth plan to improve its present market share, Greaves Cotton said in a statement.

Greaves Cotton said the Construction Equipment business has shown signs of recovery. The approach of expanding product range by adding relevant products through technological transfer from SAMIL, Korea, has been a key to this recovery, the company said. The recovery has been supported by the overall performance of the construction equipment industry and Greaves has improved its market share, Greaves Cotton said in a statement.

Greaves Cotton said it has consciously worked on consolidating the aftermarket vertical in order to partner with its customers in co-creating demand. The company has a focused aftermarket vertical that caters to the products and spares across businesses with the objective of providing minimum down time to any Greaves product, the company said.

Commenting on the company's performance in FY 2013, Mr. Sunil Pahilajani, MD & CEO, Greaves Cotton said, "All our businesses are intrinsically woven with the growth of the key sectors of the Indian economy. In spite of the turbulent economic backdrop we have been able to deliver growth. As an organisation we remain performance driven and customer centric. We are confident that clear focus on our multi- dimensional growth strategy through expansion of product portfolio, expansion of markets and expansion of geographies will translate into sustainable and profitable growth. We as a company have invested significant efforts and resources to streamline systems and processes, both internally and externally. This we believe will lead itself to efficient and continuous improvements in product development and customer delight which in turn will usher innovation and value creation".

Greaves Cotton's board of directors at a meeting held on Tuesday, 30 April 2013, recommended final dividend of 50 paise per share for FY 2013.

Greaves Cotton, a multi-product, multi-locational company is one of the leading engineering companies in India with core competencies in diesel/petrol engines, gensets and construction equipment. The company sustains its leadership through ten manufacturing units which produce world class products backed by comprehensive marketing and service/parts network throughout the country.

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