Greaves Cotton Q1 FY27 earnings call

Greaves Cotton Limited commenced FY27 with a disciplined execution, achieving a consolidated revenue of ₹975 crores, marking a 31% year-on-year growth. Core businesses contributed ₹710 crores, growing 16% YoY, or 19% on a like-to-like basis after portfolio rationalization. The company's Greaves.Next strategy, focused on building a trusted, innovative, and future-ready engineering company, continues to progress, emphasizing core business strengthening, international presence expansion, and leadership development.

The Energy Solutions segment maintained strong growth momentum, delivering a 21% year-on-year increase in revenue. This was supported by robust demand from infrastructure, manufacturing, commercial, and industrial applications. Notably, the medium horsepower genset business, a key focus area, outperformed with a 32% YoY growth. The company also secured a large institutional order for supply, installation, commissioning, and aftersales services, strengthening its order pipeline and customer confidence.

The Mobility Solutions segment, encompassing automotive engines, aftermarket, and engineered components, achieved an 18% year-on-year growth. The automotive engine business had a strong quarter, growing 36% YoY, benefiting from healthy momentum in the domestic 3-wheeler segment. The Engineered Components business (Excel) returned to growth, delivering a 14% YoY increase, with revenues just under ₹70 crores and EBITDA margins exceeding 25%.

Greaves Electric Mobility Limited (GEML) delivered record volume growth of 101% in Q1 FY27, significantly outpacing the industry's 75% growth. Consolidated revenue for GEML reached ₹270 crores, almost doubling from the previous year. The 2-wheeler portfolio grew by 120%, and the 3-wheeler portfolio by 80%. GEML's market share increased to 5.6% by June 2026, and its 2-wheeler production capacity stands at 480,000 units, with a run rate of approximately 10,000 units per month.

Overall margins were compressed by 2-2.5% due to two primary factors: purposeful investments in people, technology, and organizational capabilities for future growth, and increased commodity prices, particularly following geopolitical developments in West Asia. To mitigate these pressures, the company is deferring non-essential costs, implementing a structured cost control program, and taking appropriate pricing actions. Management anticipates margin improvement from Q2, with full benefits expected in the second half of FY27.

The Board approved significant capital allocations, including an investment of ₹331 crores in Greaves Electric Mobility Limited (GEML) through a rights issue, and ₹50 crores in Greaves Finance Limited (GFL). These investments underscore the company's commitment to its investee businesses and strategic growth. GFL's Assets Under Management (AUM) currently stand at ₹560 crores. The company maintains a healthy balance sheet with nil debt and sufficient liquidity to fund its growth aspirations for the next two years.

Expanding international business remains a key priority. A significant milestone was the incorporation of Greaves International Trading FZE in Dubai, which will serve as a regional hub for the Middle East and Africa, strengthening distribution and customer relationships. The company also commissioned a pilot Battery Energy Storage System (BESS) facility, an important step in developing capabilities in emerging energy solutions. Additionally, a new Group Chief Technology Officer was appointed to advance the technology and innovation agenda.