Greaves Cotton

For Q4FY14, thanks to the surge in other operating income to the tune of Rs.5 core, other income going up almost 2 times (YoY) to Rs.7 crore, 10% drop in operating costs and most importantly, the exceptional income of Rs.33 crore through sale of some of its residential premises, helped the company end the quarter with a net profit at Rs.51 crore, up 34%. But for these, given the 13% decline in net revenue, the company would have actually ended Q4 with a much lower profit. In fact, profit before tax and adding exceptional income of Rs.33 crore, was down 28% at Rs.40 crore; the addition of this asset sale money changed the picture completely.  EBIDTA margin for the quarter stood at 10.6% as against 12.7% (YoY).

The company has two divisions – engines and infrastructure equipments, where the former contributes 90% to the net revenue earned. Infra equipment, though shows an increasing revenue trend continues to remain in losses, going up every quarter. For FY14, the company posted a consolidated net profit at Rs.123 crore, down 17% and this was on a 10% drop in net revenue at Rs.1706 crore.  The company does not anticipate any improvement in the situation in Q1 but it plans to improve its profitability by focusing on reducing costs and improving operational efficiency.