Greaves Cotton

Greaves Cotton is celebrating a turnaround – it posted a net profit of Rs.27 crore for Q2FY15 v/s a net loss of Rs.8 crore in Q2FY14. Net sales was flat at Rs.441 crore and it managed to bring down its operating costs to 90% of sales compared to 92% in previous Q2. Interest cost was down 79% at Rs.25 crore. EBITDA was Rs.56 crore as against Rs.50 crore, for the same period last year. The company had an exceptional cost of 15 crore and PBT, before this outgo was at Rs.49 crore.

The company had two divisions – engines and infrastructure equipments, where the former contributes 90% to the net revenue earned. Infra equipment, though shows an increasing revenue trend has continued to remain in losses, going up every quarter. Thus it is  a very good decision that the company has closed manufacturing of its Construction Equipment due to non-viability of operations on account of continuing losses. It has made provisions arising due to this closure under exceptional items amounting to Rs. 15 crore. Also in previous Q2, the losses were on account of Divestment of one of the step down subsidiaries. During the quarter, the company launched a new range of CPCB II compliant engines and gensets which offer better life cycle cost and performance to the customers. The company is in the process of setting-up a new genset assembly facility at Pune which will enhance its production capacity.