🧠 At a Glance
Greaves Cotton Ltd is an old-school engine manufacturer now pivoting into electric mobility via Ampere scooters. FY25 revenue was ₹2,918 Cr, but net profit was just ₹1.5 Cr. ROE is negative, ROCE is just 5%, and other income (₹56 Cr) kept the lights on. EV dreams are draining the engine cash.
🎬 1. Intro – “From Diesel to Ampere, But Where’s the Juice?”
This is the story of a 165-year-old company trying to go Gen Z.
It made its name building engines and tillers. Then suddenly:
- ⚡ EV scooters via Ampere
- 🔋 Battery partnerships, swapping tech, rare-earth-free motors
- 🧍♂️3 lakh+ retail shareholders
- 🤯 And still, ₹1.5 Cr in profit on ₹2,918 Cr in revenue
So the question is: Is Greaves Cotton India’s Hero Electric — or a hero without horsepower?
⚙️ 2. WTF Do They Even Do? (Business Model)
1) Engine Division (61% of sales)
- Diesel/petrol/CNG engines
- Power tillers, gensets
- Mostly B2B, industrial/agri linked
2) Electric Mobility (via Greaves Electric Mobility Ltd – GEML)
- Ampere scooters
- Swapping infra (Indofast tie-up)
- Rare-earth-free motor JV with Chara Tech
- ₹95 Cr loan converted to equity in GEML (June 2025)
🧪 They’re trying to run a Tesla + Kirloskar hybrid. Spoiler: it’s not efficient.
📊 3. Financials – Profit, Margins, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 2,699 | 2,633 | 2,918 |
| EBITDA Margin | 5% | 3% | 5% |
| Net Profit (₹ Cr) | 70 | -367 | 1.53 |
| ROE | 3.4% | -5.8% | -0.43% |
| ROCE | 9% | 4% | 5.1% |
🟡 Revenue back on track
🔴 Net profit fell off a cliff (FY24) and barely recovered
🛑 ROE/ROCE weak across the board
💰 4. Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹203 |
| Market Cap | ₹4,724 Cr |
| Book Value | ₹60.5 |
| P/B | 3.36x |
| P/E | NA (near-zero earnings) |
🧮 Fair Value based on normalized PAT (assume ₹75–₹100 Cr when GEML turns breakeven)
FV Range = ₹135 – ₹180
(Current price = ₹203 = stretched)
🔥 5. What’s Cooking – News, Events, EV Buzz
- 🚨 FY24 Loss: ₹367 Cr
- ⚡ Ampere Reo 80, Magnus Neo launched
- 🔄 Battery swapping partner: Indofast Energy
- 🧑💼 CEO change: Parag Satpute appointed in Apr 2025
- 🛵 EV mgmt reshuffled again — Vikas Singh now MD of GEML
- 🧪 Rare-earth-free motor tech with Chara Tech
But… EV segment still not profitable.
💀 6. Balance Sheet – How Much Debt, How Many Dreams?
| FY25 Snapshot | ₹ Cr |
|---|---|
| Net Worth | ₹1,405 |
| Total Borrowings | ₹81 |
| Other Income | ₹56 |
| Inventory | ₹632 |
| Cash | ~₹100 Cr est. |
✅ Debt-light
⚠️ Other income > Net Profit
🔋 GEML losses drag consolidated numbers
💵 7. Cash Flow – Sab Number Game Hai
| FY25 Metric | ₹ Cr |
|---|---|
| CFO (Op Cash) | -₹23 |
| Capex (CFI) | ₹50 |
| Financing (CFF) | -₹40 |
| Net Cash Flow | -₹13 |
📉 Negative CFO = ops still bleeding
🎯 Capex is muted — bulk of EV investments already made
🔴 No major dividend payout expected
📈 8. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | -0.43% |
| ROCE | 5.13% |
| Debtor Days | 42 |
| Inventory Days | 62 |
| OPM | 5.6% |
🔴 These are not EV unicorn metrics
🟠 Engines = stable, EV = volatile
📉 9. P&L Breakdown – Show Me the Money
- Revenue: ₹2,918 Cr
- Operating Profit: ₹137 Cr
- Other Income: ₹56 Cr
- Depreciation: ₹103 Cr
- Interest: ₹16 Cr
- Net Profit: ₹1.53 Cr
📌 Operating biz barely breakeven without “other income” crutch
⚔️ 10. Peer Comparison – Engines vs EV vs Confusion
| Company | ROE | OPM | P/E | Market Cap |
|---|---|---|---|---|
| Cummins India | 28% | 20% | 48x | ₹97,543 Cr |
| Elgi Equipments | 20% | 14.9% | 50x | ₹17,632 Cr |
| Kirloskar Oil | 15.6% | 18.8% | 29x | ₹13,335 Cr |
| Shakti Pumps | 42.6% | 23.9% | 28x | ₹11,456 Cr |
| Greaves | -0.4% | 5.6% | — | ₹4,724 Cr |
🛑 Lowest margin, lowest return
❓ Why is it still priced like a mid-cap tech bet?
🧾 11. Misc – Shareholding, Promoters, Retail Crowd?
- Promoters: 55.88%
- FIIs: 2.86% (falling)
- DIIs: 3.31%
- Public: 37.9%
- Retail Shareholders: 3 lakh+
- Dividend Yield: 1%
📌 Looks like a retail-fuelled hope trade
📌 Institutions are cautious
⚖️ 12. EduInvesting Verdict™
Greaves Cotton is in transition.
From diesel engines to Ampere scooters.
From predictable profits to experimental EBITDA.
But here’s the kicker:
- Net profit: ₹1.5 Cr
- Other income: ₹56 Cr
- Still trades at ₹4,700 Cr valuation
EV ambitions are great — but unless GEML turns profitable, this is a mechanical stock running on financial smoke.
🎯 FV Range = ₹135 – ₹180
(assuming GEML breaks even and consolidated PAT grows to ₹75–100 Cr)
📉 CMP = ₹203 = hope priced in
✍️ Written by Prashant | 📅 July 11, 2025
Tags: Greaves Cotton, Ampere EV, GEML, electric scooter India, diesel engine stocks, smallcap EV, EduInvesting, P&L analysis, ROE negative, old-school to EV transition
