Please refer to important disclosures at the end of this report
1
Greaves Cotton (GCL) is a well-diversified engineering company. It manufactures
diesel and petrol engines, gensets, agro equipment and construction equipment.
GCL current revenue mix consists of Auto (50-55%), Aftermarket (20%), Genset
and Farm (12-15%) each. Management highlighted after-market business
continued to do well and grew in double digits during the quarter, led by newl
y
introduced multi-brands spares business. GCL is an established cost-based
leader targeting higher volumes across businesses and expects to reap benefits
of same over next 2-3 years, given management’s focus on expanding product
portfolio. The company is confident of supplying value-added engines to the
OEMs. GCL believe 3W industry is set to recover post demonetization based on
pick up in February. Other positives like robust cash flow generation, cash rich
balance sheet and reasonable yield will cushion against soft topline
performance. The company is virtually debt free. The company has reported a
healthy RoE of 16% for the last 3 years. The company has been maintaining a
healthy dividend payout of 57.73% (Div Yield: 3.43%). Hence Buy.
BUY
CMP `162
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 51.0
MF / Banks / Indian Fls 32.7
FII / NRIs / OCBs 5.4
Indian Public / Others 10.9
Abs. (%) 3m 1yr 3yr
Sensex 8.2 17.6 32.0
Greaves Cotton 27.3 26.5 155.3
52 Week High / Low 169/115
Avg. Daily Volume 55,025
Capital Goods
Market Cap (
`
cr) 3,950
2
BSE Sensex 28,946
Nifty 8,935
Face Value (
`
)
Reuters Code GRVL.BO
0.7
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Greaves Cotton
Others | Capital Goods
March 14, 2017
Greaves Cotton | Capital Goods
March 14, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Greaves Cotton
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15
)