Greaves Cotton Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Greaves Cotton Ltd trades at ₹238, in a confirmed uptrend and 5 weeks into that stage. That is +23.5% against its own 200-day average. It sits at 81% of a 52-week range of ₹127 to ₹264. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 20 straight weeks.

Today the stock is in a confirmed uptrend — week 5 of stage 2, confirmed. At ₹238 it trades +23.5% versus its 200-day average and sits at 81% of its 52-week range (₹127–₹264).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +101% while the NIFTY 500 moved +282% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 20 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Greaves Cotton Ltd trades at 48.2× P/E, mid-range by its own standards (67th percentile). Its long-run median P/E is 30.0×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 48.2× is mid-range by its own standards (67th percentile), against a long-run median of 30.0× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +83.3% against a +9.1% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +8.1%/yr price move, ~+26.8%/yr came from earnings growth and ~−18.7 pp from the multiple (compressing); over 10y, of the +5.2%/yr price move, ~+0.3%/yr came from earnings growth and ~+4.9 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Improving Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Greaves Cotton Ltd reads as improving on its fundamental arc. Improving — EPS growth bottomed 7 quarters ago at −291.6% and has held its recovery at +83.7%, ROCE holding at 7.6%. The read is built from 12 quarters across 3 curves, on partial evidence.

Why it matters: a sustained climb off the trough is the setup this page is built to catch — the question moves to what you pay for it.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

60.7/100 — rank 1 of 4 in Engines · 76% evidence confidence

Greaves Cotton Ltd scores 60.7 out of 100 against the 4 companies it is compared with in Engines, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 27.8 + 2.9 + 10 + 20 = 60.7. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Greaves Cotton Ltd reported ₹1,000 Cr of revenue in the Mar 26 quarter, +21.6% year on year. That is the 6th straight quarter of year-on-year growth. Over 10 years it has compounded at 7.8% a year. The last full year, FY26, came in at ₹3,437 Cr. The last four reported quarters add to ₹3,437 Cr.

FY26 revenue came in at ₹3,437 Cr (+17.8% on the year), capping 10 years at 7.8% compound. The latest quarter (Mar 26) printed ₹1,000 Cr, +21.6% year on year — the 6th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +17.6% growth against the decade's 7.8% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +17.8% over the last 4 quarters against +14.2%/yr over the last 8 — accelerating.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Greaves Cotton Ltd's operating margin is 6.8% in the Mar 26 quarter, +1.3 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 1.5% to 15.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 6.8%, +1.3 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 1.5%–15.0%.

Why the margin moved: operating margin went +1.3 pp year on year while gross margin went −0.6 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Greaves Cotton Ltd earned ₹2.2 Cr of net profit in the Mar 26 quarter, +43.8% year on year. Full-year FY26 profit was ₹35.0 Cr. The 10-year compound rate is −16.0%. That is 0.2% of the quarter's revenue. The same quarter a year earlier earned ₹1.5 Cr. 5 of the last 12 reported quarters were loss-making.

Mar 26 profit was ₹2.2 Cr, +43.8% year on year. On the full year, FY26 printed ₹35.0 Cr (null), and the 10-year compound rate is −16.0%.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 0% of Greaves Cotton Ltd's reported profit arrived as operating cash — a gap worth watching. In FY26 that was ₹33.0 Cr of operating cash against ₹35.0 Cr of profit. After ₹159 Cr of capital spending, ₹−126 Cr was left as free cash.

FY26: operating cash of ₹33.0 Cr against reported profit of ₹35.0 Cr, leaving free cash of ₹−126 Cr after ₹159 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 0% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

🚨 Why conversion sits at 0%: the cash cycle held roughly steady between FY21 and FY26 — so conversion tracks profitability rather than the cycle. Less than 70% of profit arriving as cash is the thing to watch on this page.

Router verdict: the bigger cash user is investment — capital spending ran 2.6× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Greaves Cotton Ltd's cash conversion cycle runs −6 days in FY26, up from −11 days in FY21. Capital spending ran ₹783 Cr over the last 3 years. At FY26 sales of ₹3,437 Cr each day of that cycle holds about ₹9.4 Cr, so roughly ₹−56.0 Cr sits inside the business at any moment.

FY26: debtors at 37 days, inventory at 50 days — roughly 1.6 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −6 days, looser than FY21's −11.

The full loop: cash goes out to suppliers and production on day 0; stock waits 50 days to sell; customers pay about 37 days after that; and suppliers themselves are paid at 92 days — netting out to the −6-day cycle.

In money terms: at FY26 sales of ₹3,437 Cr, each day of the cycle holds about ₹9.4 Cr — so the −6-day loop keeps roughly ₹−56.0 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹783 Cr over the last 3 fiscal years against ₹296 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹64.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Greaves Cotton Ltd earns a ROCE of 10% in FY26. That is up from a trough of −1% in FY22. Return on invested capital clears the cost of that capital by −10.0 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 1.0% net margin on 1.20× asset turns.

FY26 ROCE is 10%, recovered from a FY22 trough of −1% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 1.0% net margin × 1.20× asset turns × 2.00× balance-sheet leverage ≈ 2.4% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 2.0% − 12.0% = a −10.0 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Greaves Cotton Ltd carries total debt of ₹394 Cr against shareholder equity of ₹1,514 Cr as of Mar 26, a debt-to-equity of 0.26 — effectively unlevered. On the annual view that ratio went from 0.34 in FY22 to 0.26 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹394 Cr against shareholder equity of ₹1,514 Cr — a debt-to-equity of 0.26. On the annual view, debt-to-equity went from 0.34 (FY22) to 0.26 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

No holder of Greaves Cotton Ltd moved a full percentage point over the last two years — the register is quiet. Foreign institutions moved +0.2 points over the same window, to 1.4%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: +0.4 points over 8 quarters to 4.2%; Foreign institutions: +0.2 points over 8 quarters to 1.4%; Promoters: −0.1 points over 8 quarters to 55.8%.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Greaves Cotton Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

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