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 ₹192, in a confirmed uptrend and 11 weeks into that stage. That is −0.7% against its own 200-day average. It sits at 48% of a 52-week range of ₹127 to ₹264. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (4 weeks and counting).

Today the stock is in a confirmed uptrend — week 11 of stage 2, confirmed. At ₹192 it trades −0.7% versus its 200-day average and sits at 48% of its 52-week range (₹127–₹264).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +62% while the NIFTY 500 moved +273% — behind the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (4 weeks and counting; last ahead the week of 2026-08-14) — 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.

Story check

Greaves Cotton Ltd's story is not scored yet against the markers our research file set on 19 July 2026. Where it sits in its own cycle: Not stated in the research file. Our fortnightly research layers last read it on 19 July 2026.

Our read, 19 July 2026. Energy and Mobility are improving the core operating mix while GEM losses are falling, but weak multi-year cash conversion and volatile reported profit keep this an execution-led rather than simple valuation case.

What is proven. Energy and Mobility are improving the core operating mix while GEM losses are falling, but weak multi-year cash conversion and volatile reported profit keep this an execution-led rather than simple valuation case.

What is not proven yet. The case improves if Energy and Mobility sustain growth, GEM losses narrow and operating cash flow covers capex without higher debt. It breaks if price pass-through fails, service growth fades, GEM losses persist or cash remains negative while borrowing rises.

🚨 What would change our mind. The case improves if Energy and Mobility sustain growth, GEM losses narrow and operating cash flow covers capex without higher debt. It breaks if price pass-through fails, service growth fades, GEM losses persist or cash remains negative while borrowing rises.

🚨 Layer 1 read, 19 July 2026 — DROP. Operating mix genuinely improving off a breakeven base, but weak multi-year cash conversion keeps it execution-led. The scary trailing PE 50.6 / MoS -75.9% are artifacts of a tiny Rs35 Cr profit off a breakeven base — normalized PE is 21.4 — while the operating engine is really improving: Energy grew 20%, aftermarket 35% and GEM electric losses roughly halved with share rising to 4.4%. What holds it at P2 is cash: over three years OCF-to-PAT was only 0.42 with FCF of minus Rs1238 Cr, so the profit is not converting and the turn is execution-led, not yet self-funding.

What would change Layer 1’s mind. Free cash flow turning non-negative (OCF less capex >= 0 [milestone M3 / C011]) alongside core EBITDA margin moving toward the 13-15% aspiration would prove the turn self-funds and lift toward P1. Conversely GEM losses persisting or price pass-through failing while borrowing rises (per thesis.would_change_my_mind) flips it to DROP.

The test written in advance. The case improves if Energy and Mobility sustain growth, GEM losses narrow and operating cash flow covers capex without higher debt. It breaks if price pass-through fails, service growth fades, GEM losses persist or cash remains negative while borrowing rises. — the thesis as written as stated by the next result.

The test written in advance. Debt-funded cash deterioration — Debt-funded cash deterioration Operating cash flow remains below capex while debt rises. by the next result.

The test written in advance. Profit denominator and valuation distortion — Profit denominator and valuation distortion Operating profit holds while net profit and cash do not convert. by the next result.

What the company does. The core improvement is driven by Energy service integration and Mobility domestic and export mix. GEM is scaling with lower loss per unit, but no profitability timetable is disclosed. Normalized valuation is less demanding than trailing PE, yet cash funding and reported-profit quality are the hard gates.

🚨 What the surface reading misses. The surface reading is: Annual revenue growth was accompanied by faster EBITDA growth. The research reads it further: Management attributes the gap to operating leverage, cost optimization and Mobility mix. Energy service and Mobility growth are the co-movers that must persist.

🚨 What the surface reading misses. The surface reading is: Energy growth and service contribution support a broader earnings engine. The research reads it further: Aftermarket growth and the institutional order corroborate service integration. Recurring service contribution is the quality test.

Lever 1 · Operating leverage — BUILDING. Growth, mix and cost actions are supporting core EBITDA. What proves it keeps working: Core operating leverage. It stops working if Core margin contracts despite positive revenue growth and management cannot bridge input costs to pricing.

Lever 2 · Value-added mix — BUILDING. Diesel, export and GEM volume gains can improve mix if unit losses keep narrowing. What proves it keeps working: Mobility and GEM scaling. It stops working if GEM loss per unit stops improving or Mobility loses its domestic and export supports.

Sources: our stock research file (19 July 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

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

Greaves Cotton Ltd reported ₹974 Cr of revenue in the Jun 26 quarter, +30.7% year on year. That is the 7th 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 ₹3,665 Cr.

Why this happened. Mobility has domestic and export support, while GEM loss reduction has volume and dealer-productivity co-movers. Profitability remains unproven.

FY26 revenue came in at ₹3,437 Cr (+17.8% on the year), capping 10 years at 7.8% compound. The latest quarter (Jun 26) printed ₹974 Cr, +30.7% year on year — the 7th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +21.1% 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 +21.2% over the last 4 quarters against +16.4%/yr over the last 8 — accelerating.

FY26-Q4. revenue ₹1,000 Cr and profit ₹2 Cr as reported.

FY27-Q1. revenue ₹974 Cr and profit ₹6 Cr as reported.

Why-sources: our stock research file (19 July 2026) and the company’s own results for those quarters.

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 5.8% in the Jun 26 quarter, −1.9 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.

Why this happened. Revenue growth supports fixed-cost absorption, while Energy service and Mobility mix corroborate the operating mechanism. Commodity pass-through is the next test.

The latest quarter's operating margin is 5.8%, −1.9 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 −1.9 pp year on year while gross margin went −4.1 pp — the loss came mostly from the gross line: input costs and pricing.

FY26-Q4. revenue ₹1,000 Cr and profit ₹2 Cr as reported.

FY27-Q1. revenue ₹974 Cr and profit ₹6 Cr as reported.

Why-sources: our stock research file (19 July 2026) and the company’s own results for those quarters.

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 ₹6.2 Cr of net profit in the Jun 26 quarter, −70.5% year on year. Full-year FY26 profit was ₹35.0 Cr. The 10-year compound rate is −16.0%. That is 0.6% of the quarter's revenue. The same quarter a year earlier earned ₹20.9 Cr. 4 of the last 12 reported quarters were loss-making.

Jun 26 profit was ₹6.2 Cr, −70.5% year on year. On the full year, FY26 printed ₹35.0 Cr (null), and the 10-year compound rate is −16.0%.

🚨 Why profit moved: revenue contributed +30.7% and the margin −1.9 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit −12.7% vs revenue +21.1%. Profit is growing slower than sales — costs are eating the growth before it reaches the bottom line.

FY26-Q4. revenue ₹1,000 Cr and profit ₹2 Cr as reported.

FY27-Q1. revenue ₹974 Cr and profit ₹6 Cr as reported.

Why-sources: our stock research file (19 July 2026) and the company’s own results for those quarters.

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 −9.9 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: 2.1% − 12.0% = a −9.9 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.

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 45.0× P/E, mid-range by its own standards (58th percentile). Its long-run median P/E is 36.5×, measured across 10.6 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 45.0× is mid-range by its own standards (58th percentile), against a long-run median of 36.5× measured over 10.6 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 −10.8% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +6.3%/yr price move, ~+39.5%/yr came from earnings growth and ~−33.2 pp from the multiple (compressing); over 10y, of the +3.7%/yr price move, ~−4.4%/yr came from earnings growth and ~+8.1 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 unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Mixed 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 mixed on its fundamental arc. Mixed — no clean majority across the growth curves, ROCE holding at 7.6% — the per-curve reads carry the story. The read is built from 12 quarters across 3 curves, on partial evidence.

Why it matters: when the curves disagree, the per-curve reads above matter more than any single verdict.

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

45.2/100 — rank 3 of 4 in Engines · 80% evidence confidence

Greaves Cotton Ltd scores 45.2 out of 100 against the 4 companies it is compared with in Engines, ranking 3. Acceleration candidate, not a confirmed leader: earnings are strong but sector-relative strength is -2.6% and the one-year return is -14.1%. Do not upgrade until sector-relative strength is above zero and another reported period confirms growth.

The four contributions add to the total exactly: 25.8 + 2.8 + 10 + 6.6 = 45.2. 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.

Said versus delivered

What Greaves Cotton Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Core growth target range widened · 5 August 2026. In May 2026, management reaffirmed a medium-term organic growth ambition of 16% to 18%. In Aug 2026, it stated a 16% to 20% CAGR target, raising the upper end by 2 percentage points without explaining the change; this is material to valuation assumptions even though the lower bound is unchanged.

GEML funding route changed without IPO update · 5 August 2026. In Feb and May 2026, management described the IPO as the active funding plan for Greaves Electric Mobility, with timing dependent on market conditions. In Aug 2026, management instead emphasized a completed 531 crore rights issue, including a 331 crore investment by Greaves Cotton, and said the infusion should fund roughly two years, without explaining whether the IPO remains planned or why the rights issue replaced or supplemented it. This creates a material inconsistency for assumptions about parent funding and capital allocation.

Organic Growth Guidance Upper Bound Quietly Reduced · 6 May 2026. In both the Nov 2025 call and the opening remarks of the Feb 2026 call, management cited an organic revenue CAGR target for core businesses of 16% to 20%. The May 2026 call shifted this entirely to 16% to 18%, dropping the upper bound by 2 percentage points with no stated rationale for the reduction.

🚨 E-Powertrain Technology Write-Down Contradicts Prior Active Sales Commentary · 6 May 2026. In the Nov 2025 call, management stated GCL had been commercially selling L3 motors and controllers for several months. By the May 2026 call, management disclosed a 16 crore impairment on e-powertrain technology assets citing failure to scale and unexpected changes in project execution and customer demand, directly contradicting the prior narrative of active commercial sales momentum.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions