Stock market today: Greaves Cotton share price has been giving stellar return to its shareholders for last one year. However, in last two trade sessions, this multibagger stock has skyrocketed near 37 per cent. In last two days, this engineering company share has shot up from around ₹137 to its 52-week high of ₹238.40 per share levels. Greaves Cotton shares are one of the multibagger stocks in 2021 as the stock price has shot up from ₹94.70 to ₹238.40 apiece levels in last one year, yielding to the tune of near 150 per cent to its shareholders.
The company has been in news after Indian exchanges asking it to clarify on some media reports on Greaves Electric Mobility sells. However, the multibagger stock started giving sharp upside movement after the company informed Indian exchanges about the India Ratings and Research Pvt. Ltd, reaffirming the credit rating for the Fund-based and Non-Fund based working capital limits and commercial papers of the company.
In its communication with BSE dated 29th December 2021, Greaves Cotton informed, “Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform that India Ratings and Research Pvt. Ltd, a SEBI registered Credit Rating Agency has reaffirmed the credit rating for the Fund-based and Non-Fund based working capital limits and Commercial Papers of the Company. Please find enclosed herewith the press release of the Credit Rating Agency in this regard.”
Amid the likely weakening in 3W diesel engine demand in the medium-to-long term as the 3W (3-wheeler) industry shifts further towards cleaner fuel (CNG/electric) and in order to cushion its revenues from the cyclical nature of the automotive industry, GCL (Greaves Cotton Limited) has been proactively diverting its growth focus to non-auto segments, including electric 2W/3W, diesel gen-sets, farm-equipment and marine engines.
The revenue contribution from new businesses increased to 43% in 2QFY22 (FY21: 30%, FY20: 21%). The contribution of its aftermarket and electric mobility segments to the consolidated revenues also increased to 24% and 17%, respectively, in 1HFY22 (1HFY21: 23%, 10%), while the share of the engine segment reduced to 59% (67%). However, the aftermarket segments accounted for a major portion of the EBITDA in 1HFY22. Ind-Ra believes it could take an India Ratings Revises Greaves Cotton’s Outlook to Negative; Affirms ‘IND AA’; CP Affirmed at ‘IND A1+’ Login additional couple of years for GCL to start deriving any material results from this diversification, which has been affected by the COVID-19 related slowdown. This remains a key rating sensitivity.
Expansion in electric mobility
In line with its strategy to invest in advanced clean energy technologies, GCL now holds 100% stake in GEMPL, which is among the top three leading electric two-wheeler (2W) OEMs in India. The company enhanced its presence in the electric three-wheeler (3W) market over FY21-FY22 by acquiring 100% stake in Bestway and 26% stake in MLR Auto Limited. This makes GCL an integrated last mile player.
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