Niteen S Dharmawat, Co Founder, Aurum Capital, presented the business analysis of Greaves Cotton Ltd in the Tamilnadu Investors' Association (TIA) 20-20 Summit in Chennai on 18 Feb 2023. Please go through the Disclosure. This is not a buy/sell/hold recommendation. It is the business analysis of the company.

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Niteen S Dharmawat
Co-Founder, Aurum Capital
Website: https://aurumcapital.in
Twitter: @CapitalAurum / @niteen_india
Email: info@aurumcapital.in
Greaves Cotton Ltd…
PEOPLE. PHYGITAL. PROGRESS.
18th Feb 2023

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Important Disclosure:
The information herein is used as per the available sources of bseindia.com/nseindia.com/brokers websites, company’s annual reports &
other public/private database sources. Aurum Capital is not responsible for any discrepancy in the data. Investors should seek advice of
their independent financial advisor prior to taking any investment decision based on this report or for necessary explanation of its
contents.
Future estimates, if any, mentioned herein are personal opinions & views of the analyst. Analyst Name – Niteen S Dharmawat. We are
also registered on the SCORES website. Our Research Analyst Registration Number: INH000008118. Aurum Capital and its Partners do
not have any disciplinary action from any of the regulators.
Readers/attendees/viewers are responsible for all outcomes arising of buying / selling particular scrip/ scrips mentioned here in. This
presentation indicates opinion of the author to understand the company and its business operations and it is not a recommendation
to buy or sell or hold securities. Aurum Capital & its representatives have vested interest in the security/ies at the time of this
publication, and its partners / company have positions / financial interest in the security/ies discussed here.
Aurum Capital, or its associates are not paid or compensated at any point of time, in last 12 months by any way from the companies
mentioned in the report.
Aurum Capital, or its representatives do not have more than 1% of the company’s total shareholding. Analyst ownership of the stock:
No. Aurum Capital’s partner’s ownership of the stock: Yes. Recommendation to client: Yes. Served as a director / employee of
mentioned companies in report: No. Any material conflict of interest at the time of publishing report: No
The views expressed in this post accurately reflect the author’s personal views about any and all of the subject securities or issuers; and
no part of the compensations, if any was, is or will be, directly indirectly, related to specific recommendation or views expressed in the
report.

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Aurum Capital is a SEBI registered Research Analyst (SEBI Registration No:
INH000008118) services company. Started by Jiten Parmar and Niteen
Dharmawat, who together have more than 4 decades of experience investing in
equities and guiding and mentoring fellow investors.
This rich industry background helps us understand companies, complexities of
business and tipping points that make or break a company. Our approach is not
limited to just number crunching but going beyond. We focus on the business,
strategic direction, the competitive landscape, the governance process, the
background of the promoters, turnarounds, to name a few. Often these are more
critical items than just numbers. Jiten and Niteen have successfully waded through
multiple bear and bull market cycles.

4. Twitter - @niteen_india
About Greaves Cotton
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Background…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
 162 years of rich legacy & trust
 One of the leading diversified engineering companies with presence in Automotive, Non-Automotive, Aftermarket,
Retail, Electric mobility solutions & Finance.
 In Automotive segment
 provides wide range of fuel-agnostic powertrain solutions for Diesel, CNG, Petrol powered 3-wheeled
commercial vehicles.
 ventured into last mile personal mobility segment with Ampere Electric for electric 2 wheelers, smaller
electric industrial products and electric 3 wheelers.
 In non-automotive segment
 wide portfolio of products in gensets, farm & application driven industries in marine, light construction &
other industrial applications.
 6 state-of-the-art manufacturing facilities l 500+ Greaves Retail outlets l 6500+ smaller spare parts retail outlets l
15000+ mechanics and 350+ dealer touch points.
 CMP: 132 (17 Feb 2023) 52H/L: 210.8/124.35 Book value: 66.1
 Market Cap: ₹ 3070Cr.; Enterprise Value: ₹ 1825 Cr. Net Debt: Net cash/No debt
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research

5. Twitter - @niteen_india
Business case… (1/2)
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Background…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research
 E-mobility business recorded highest ever primary sales of 14.8K units in the month of Jan’23
 The Company inaugurated its largest EV manufacturing facility and an Experience Centre at Ranipet, Tamil
Nadu. This will herald a new fast-paced growth for EV segment.
 New EV Battery safety norms of Phase 1 and Phase 2 had some headwinds on revenues. The company has
moved well past this.
 EBITDA margins are higher in E 2-W and E 3-W should improve EBITDA with increasing volumes
 Greaves Retail - a one-stop shop for all customer needs in the mobility ecosystem.
 Customer retention of over 50% has been a major contributing factor for the growth
 Greaves Finance initiated for tech-enabled financing for electric vehicles with deep understanding of asset
risk.

6. Twitter - @niteen_india
Business case… (2/2)
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Background…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research
 Play on the EV space in India.
 Overall monthly sales-wise now at 6th in the Indian market
 Decent base in EV 2-W segment and looking to expand to EV 3-W space. These are the two spaces within the EV gambit
where we are more positive and where we believe there has been and will be the fastest adoption.
 Government stopped giving FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme subsidy to Hero Electric and
Okinawa as they didn't meet 50% domestic norms. Now they are selling at substantial premium than they were till Dec 2022.
Greaves continue to get subsidy and likely to get higher market share.
 Acquired Bestway Agencies Pvt Ltd which sells e-Rickshaws under the ELE brand to expand into EV 3-W space
 To acquire 100% stake in Excel Controlinkage Pvt Ltd at INR 385Crs. Excel Controlinkage is India’s leading manufacturer of motion
control systems with integrated capabilities to manufacture Push Pull Cables, Levers & Sensors. It would also give a push to its EV
ecosystem.
 Saudi Arabia-based family-owned, Abdul Latif Jameel Capital has invested USD 220 million in GEM (Greaves Electric Mobility) for
36% stake. This deal itself values the GEM subsidiary at upwards of 3000 crore which is close to the total company’s market cap.

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Corporate Structure
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Background…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research
 Electric Mobility: 46%
 Powertrain + Retail: 54%

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Electric Mobility Product Range
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2W
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research

FY22 AR
 New business initiatives
contributed 49% of the
total consolidated
revenue for FY 2021-22.

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Electric Mobility Product Range
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3W
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research

Q3FY23 updates
 Unveiled six new 2W & 3W
EVs catering to diverse
consumer segments and
price points
 Bookings open for Ampere
Primus

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Manufacturing footprint
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Background…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research

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Stagnant stock price
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8 years+…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research, Google chart

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Performance stuck too…
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8 years+…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research, Google chart

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Strong Balance sheet…
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No equity dilution + Buy backs+ Expanded Fas + Cash…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research, Google chart

14. Twitter - @niteen_india
Cashflow from Operations…
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So far so good…
This is a case study to understand business and not a stock recommendation
We own this stock and we may exit too without any notice
Source: The company announcements, Annual Reports/Quarterly results, publically available data, Aurum Capital research, Google chart
Narration Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
CFO 107.84 155.47 225.10 230.11 114.43 279.62 145.34 101.63 146.80 -62.78
Net profit 148.02 123.40 83.63 200.88 180.66 202.19 164.71 129.17 -18.78 -35.30

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Key Committees and Auditors
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Independent and Top Class…
Audit Committee
Nomination and Remuneration Committee


 Statutory Auditor:
• Deloitte Haskins & Sells LLP
 Internal Auditor:
• Ernst & Young LLP

Source: The company announcements, Annual Reports/Quarterly results, Red Herring Prospectus, publically available data

16. Twitter - @niteen_india
Risks
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& Mitigation…
 Regulatory Risks:
o The electric mobility business is dependent on subsidies, and any significant delay in receiving them could
impact the credit profile of the company.
o Both electric mobility and the conventional diesel auto industry are subject to regulatory changes which
could impact the company’s revenue in case of any adverse regulatory changes.
 War escalation can hit supplies of major raw materials
 Continuous increase in raw material cost could impact profitability of the company
 Powertrain business has increased competitive environment especially in agriculture and marine segment this is
due to non-availability of large range of engines of >700 HP
 Greaves Electric Mobility (GEM)
o Risk of technology change or adoption in medium and long-term
o Risk of competitiveness in multi-brand parts
o Risk of missing operating cash flows considering the fast growth in EV segment
 Greaves Finance
o Risk of lower realization of value in case of NPAs.

17. Twitter - @niteen_india
Thank you
Email: info@aurumcapital.in
Twitter: @niteen_india
@CapitalAurum
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