Ladies and gentlemen, welcome to Greaves Cotton Limited Q2 and H1 FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kale, Head, Investor Relations, Greaves Cotton Limited. Thank you, and over to you, sir.
Thank you, Iqra. Good afternoon, ladies and gentlemen, and a very warm welcome to Greaves Cotton's Q2 FY 2027 earnings conference call. The financial results and the investor presentation for the quarter ended 30th September 2026 have been filed with the stock exchanges and are also available on the company's website. I hope you had an opportunity to review them. From the management team today, we have with us Mr. Parag Satpute, MD and Group CEO, Mr. Vikas Singh, MD of Greaves Electric Mobility Limited, and Mr. Manish Poddar, Group CFO.
We will begin with opening remarks from the management, following which we will open the floor for questions. Before we begin, a brief disclaimer. Today's discussion may contain certain forward-looking statements relating to the company's business prospects, strategy, and financial performance. These statements are subject to risks and uncertainties, and actual results may differ materially. We request participants to refer to the disclaimer included in the investor presentation. I will now hand over the call to Parag to take us through the performance of the company and the progress on our strategic priorities. Over to you, Parag.
Thank you, Ashish, and good afternoon, everyone, and thank you for joining us today. Quarter two has been another quarter of strong business momentum, and we see continued progress in the execution of our strategy named GREAVES.NEXT. Let me begin with three key messages for this quarter. The first one, we delivered a strong revenue growth across our businesses, and we see very encouraging momentum in all key growth segments. Secondly, we continue to advance GREAVES.
NEXT with tangible progress in new products, engineering capabilities, international expansion, and strengthening of our business platforms. Thirdly, while our growth momentum remains strong, profitability continued to face pressure from rising input costs. The corrective actions we had initiated started showing results, but continued cost inflation has offset some of these gains. I can assure you that improving profitability remains an an important management priority. Now, let me begin with the headline numbers.
At a consolidated level, we recorded a revenue of INR 1,176 crores, representing a year-on-year growth of 44%. For the first half of this year, consolidated revenue came in at INR 2,150 crores, which is 38% growth. Importantly, our core businesses continue to demonstrate strong momentum, growing 24% year-on-year in quarter two and 20% during the first half. This represents an acceleration from the growth we reported in quarter one and therefore reinforces our confidence in the underlying strength of our business.
As I've shared in earlier calls, GREAVES.NEXT is about building on our strong engineering and manufacturing heritage to create a more diversified and a technology-led Greaves. Our focus has been on accelerating the core businesses, building new capabilities, and creating additional avenues for sustainable growth. I'm happy to say we are now seeing these priorities translate into tangible business outcomes. Let me take you through the performance of the three core business segments. As usual, I'll start with energy solutions.
This business continued its strong growth momentum, and we saw a healthy demand across infrastructure, manufacturing, commercial, and industrial applications. During this quarter, energy solutions grew 36% year-on-year compared with the 21% growth in the previous quarter. One of our strategic priorities within this business has been to strengthen our position in the medium to high horsepower genset market. I'm very pleased to share that our medium horsepower, which we call MHP genset portfolio, covering the 160- 750 KVA range, grew 35% during the first half of FY 2027 compared to a 28% growth of the overall business.
This is encouraging as it demonstrates the traction we are gaining in the market segments where we have deliberately chosen to strengthen our presence. International expansion is another priority for this business, and during this quarter, we completed the first batch of enhanced gensets developed for a key market in the Middle East. This is again a tangible step forward, and we will build on our export presence to strengthen our ability to serve international customers. Overall, we remain positive about the opportunity in energy solutions.
Our focus will be on sustaining this growth, continuing to strengthen our competitive position, and building a larger domestic and international business. Moving on to mobility solutions. Here, our strategy is to leverage our established OEM relationship and our engineering capabilities. We believe different powertrain technologies will coexist for the foreseeable future. Our approach, therefore, to remain competitive in existing applications while developing capabilities required for new technologies.
Along these lines, our automotive engine business delivered another strong quarter, growing 37% year-on-year, supported by healthy demand across three-wheeler and four-wheeler applications. During this quarter, we also launched a new 470cc diesel engine for three-wheeler applications, further strengthening our product offering. I will now turn to engineered components within our mobility solution space, the company that you know as Excel Controlinkage. Excel delivered a very strong quarter with a 30% year-on-year growth.
This is supported by new product orders and new customer wins. This follows the return to growth we reported already in Q1 and reflects the progress being made in strengthening the business. During this quarter, we completed the acquisition of 20% of the stake in Excel, now making it a wholly owned subsidiary of Greaves Cotton. As we have outlined in GREAVES.NEXT, we see a significant opportunity to build a stronger automotive components business. Our strategy here is to progressively move up the value chain from individual components, such as control cables, towards more high value-added assemblies and integrated engineering solutions.
Excel provides us with an established platform, strong customer relationships, and the engineering capabilities to pursue this opportunity. We intend to build on this foundation through organic growth, deeper customer engagement, and selective opportunities to broaden our capabilities. Overall, mobility solutions grew 23% year-on-year during Q2, compared with the 18% in Q1. I will move to industrial solutions now. The reported revenue here remained broadly flat year-on-year during the quarter.
However, if you remember, we had taken some portfolio rationalization decisions earlier. If you adjust for that, the business delivered a 9% like-for-like growth. Our focus on industrial solutions is to strengthen the portfolio through differentiated products and specialized applications and selective international opportunities. During this quarter, therefore, we launched a new 750 HP firefighting engine and unveiled prototypes for a 160cc gasoline engine. These developments reflect our ongoing efforts to broaden the product portfolio and get into new customer applications.
We see opportunities in segments where reliability, durability, and engineering precision are very important and where our manufacturing and product development capabilities can provide us a competitive edge. We will continue to focus on these priorities. That was the business segments. Let me talk now about profitability. While we are encouraged by the strong revenue growth across our business, margins remained under pressure during the quarter.
As we discussed in our previous call, we had initiated a series of actions covering pricing, cost optimization, and operating efficiency to address the impact of rising input costs. These actions have started delivering results, particularly on the pricing front. However, commodity and other input costs have continued to rise, offsetting some of these gains, and therefore, the improvement in margins has been slower than we had anticipated. We are responding to this, and we continue to focus on pricing discipline, value engineering, and productivity improvements, along with tight cost management.
At the same time, we are maintaining a clear distinction between costs that can be optimized and investments that are essential for our future competitiveness. As we move into the second half of the year, improving profitability and converting our strong revenue growth into better operating earnings will be a key management priority. We believe the actions we are taking are directionally right, and we remain focused on accelerating their impact while navigating the evolving cost environment.
Our CFO, Manish, will provide further details on the financial performance and margin improvement initiatives along the way. Let me briefly touch upon the investee businesses. Greaves Electric Mobility and Greaves Finance remain important components of our broader portfolio and our ambition to participate in the evolving mobility ecosystem. During the quarter, we completed the investment in Greaves Electric Mobility that we had discussed in our previous call. Our focus remains on supporting the development of this business while maintaining discipline around capital allocation and long-term value creation.
Vikas will take you through the performance of Greaves Electric Mobility in greater detail soon. Now, let me step back a little bit from these quarterly numbers and share a few thoughts on the broader progress of our strategy, GREAVES.NEXT. When we embarked on this transformation, our ambition was to build on Greaves' strong industrial and engineering heritage while repositioning the group for opportunities emerging in energy and mobility.
We recognized that this would require not just a sharper business strategy, but also new capabilities, stronger leadership, improved execution, and a more outward-looking organization. Over the past several quarters, we have made significant progress in putting these foundations in place. What is particularly encouraging now is that we are beginning to see these efforts translate into tangible business outcomes. Across the businesses, the common theme is clear.
We are progressing, increasing the engineering content, differentiation, and value addition in our portfolio. Touching upon capital allocation then. Like I said, we completed investments in Greaves Electric Mobility and acquired the remaining stake in Excel Controlinkage. Both of these investments are very well-aligned with our strategic priorities. At the same time, we continue to evaluate opportunities to strengthen our business portfolio through partnerships and selective inorganic growth. Our approach to these opportunities will remain disciplined.
We will focus on businesses and capabilities that are strategically relevant, which will complement our strengths and offer potential for sustainable returns. We are very conscious that long-term shareholder value is created not simply through growth, but through quality of the growth and the returns generated on the capital deployed. This will remain an important consideration as we take GREAVES.NEXT forward. We remain committed to executing on this agenda with speed and simplicity and the discipline that underpins GREAVES.NEXT.
With that, I complete the update on the Greaves core business. I will now hand over to Vikas, who will take you through the performance of Greaves Electric Mobility. Over to you, Vikas.
Thank you, Parag. Good evening, everyone. Once again, thank you very much for joining us today. It's a pleasure to be sharing the results of Greaves Electric Mobility on behalf of the team with you. I'm pleased to share that the momentum at Greaves Electric Mobility continues to build, with each quarter setting a new benchmark. Quarter two FY 2027 was our highest ever quarter for volumes and also on top line across both our E2W and our L5 three-wheeler businesses.
E2W businesses recorded volumes of over 37,000 units with 114% year-on-year growth for quarter two FY 2027, while the L5 three-wheeler business recorded nearly 2,800 units at 61% year-on-year growth. Let me begin with sharing some of the updates on the key drivers of our record volume numbers before moving into the financials. In the electric two-wheeler segment, our registration volumes on Vahan also doubled and grew at 107% year-on-year in H1 2027 over 2026 to almost about 53,700 units.
Our H1 billing volumes reached almost 91% of our full year 2026 volumes, in this period. Our market share improved to 4.8% in H1 2027 versus 4.1% in H1 2026, with a peak market share of 5.6% in June 2026. As you can see, there has been a steady and continuous buildup in share as we keep going along. We have established pockets of market leadership in certain highly challenging markets.
We are a top two player in Tamil Nadu and Bihar for quarter two 2027, and ranking number one in Bihar at about an 18% share and number two in Tamil Nadu at about 15% share, while also having a 7% + share for Southern and Eastern markets, which contribute to just about half of the overall industry volumes. Beyond this, very importantly, we rank amongst the top three E2W players in about 55% of the RTOs that we serve, and have on top of this, gained share year-on-year in over 60% of the RTOs that we serve.
So once again, as per plan, well on course to building share in a sustained and steady basis. This growth has been driven by several key initiatives: network, alternate channels, new product introductions, and building on the low-speed segment growth. Our network is growing rapidly, both in terms of number of dealers, as well as the average throughput per dealer. In H1 2027, we issued LOIs for 160 new dealerships, while the existing dealers also opened nearly 20 new branches. Very importantly, again, dealer throughput has improved by almost 40% year-on-year per dealer, from 18 to 25 units per month.
Our B2B volumes also grew 18% year-on-year in H1, with multiple new fleet accounts reducing our dependence on any single customer. We have also ramped up our presence on e-commerce platforms, which have helped drive almost three times the volume growth over the same period last year. In the slow-speed segment, Reo VYB has been well received by customers as a safe and reliable option and has played a critical role in our growth journey.
Alongside the core scooter business, we have built additional levers for revenue and margins through the introduction of IoT solutions on our products and various accessories, which are generating significantly higher margins while driving incremental realizations. In our L5 three-wheeler business too, quarter two was our highest ever quarter, with a billing of about 2,800 units, up 61% year-on-year, whereas Vahan registrations increased by 74% year-on-year. Our focus now firmly relies in strengthening our network in northern and eastern regions, where the largest share of the EV industry volumes currently reside.
With this, I now move on to our financials. Our consolidated revenue in H1 2027 is at almost INR 680 crores versus INR 335 crores same time last year. Our two-wheeler revenue in Q2 moved up 134% year-on-year and was at INR 350 crores. Our L5 three-wheeler revenue moved up 55% year-on-year and was at almost INR 60 crores. At an H1 level, console, we are growing at almost about 103% with 113% plus growth in the two-wheeler segment. The increased scale benefits are flowing through to our bottom line, as evident from our unit economics trajectory.
Our average realization in E2W for the quarter improved by INR 5,000 to roughly about INR 93,000 per unit, without any compromise on our volumes. Our EBITDA losses per unit in two-wheeler have come down by 70% in Q2, from roughly about INR 20,000 per unit to less than INR 6,300 per unit, indicating a strong and quick path to profitability. Our EBITDA margins in E2W have also come down. Our EBITDA losses have significantly come down from roughly about -24% in Q2 2026 last year, to - 7% in Q2 this year.
Our overall cash burn for the E2W business has touched a record low single digit per month, and we expect that to break even fairly soon. On the technology front, our R&D team has secured a design registration for the new ferrite-assisted synchronous reluctance motor we developed in-house. This is essentially a rare-earth-element-free motor. This motor architecture, besides using no rare-earth magnetic material, also lowers our dependence on imported rare-earth minerals from China and deepens the localization of our powertrain.
Deployment will begin with our two-wheeler portfolio very soon, followed through with new product introductions in Q4 2027. We have also upgraded our scooters with new performance and technology features under Intellipack, our connectivity suite. The new upgraded Nexus EX+ comes with a more powerful 5 kW motor with high upgradability, along with Intellipack. The Magnus G-Max with Intellipack offers over 30 + connected features through the Ampere Connect app, including cruise control, hill hold assist, find my scooter, turn-by-turn navigation, and remote vehicle diagnostics.
Together, these vehicles make our scooters durable, reliable, and technology forward for all terrains and weather conditions that India has to offer. On the brand front, we embarked on an ultimate endurance ride with the all-new Magnus G-Max. The vehicle covered 4,400+ km from Dong Valley in Arunachal Pradesh in the east to Guhar Moti in Gujarat, validating the superior reliability, durability, and technology of the product. We amplified the product campaigns with print advertising in key markets and with outdoor support and digital campaigns, garnering over 3 million views on social media.
in September 2026, Ampere also recorded its highest ever brand searches, up 23.6% above August 2026. Very importantly, this culminated in our website traffic nearly doubling from H1 last year to H1 this year, from 1.1 million to 2.1 million per year. Finally, our scooters continue to earn recognitions. The G-Max was named Family Scooter of the Year 2026 at the Times Drive Auto Summit Awards, and we are proud to offer award-winning electric scooters to our Indian customers. Our vehicles are truly built for Bharat.
We remain committed to profitable and sustainable growth and to building an electric mobility company that delivers lasting value for all our stakeholders. Thank you.
Okay. Thank you, Vikas. Hi, this is Manish Poddar. Good evening, everybody. On the financial performance, I will quickly just run you through. On the consolidated basis, our revenue increased 44% YoY from INR 1,176 crores to INR 815 crores in Q2. Correspondingly, for H1, consolidated revenue stood at INR 2,150 crores, a 38% increase over INR 1,561 crores corresponding period last year. EBITDA margin also showed robust growth of 43% year-over-year, despite commodity pressures through H1 this year.
On quarter-over-quarter basis, we improved EBITDA margin marginally from 5.8% in Q1 to 6.2% in Q2 on a consolidated basis. For our core business, we reported INR 768 crores of revenue, compared to INR 621 crores earlier last year, representing a 24% increase. Similarly, for H1, we grew at 20%, INR 1,478 crores compared to INR 1,233 crores. Greaves Electric Mobility on a consolidated basis also reported INR 410 crore revenue, up 106% versus INR 199 crores last year, quarter two. On margins, the impact of commodity inflation and lag in passing on to the higher cost continued in Q2.
We began implementing price increases in parts for the business during the quarter and shall continue through the rest of the year. However, pricing arrangements in B2B/OEM ecosystem typically operate with a lag. We therefore expect the full company-wide benefit of these actions to be reflected by Q4 of FY 2027. Alongside pricing increase, we have intensified our cost optimization value engineering programs to support profitability. Reflecting these pressures, core business EBITDA margin was at 11.5% in Q2 compared to 14.8% a year ago.
In EV business, stronger scale has translated into marked improvement in operating performance. In absolute terms, despite the revenue doubling, its absolute EBITDA narrowed to a loss of INR 25 crores, compared to INR -42 crores last year. We also recognized certain exceptional non-recurring expenses in Q2 of financial year 2027 that affected reported profits before tax. Following a further review of the brands, goodwill, and other intangible assets, we accelerated amortization of relevant intangible assets and recognized impairment charges against carrying value of brands and goodwill.
We also had a one-off expense charge linked to the planned IPO for GEML. The resulting impact on GCL's consolidated financial statements comprised INR 27 crores of accelerated depreciation and INR 33 crores of exceptional item. Kindly refer slide number 34 for further details and notes to the published accounts. Moving on to the capital allocation. We invested INR 301 crores in GEML's rights issue, and we invested INR 112 crores to acquire the balance 20% stake at Excel Controlinkage.
On investor disclosures, we earlier introduced revised segment, a separate core business profit and loss statement, a three-year revenue bridge, and a separate disclosure on the conventional three-wheeler diesel engine business in Q1. Starting this quarter, we are also providing additional operational and financial information on GEML, along with the select indicators for the core business. We continue to be guided by the investor feedback to enhance disclosures to enable better understanding of our business. With this, I hand over back to Iqra, our moderator.
Thank you very much, sir. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Deepak Ajmera from Elpro International Limited. Please go ahead.
Yeah. Hello, am I audible?
Yes, you are.
Yes, you are audible.
Yeah. Thank you for the opportunity. I have a question on the Greaves Electric Mobility side. Though we have a very less utilization currently, on an average monthly volume basis, how much capacity do we have and at what level do you see breakeven could happen in terms of the volume?
Yeah. Hi. Our monthly capacity is ballpark at about 40,000 per month. At this point in time, our utilization is now reaching about 40%. We would expect, at the rate the volumes are moving, this capacity to cover us for the next couple of years ahead. At these existing volumes, in terms of the latest growth month-on-month, we would expect breakeven to happen fairly soon. Not in a position to give you an exact timeline, but we are running ahead of plan, and versus whatever we had planned in the past, we should be looking at breakeven numbers significantly ahead from a time horizon point of view. Hope that addresses your question.
Okay, got it. Could you please share any expected timeline for the GEML IPO?
Once again, this is a conversation which is underway with the IPO committee. We are constantly scanning the markets. We are scanning in terms of how the overall trajectory is likely to move on enterprise valuation. At this point in time, with the rights equity being completely subscribed to, we are well funded. We would choose the right time on when to go for the IPO, hence no definite date at this point in time being stated on this account. Thank you.
Thank you. Thank you for the question.
Thank you. Next question is from the line of Navid Virani from Bastion Research. Please go ahead.
Hello, am I audible?
Yes.
Yes, please.
Yeah, hi, team. Thank you for the opportunity and also for the updated presentation. Very helpful data points there. First question is regarding the commodity pressure that you alluded to in your opening remarks. So two parts to it. First one, can you please call out what are these top three commodities which are putting pressure that way? Second one is, what do you think will be steady state gross margins? If you can give an assessment of that would be helpful.
Can you please repeat the first question? We didn't get.
Yeah. The first question is, can you call out those top two, three commodities which are putting pressure right now?
Sure. Aluminum, iron, copper, PGM, the platinum group of metals are the three, four broad buckets, which is made for the engines, as in, and the gensets. That's where the commodity impact is being faced and impacted to the company. On a steady state basis, I think, and GREAVES.NEXT, we have mentioned 13%-15% of EBITDA margin. On a mid to long term basis, we absolutely are committed to that, and I think last time I referred that H2 will be better than H1 on the margin side. There's no reason for us to deviate from that at this stage.
Perfect. Thank you for that, for clarity. My second question is to Vikas, sir. In this E2W business, we saw a solid improvement in the loss per vehicle that we were witnessing. I just want to understand, is there any abnormal component that you may want to call out here, or are these gains sustainable in your view?
Well, the usual pressures from commodity pricing, etc. , continue. They apply to our sector also. However, it is important for us to ensure that from a product and pricing strategy and also a market penetration strategy, we are able to design product solutions and pricing propositions which allow us to mitigate this risk and also reduce the loss per unit. I think these have been working extremely well for us, and that is the reason why on a continuous and consistent basis, quarter on quarter, our loss per unit has been falling sharply, and we expect this trajectory to continue.
Unless, of course, there is something force majeure that one can't plan for.
Thanks.
Okay.
One more question, if I may. I mean, correct me if I'm wrong, but we were the industry stalwarts when it came to switching the 100% portfolio to LFP batteries. I think there is another good development that we are seeing in the motor front here, which we are trying to develop, or we have developed rather. Do you think that gives us a heads up better than the peers? I mean, headstart better than the peers, is that the right way to look at it or no?
I'm sorry. Can you repeat the last bit of your question? Heads up? I missed that.
I just want to understand that this innovative material that we have developed in-house, does that give us a headstart which is better than peers, or it is normal development as I said?
Well, I wouldn't want to comment on peers on this call, but the one thing I can tell you is that the new motor from a performance metrics point of view, beats the traditional ferrite magnet, ferrite, sorry, rare earth motor on all counts. And we also have a cost optimization coming through as a function of the design. So you have a performance improvement, and you also have a cost reduction. And we would be looking to this going operational very soon, like I said. So this would be another big plus for us as far as we are concerned.
Okay. Thank you for answering all my questions. That is it from my side.
Thank you. Next question is from the line of Ankur Maheshwari from Old Rice Invest . Please go ahead.
Yeah. Hi. Thanks for the opportunity. Since there is a scarcity or the limited supply available from the other players in the industry, and we are like the sales data is around 10,000 vehicle per month. Our capacity is like utilization is lower, so can't we press the pedal on the more sales and encased this opportunity by expanding it further?
Yeah. Thank you. Thank you for the question. If you see the way the volumes are moving every quarter and with the 100% growth year-on-year, which translates into 100% growth of quarter-on-quarter over the same time last year, I can firmly assure you that the pedal is fully pressed on what best can happen. We are very confident that we should be able to meet demand through capacity expansion, the complete demand through capacity expansion very soon. Thank you.
Yeah. On the price increase side, is INR 5,000 enough, or going forward we will increase more?
I think, again, this is a fairly dynamic situation, so you need to get the best balance of price, margin, and volume. That is something that we keep scanning the market for. Enhancing product propositions like we've done with the Intellipack, the new IoT solution, more powerful motors, higher capacity batteries, allows us to leverage a better pricing premium. So it is a combination of product features, priorities, volumes, etc. On the basis of which pricing decisions are taken. We obviously will keep scanning for the same as appropriate. Thank you.
Got it. Last question from my side in case I can switch. What we are doing to increase the brand perception or the branding, let's say it?
We are investing significantly in creating awareness, creating touch points. Our entire positioning is built for Bharat. We are very clearly and firmly placed in the value segment. We believe the target market is clearly the combustion scooters and motorcycles, and our proposition therefore addresses this entire segment. You may remember in my update, I also mentioned as a function of all the investments that we are making, the search volumes have doubled versus same time last year. Search is a lead indicator in terms of potential demand coming in.
If the search has doubled, the volumes are doubling, and by and large, all other metrics are tracking in the right direction. I would believe from a brand point of view also, we are firmly in the consideration set. As long as we keep expanding footprint, product portfolio, are competitive, have good product propositions, I think directionally we should be tracking well. Thank you.
Thank you.
Thank you. Next question is from the line of Anubhav Mukherjee from Prescient Capital. Please go ahead.
Hello, am I audible?
Yes, you are audible.
Thanks for the opportunity. Sir, my first question is, compared to our 38% growth in the GenSet business, how has the MHP segment grown? Have we increased our market share or our growth has been in line with the industry? Some color on that, yeah.
No, thank you for your question and also happy that you picked up on this very specific point, because in our strategy in GREAVES.NEXT, we have said that we believe our MHP portfolio is very strong and we want to double down and increase our share. Our MHP segment actually for the first half of this year has grown by 35%, while the overall energy solutions business for the first half grew by 25%, 28%. As a consequence of that, our market share has also increased. Confirming what you asked, we are focusing on that and as a consequence, we are seeing an increase in market share.
Great. In this MHP segment from 160- 750 KVA that you focus on, is your product portfolio complete or are there certain gaps and you are launching products at certain nodes to fill that gap? Again, some details on that will be useful.
Our product portfolio in what we call MHP today and which I state is complete, we have a full range of products. What we have been doing is trying to expand that upwards. The upper end of the MHP which is HHP up from 625 to 650 we launched a couple of quarters ago. MHP is fully complete, not just the GenSet itself but also our whole solution including aftermarket.
Get that. In the GenSet business, is the field entirely domestic or do we export? Is there a focus on increasing export? Have you identified certain markets? Yeah.
Yes. Now again, coming back to what I have stated in previous calls in my strategy. Today the bulk of our business is domestic, but we have identified the Middle East and Africa as our focus markets. Of course, we need to upgrade, enhance our products to fit the application conditions there. Like I said in my opening remarks, we have been working on that product enhancement. During this quarter actually, we shipped our first batch of gensets to the Middle East to a very key market and that marks a step forward.
Obviously, we have also set up an entity in the Middle East. I talked about that during my last quarterly call. We are not only building a sales team there, but we are also building capability to service the products.
Get that. In the mobility solution business, exports have declined 4% in H1. Can you explain the reason for that and what is our focus area in adding more OEMs and growing the export business? Yeah.
Right. I wouldn't say exports have declined. They have kind of remained flat, but the domestic business has grown faster. We have seen a very strong tailwind in the commercial vehicle industry in India, both in the three-wheeler as well as the heavy commercial vehicle. That part of the business grew much faster and therefore export contribution has slightly reduced. Other than that, we see that the export business is resilient and sustainable. We continue to be the sole suppliers to our customer, Ligier, for the engines for their microcars.
We are seeing good progress now in exports of auto components through the Excel business portfolio.
Anubhav, just to add to this, I think in auto, being B2B primarily, you'll see the growth not being linear in exports. You'll see more on the steps as you get the new acquisitions and key account management. I think that's where it's an important piece for us to understand the growth trajectory as we expect in the long term.
Thanks for the clarification. Getting some clarity, is the exports mainly to the French OEM only or are we looking to add or have we added any other OEM?
For the engines business, our largest customer is the French OEM. There are a number of discussions, some at advanced stages for engines. Apart from engines, like I mentioned, Excel also supplies auto components and marine components to multiple customers in Europe, as well as other parts of the world.
Get that. In the domestic engine business, apart from diesel engines, do we supply petrol engines, and how large is that? Is there a focus to grow that business? Any new segment you are adding?
Yes. If you look at our domestic auto business, which is focused on the three-wheelers, lion's share or the largest part is diesel engines. That's how the market is. In our product portfolio, we also have CNG engines, and we have some business with that. That continues to be a small part of the portfolio. Also, we do not see the overall fuel mix; we do not see that CNG is growing dramatically. We see that the share is remaining stable. I would say in this quarter, we saw a very strong demand for the core engines, which is the diesel engines for three-wheelers.
Okay, get that. In the industrial solution business, can you share what are the top four, five applications for you for the engines?
I can share that, and I think I have commented on this on previous calls. One of the very interesting applications where we have a very strong position is the firefighting engines. Engines for firefighting pumps, where we have a very strong position in domestic market, and we have started to make some strides in international business. That is number one. Then we have a set of products for the marine industry, which is largely sold in India. That is also quite resilient. We sell our engines into agriculture segment, where they are used for power tillers or for pumps in the agricultural segments.
Then, of course, into the multiple applications in the small construction equipment. I would say those would be the four top application areas.
Get that. The industrial solutions business has slightly flattened or de-grown in H1. Given construction equipment sales and all have been quite strong, what has led to flat kind of revenues?
It has grown by 9%. See, actually, what you should look at, last year, we took a decision to exit farm equipment business. We were making not just the engines, but equipment also, which were going into the domestic farming sector. We realized that is a very competitive space also being impacted significantly from imports from China. So we took a strategic decision to exit that market. When you compare last year numbers to this year, there is the farm equipment business in the last year's numbers. If you take that out, then that business, like for like, has grown by 9%.
By the way, this could grow further, and that is why we are focusing going forward onto new applications.
Can you elaborate, what are some new applications that we are looking at? Is export a focus area in this segment as well?
If you look at that area, new applications and export, firefighting engines is a very important segment we have identified. Globally, the FM UL certification is a very key differentiator, and there are very few companies in the world who have that. We have got our product portfolio certified for that, and we are now in advanced discussion with multiple global customers. We expect that to be a focus area. In that space, we also launched a new product this quarter, the 750 HP firefighting engine, and that will help to grow the business. That is one focus area.
The other area is, under the GREAVES.NEXT strategy, we have decided to get into the small 80cc and 160cc gasoline engines. During this quarter, we unveiled our first prototype of the 160cc gasoline engine, and our dealers through which we sell, our channel partners, were very excited and positive about the product itself and the potential applications there.
Get that. Thanks. This is very useful. My final question is, for this core business, the margin shrinkage that we have seen year-on-year. Can you give some more color on, of these three segments, which is facing more margin pressure and what are the steps being taken?
I am so sorry to interrupt. Anubhav, you may please rejoin the queue for more questions.
Okay. Thanks.
Thank you. Next question is from the line of Tushar Bohra from MK Ventures. Please go ahead.
Yeah. Thank you for the opportunity. Sir, my first question is, let's say compared to our competitors in the core engineering business, let's say taking Cummins India and Kirloskar Oil Engines as a reference point. Where are we vis-à-vis them in terms of the product range penetration in key segments? Wherever they are present and leaders, what are the steps we are taking to increase our market share and grow faster than the industry? While you mentioned a lot of initiatives across the overall portfolio, but specifically keeping these two as a competition in mind, if you can just highlight these specific segments.
Hi, Tushar. Good to have your question. Coming to what you are addressing, yes, we have recognized that we have certain strong areas and we want to double down on those. I was answering one of the previous participants about our strength in the MHP and how our focus there has helped to increase our market share there. That is definitely going to continue to be our focus. We have also started to expand our range in the high horsepower. Again, I mentioned that. Just two quarters ago, we launched a 625 and 650 KVA, and we are starting to see good progress on that.
So we will continue to work in this way. Some engines we are developing internally. In the very high horsepower range, we have got a strong strategic partner who supplies us the engines, and we continue to partner with them so as to offer a complete product program to our channel partners and our customers.
Sir, my second question, sir, is that over the last six quarters or so, since you have taken over, we have seen a lot of strategic changes. Obviously, we have strengthened the investments in few of our investee companies and subsidiaries. I think we now have 100% share in Excel. Also, we have seen a lot of, whether it is accelerated depreciation or review of different segments and different parts of the portfolio, a lot of that has already happened. Where exactly are we in terms of portfolio optimization and all these one-offs and strategic write-offs, et c.?
Do we expect that we are maybe close to the end of that exercise and the margin profile incrementally, barring the commodity pressures, will be more stable and aligned with the growth objectives?
Yeah, I think the answer lies in your question. When we looked at a new strategy and where we really did a full portfolio review and launched GREAVES.NEXT, which was November last year, that is when we took some of the major portfolio calls. We exited a number of businesses within retail. If you recall, we were trying to really do a lot of things. We exited that, and as a consequence, our retail business has become very healthy and returned to being the cash generating engine that it used to be.
We exited things like the farm equipment business, where the margins were very low, and we have seen the benefit of that within the industrial solutions segment that we have. We now continue to build on this solid platform. We believe all the key portfolio decisions that were to be taken for this stage of our business plan have been addressed. We can focus then on execution and making sure we continue to grow our market shares. You can see the results where you can see not just the revenue, but also improvement in margins in some of these businesses.
Just to extend on that, we expect that the write-offs, etc. , we are more or less done with all of that?
Tushar, hi, Manish here. I think we have been absolutely prudent about it. I think like Parag mentioned, last year we pruned the portfolio from farm equipment and March 2026, we did a bit of a write-off over there in the core business. Now, the electric mobility platform has done the similar exercise as well. We just wanted to concentrate on specific portfolios, on specific brands. Therefore you see a few more write-offs coming from, or the amortizations, accelerated depreciations actually coming from the electric mobility.
Do we sincerely believe there is nothing more at this stage for us to do? If there was any, we would have done it right now.
Thank you. Just one last question, if I may. On EV side, in response to one of the previous participant's questions, I think Vikas mentioned that there is some capacity expansion or constraints that need to be addressed. Whereas I believe from an overall number of units perspective, we are still maybe in the low 20s or maybe just above 30% utilization. What capacity constraints? Is there a constraint in the supply chain ecosystem that has not allowed us to grow maybe faster than what we are already doing? If so, when do we address that?
Sure. Before Vikas answers that question, just one disclaimer on the previous question on your amortizations, write-offs and disclaimers. As an accounting exercise, as a business review, this is a standard disclaimer. This is a regular exercise that we are supposed to do on a quarter or a period end basis. That exercise continues to happen and will continue to happen as we progress in the future quarters. Vikas, if you please may now respond to this question.
Yeah, sure, Manish. Thanks. Hey, Tushar. Hi, good to connect again. I think you need to see it in the context that we have a growth in two-wheeler of about 130% year-on-year. We also have pendency in terms of orders over and above what we are already catering to. The question is not really a constraint at our end or a constraint at the external end. The constraint is basically to try and notch up a supply situation which can cater to a much higher level of growth.
It is basically about expanding the ecosystem, expanding our partner ecosystem, et c., which can allow us to be ready for a higher rate of growth than what we are bringing in today. I would put it in that context to clarify. I hope that helps.
When you say this, you want to extend your partner ecosystem capacities, what numbers you have in mind, sir? Let us say three to four quarters down the line, is there a specific number we are working towards so that we do not fall short again of t he possible growth chart?
Once again, not possible to give you a forward-looking statement on that account. I can just tell you that any math that you do over and above 130% growth over the same time last year will be a significant number. We would only be getting into a much, much stronger domain with that. I would just leave it at that for now, Tushar.
Not a forward-looking statement, but 10% is your intended range where you want to reach. I am assuming you will resolve your capacity constraints so that you are able to get there if and when the market allows you to.
We are well on course for that, and we would see every month getting better and bridging the gap. We do not see that as a challenge to our ambitions going forward.
Great. Thank you so much. I will join back with you.
Thank you.
Thank you. Next question is from the line of Zaki Abbas Nasser. An individual investor, please go ahead.
Sir, good evening, and I think congratulations to the team for, I would call it a thumping set of numbers marked by one-off. Sir, we have certain write-offs and amortization. So would that be a one quarter kind of a number, or we have more to do going ahead, sir?
Hi, Zaki. Good evening, and thank you for the compliments. As I just mentioned in the previous question in response to Tushar's question, these have been the one-off write-offs, and these are regular reviews that the company and the team analyzes on a quarter to period end basis. Therefore, we sincerely believe whatever was to be amortized to accelerated depreciated has been done in Q2, and therefore you see that huge number of INR 27.3 crores on accelerated depreciation and INR 32.8 crores on exceptional items, totaling to INR 60.1 crores.
There is nothing more at this stage to do for any further write-offs or accelerated depreciations.
Good. Two very interesting developments this quarter are one is ownership of 100% of Excel. The other is introduction of our rare-earth-free motors. Could you throw some light on both these, sir? I think these are major things. In fact, you all have also given in your presentation that the motors will go into our own EV two-wheelers from Q3 or Q4. Some light on these two developments, sir.
Sure, Zaki. Let me comment on the Excel 100% acquisition, and then Vikas will talk about the rare-earth-free motors. Excel, we started acquiring it two years ago, and we are very happy to make it now a fully owned subsidiary of Greaves Cotton Limited. Like I mentioned in my opening remarks, it gives us an opportunity to really build a very strong auto components platform. We have also upgraded Excel in this period. A significant investment has gone in automation of manufacturing, significant investment has gone in professionalization of the product development and business development.
As a consequence, we have started seeing the growth returning. Like I mentioned, 30% growth this quarter, even faster than what they grew last quarter. We are very excited with this new platform that we have, and therefore it was really good to complete the whole transaction and own it 100%. I will now ask Vikas to talk about the other exciting development you asked for.
Sure, Parag. Thanks, and thanks for the question, Zaki. I think the rare-earth-free motor is a very, very big development from our side. It is like one of the previous investors mentioned, it is like the LFP battery, which was first from our side in the sector. The key piece over here is that it is in-house. It is going to be sourced in-house, and it is going to go into both our two-wheeler and three-wheeler solutions. This will happen over the period of the next quarter or two.
I would just like to say at this point in time that besides the cost advantage, this motor also gives much higher performance deliveries as compared to the traditional rare-earth-free motor. We believe, not only will it enhance customer experience and overall vehicle performance, but also, as usual, help add to our margins and bottom line. Hope that helps. Thank you.
Sir, fantastic. In fact, congratulations to the team who developed this motor. I think it is a big development. Mr. Parag, going on Q3, do you think our gross margins will start improving and the pressure from inputs will start reducing, and partly you could pass it on?
I think there was a question also from the previous one. I can tell you that answering that question and then coming to your question, Zaki, the impact of those commodities, which Manish mentioned, aluminum, copper, PGM, and steel, is across our product range. Our ability to pass on this or to subsidize this is different in different businesses. In the automotive business, we have very strong contracts, multi-year contracts, where there is a raw material indexing mechanism, but it comes with a lag.
We start to see the price passing coming in from quarter four this year for the automotive business. In some of the other businesses, including energy solutions and industrial solutions, we sell to our channel partners and our dealers. Here again, we try to minimize the prices that we need to pass on by cost actions, but whatever we have not been able to absorb, we have adjusted the prices in the market. Here too, the impact of the prices comes with a quarter or four to five months lag.
We enacted those price changes at the end of Q1, and we hope to see the impact come through in the third quarter and the fourth quarter.
Just like I mentioned earlier. Sorry.
Sir, and one last accounting question, sir. Manish, we have put in some money in the rights issue of—
The electric mobility GEML.
After that, what would be our cash on books and would IPO even be required for the EV two-wheelers? A suggestion would be that a spin-off could be a better option, so both companies find their own valuations because valuations, as I see, are getting suppressed because both our businesses are valued in a different way. EV, Ather is valued at some seven, eight times or more top line. On the other side, if you see our competitors, Kirloskar Oil Engines and Cummins are again valued very richly. I think we are getting pulled in by our own thing. It is just a suggestion that spinning off could be a better option, sir.
Sure. Zaki, thanks for your questions. I see three questions coming up, cash, rights, and IPO, stroke listing for GEML. On the cash side, I think Greaves Cotton and electric collectively on the core basis, we have got INR 150 crores of cash and INR 40 crores of debt, so net INR 110 crores of cash in hand at this stage. And of course, you know core business has been cash generating for quite some time now, and it continues to throw cash for further utilization scheme. Just to top it up, we are AA- from a credit rating perspective and almost nil debt on the books. That financial leverage is always available at our disposal.
Second part of your question on the rights, I think as we maintain that these INR 331 crores of inclusion from our side and total INR 530 crores at GEML end, rights issue is good enough to consume the entire cash burn period and the enhanced working capital for the group that GEML is showing, and the incremental CapEx that we might need over a period of next 12-18 months or so. We do not need cash primarily for the immediate these 12- 18 months period at all, and thereafter it should be cash generating on its own.
IPO, spin-off and all that, of course, these are decisions which are, there's nothing more for me to add to what I think Vikas mentioned earlier. It's basically for the IPO committee to decide on how and when and how do we execute that.
Sure. Kirloskar Oil Engines has given a commentary that lot of demand and power generation is coming from data centers AI. What is our thoughts on our share in this space, sir?
Indeed, that data center area worldwide has been booming and there is going to continue to boom in the coming period. Currently, our play in that space is limited, but we have recognized that and we are building capabilities both internally and through strategic partnership to have a bigger play in that space. More to come on that as and when we make any confirmed stride forward. But we are present in that segment. We do high horsepower engines, but at a limited level.
Thank you. Thank you, sir, and best wishes for the H2.
Thank you, Zaki.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr. Parag Satpute for his closing comments. Over to you, sir.
Thank you very much. Thanks everyone for joining this earning call and for all very interesting questions, also some good compliments. To conclude on this call, I would like to reconfirm that this quarter has been another quarter of strong business momentum and meaningful progress we have made on the execution of GREAVES.NEXT. What gives me pleasure is that our core businesses are growing well, the strategic priorities are gaining traction, and we continue to strengthen products capabilities across.
We also recognize that in the face of input cost pressures, we will put extra emphasis on improving profitability. This is something which the management takes very seriously. As a consequence of this, our priorities for the second half of this year are very clear, and we will continue to work on those. Thank you very much for now, and see you at the end of next quarter.
Thank you very much. On behalf of Greaves Cotton Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.