The shares of Greaves Cotton Ltd. fell nearly 10 percent in Monday’s trading session. The decline in share price comes after the Indian government asked the company to return the subsidy amount of ₹ 124 crore from Greaves Electric Mobility Private Ltd. (GEMPL) along with interest, for violating Phased Manufacturing Programme (PMP) guidelines.
At 13:00, the stock was down 8.93% from its previous close and was trading at 135.05 on the BSE.
Greaves Cotton Ltd. (GCL), is an engineering company engaged in the manufacturing of diesel and petrol engines, gen-sets, agro equipment, aero engines, and construction equipment.
Greaves Electric Mobility is a subsidiary of Greaves Cotton Ltd., which operates under the Ampere name. In the electric mobility market, it provides a variety of electric two-wheeler models such as the Primus, Magnus EX, and Reo Plus.
In a letter dated May 25, the Ministry of Heavy Industries informed Greaves Cotton that the firm’s inability to adhere to the PMP requirements might result in the cancellation of the company’s registration with the FAME India Scheme Phase II.
In addition, the ministry instructed Greaves Electric Mobility Private Ltd. (GEMPL) to deposit all incentives claimed under the program, totaling Rs 124 crore, together with interest. The submission of the necessary representations by GEMPL is a condition of this deposit.
According to the company financials, the operating revenue increased from ₹513 crores in Q3 to ₹826 crores in Q4. Similarly, the net profits of the company during the same period, increased by 825 percent, from a loss of ₹4 crore to a profit of ₹ 29 crore.
On a YoY comparison of the metrics, the revenues significantly increased by 21 percent from ₹ 1,709 crores during FY 21-22 to ₹2,699 crores in FY 22-23. Within the same timeframe mentioned, the PAT has moved, from a loss of ₹ 32 crores to a profit of ₹ 76 crores.
According to the latest data pertaining to the shareholding pattern, promoters of the company hold a 55.74 percent stake, and foreign institutional investors (FIIs) hold a 4.54 percent stake in the company for FY 22-23.
Written by Omkar C
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