Greaves Cotton augmenting its capacity : Excon 2007

Saturday, 17 November 2007

Bangalore: Greaves Cotton Limited, one of India's leading engineering companies and a major player in the infrastructure equipment space has launched six new products at Excon 2007,a construction equipment and technology fair.

In the recent years, Greaves has made rapid strides in the infrastructure equipment business with a wide range of world class equipment in both concreting and compaction which commands substantial share of the market.

In addition to the plant recently commissioned for Transit Mixers, greaves is further augmenting its capacity with another state-of-the-art manufacturing plant, which is likely to go on stream early 2008. This would enable the company to double its capacity in Compaction equipment as well as Concrete Pumps and Batching Plants. Moreover, Greaves is also strengthening its R & D efforts, which would facilitate introduction of new products tailored to changing customer requirements.

Commenting on the occasion, Mr. Praveen Sachdev MD & CEO, said, "We are committed to the partner the Indian Industry in its quest for world class infrastructure by delivering a range of products that meet global benchmarks of quality, efficiency and spped."

Greaves' new products include:
Perfectmix- 1000 Concrete Batching Plant with 60 cbm/hr capacity
GCM 90 Transit Mixer of 9 cbm capacity
GCP 450 D-S Concrete pump in the concreting field
12T vibratory Soil Compactor with A/c Cabin
Heavy Tandem Roller with Cabin
Light Tandem Roller with an indigenous engine in the compaction field.

These products will provide cutting edge technology to the Indian infrastructure industry.

The new products have been designed and developed at Greaves' own R & D facilty and have unique features to suit the changing needs of the Indian Infrastructure industry.

Greaves, a Rs 1200 crore, multi-product, multi-locational company is one of the leading engineering companies In India, with core competencies in infrastructure equipment and diesel/petrol engines. The company sustains ist leadership through nine manufacturing units which produce world class products backed by comprehensive marketing and service/parts network throughout the country.

MACHINIST

Piaggio to set up diesel engine unit near Pune

The Italy-based global transportation major, Piaggio & C Spa, will pump in ¤60-65 million over the next two to three years to set up a diesel engine manufacturing facility near Pune.

The move comes as a part of the company’s plans to make India a global sourcing hub, according to Ravi Chopra, chairman and managing director, Piaggio Vehicles(PVPL), the Indian arm of Piaggio.

The parent company will set up a backward integrated plant to manufacture diesel engines for servicing three- and four-wheeler requirements in the domestic and international markets, Chopra said at the launch of the company’s four-wheeler Ape Truk, a sub-one-tonne light commercial vehicle, in Chennai on Thursday.

He said the project was on stream and the company was in the process of acquiring the necessary land. The manufacturing unit would be spread over 60 acres and have a production capacity of 200,000 diesel engines. The company expects to commence commercial production by end-2009 or early 2010.

The investment comes on the back of a strong growth in the domestic market and is part of Piaggio’s plan to have its own engine facility for commercial vehicles.

The newly launched 482-cc Ape Truk comes with an aggressive price tag of Rs 2,15,000 (ex-showroom, Chennai) against Tata Ace, which is available at about Rs 2,50,000.

The Ape Truk has a payload capacity of 865 tonnes and will be positioned between the lower end of the light commercial vehicle category and large three-wheelers such as Minidor, Champion and Vikram, among others.

This four-wheeler will come in three variants, pickup, delivery van and hi-deck. With the highest ground clearance in its category and larger and wider wheels, the vehicle has been designed as a multipurpose all-terrain vehicle, Chopra said.

PVPL is planning to expand into the sub-one tonne light commercial vehicle (LCV) market.

Tata’s Ace, which was launched a couple of years ago, is reported to be selling 6,500 units a month. In March, Tata rolled out its 1,00,000th Ace within 22 months of the launch of the Ace, India’s first mini-truck, in May 2005.

Ashutosh Khosla, director - sales, PVPL, said the Ape Truk incorporates all the features available in Italy and Europe, where the company was a pioneer in the one-tonne four-wheeler category.

The company has an installed capacity of 36,000 Ape Truk vehicles at Baramati, which could be ramped up quickly depending on market needs as it is a modular production facility.

The total market for three-wheelers in India is about 4.5 lakh vehicles a year. The cargo segment is expected to account for 55 per cent.

RACING AHEAD

The move comes as a part of the company’s plans to make India a global sourcing hub The manufacturing unit would be spread over 60 acres and have a production capacity of 200,000 diesel engines The unit is expected to commence commercial production by end-2009 or early 2010 It is a part of Piaggio’s plan to have its own engine facility for commercial vehicles

Source : Business Standard

Greaves Cotton

DSP Merrill Lynch, Q3FY07 revenues are inline with their expectation. DSP ML has recommended buy rating on the stock.

Topline growth in line, margins suffer…

Greaves’ Q3FY07 revenues, at Rs.3.25bn (36.6% Y-o-Y), were in line with our expectations of Rs.3.24bn. EBITDA margins for the quarter, however, suffered by 58bps to 14.7%, as against our expectation of 16% due to higher than expected increase in raw material costs & other expenses. EBITDA for the quarter was thus at Rs.478mn (31.4% Y-o-Y). PAT at Rs.339mn, was more than our expectation of Rs.301mn, due to MAT credit of Rs.60mn received which reduced tax outgo.

Upgrading our full year estimates

Based on nine-months numbers for FY07E, we are upgrading our revenue estimates by around 9% to Rs.12.58bn, mainly on account of higher growth in the infrastructure division, and by around 8.6% in PAT to Rs.1.1bn as against Rs.984mn earlier. We are maintaining our earnings estimates for FY08E and FY09E at Rs.1.3bn and Rs.1.65bn respectively.

Maintain Buy

The stock trades at 12x FY08E and 9.6x FY09E EPS; we expect a CAGR of 22.3% in revenue and 25% earnings CAGR over FY06-09E. Greaves compares favorably to peers comprising other engine manufacturers and major auto ancillaries, both on earnings growth and return ratios.