Greaves Cotton Limited

Industrials — Specialty Industrial Machinery · NSE

₹204.23+₹0.68 (+0.33%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Greaves Cotton Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Greaves Cotton Limited operates engineering and mobility retail business in India, the Middle East, Africa, Southeast Asia, and internationally. It operates in four segments: Engines; Electric Mobility & Other Vehicles; Cables & Control Levers; and Others.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees1,735

Annual revenue₹3,417 Cr

How does it make money?

Turns over ₹3,417 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 1,735 employees supports ₹1.97 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.97 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 7.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE17.1%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +28% while net margin moved +7% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+28%

Margin effect+7%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 7.5% is weak

Quality vs. Valuation

Company Quality

51/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

51/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

47.9x

3Y Median

55.8x

40 monthly readings · mean 59.0x · range 36.4x–95.2x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 14% below its 3y median of 55.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 28% below the peer median of 66.2x.

vs. its own history

Fair

55.8x median over 40 months · -14%

vs. sector peers

Cheap

66.2x median of 4 peers · -28%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

17.6x

PEG

4.30

What's Good / What's Bad

🟢 What's Going Well1

Very low debt
Debt/Equity of 0.26x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 1296% over 3 years, from ₹28 Cr to ₹394 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 108% against revenue up 28% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 28% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 108% against revenue up 28%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 6%✓ 8.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹63 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 6% a year✓ 8.6% CAGR
Latest reported year was 30.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 7.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹4,758 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

47.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.26

Profitable

Profitable on a per-share basis

ROE

7.5%

Weak

Weak capital efficiency

ROCE

7.2%

Weak

Low return on total capital employed

Debt/Equity

0.26x

Low

Conservative leverage

Revenue Growth (YoY)

30.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-32.4%

Falling

Profits are shrinking

Dividend Yield

0.98%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹63 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

23.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

2.9%

Weak

Thin margins leave little room for error

Net Margin

2.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.53

Defensive

Steadier than the market

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

214.5 / 202.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

19.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,668 Cr	₹2,586 Cr	₹2,906 Cr	₹3,417 Cr	+8.6%
EBITDA	₹193 Cr	₹144 Cr	₹175 Cr	₹282 Cr	+13.5%
EBITDA Margin	7.2%	5.6%	6.0%	8.2%	—
PAT (Net Profit)	₹78 Cr	-₹135 Cr	₹58 Cr	₹107 Cr	+11.1%
EPS	₹3.35	₹-5.83	₹2.5	₹4.56	+10.8%
ROE	4.9%	-9.4%	4.2%	7.5%	—
ROCE	6.2%	-14.9%	5.1%	7.2%	—
Total Debt	₹28 Cr	₹81 Cr	₹81 Cr	₹394 Cr	+140.8%
Free Cash Flow	-₹214 Cr	-₹312 Cr	-₹104 Cr	-₹63 Cr	—

🟢 Revenue has grown at 8.6% a year over 3 years.

🟢 EBITDA has grown at 13.5% a year over 3 years.

🟢 EBITDA Margin has risen from 7.2% to 8.2% over 3 years (+1.0 pts).

🟢 PAT (Net Profit) has grown at 11.1% a year over 3 years.

🟢 EPS has grown at 10.8% a year over 3 years.

🟢 ROE has risen from 4.9% to 7.5% over 3 years (+2.6 pts).

🟡 ROCE has held roughly flat at 7.2% over 3 years.

🔴 Total Debt has grown at 140.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,894 Cr

Total Liabilities

₹1,380 Cr

Cash & Equivalents

₹191 Cr

Operating Cash Flow

₹33 Cr

Capex

-₹96 Cr

Shareholding (proxy)

Institutional Holding

3.1%

Insider Holding

56.6%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

28 Jul 2026

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

2 positive2 mixed2 general

Greaves Cotton shareholders approve FY26 results, ₹2 dividend

scanx.trade, 18 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

how InvestingPro spotted 67% upside in Greaves Cotton stock By Investing.com

Investing.com India, 23 Jun

Greaves Cotton files Business Responsibility and Sustainability Report for FY 2025-26

scanx.trade, 15 Oct

Greaves Cotton Share Price Fall: Valuation and Sector View

Univest, 07 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Greaves Cotton Ltd (BOM:501455) (Q1 2027) Earnings Call Highlights: Record 31% Revenue Surge ...

Yahoo Finance, 06 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Greaves Cotton Unveils 750 HP Fire-Fighting Engine; Shares Fall 0.39%

HDFC Sky, 07 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingValuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑