Greaves Cotton Ltd

NSE:GREAVESCOT

Earnings Call Analysis

Greaves Cotton Reports Strong Growth and Strategic Initiatives

Greaves Cotton delivered robust financials, achieving consolidated revenue of INR 705 crores in Q2 and a remarkable INR 1,036 crores for H1. The Electric Mobility division excelled, generating INR 175 crores in Q2 and INR 302 crores in H1, boosted by a 30% growth in the 3-wheeler segment. EBITDA margins improved to 14.4%, with strategic investments laying a foundation for sustainable growth. The company aims for 13-15% EBITDA margins moving forward, ensuring a solid balance sheet with INR 350 crores cash reserves. Ambitiously, Greaves targets INR 15,000 crores in revenue within five years, driven by diverse revenue streams and market expansion.

Transforming into a Diverse Mobility Solutions Provider

Greaves Cotton is making a significant shift from being primarily an engine manufacturer to a comprehensive mobility solutions provider. Over the past five years, this transformation has focused on developing a fuel-agnostic strategy, which is gradually taking shape. By diversifying its revenue streams and enhancing its B2C model, Greaves is positioning itself to maximize customer value and adapt to changing market demands.

Strong Financial Performance Highlights

In Q2 FY '25, Greaves Cotton reported consolidated revenues of INR 705 crores and stand-alone revenues of INR 468 crores. This strong performance reflects the results of the company’s strategic initiatives and was supported by the Electric Mobility division, which generated significant revenue—INR 175 crores in Q2 and a total of INR 302 crores in H1, driven by new product launches and a commitment to profitability.

Promising Growth Across Segments

The engineering and retail divisions saw quarter-on-quarter growth of 4% and 7% respectively in Q2, indicating a strong market position. Specifically, Greaves Electric Mobility's performance in the E2-wheeler and 3-wheeler segments showed impressive volume growth of 30% and 29% sequentially, attributed to effective product marketing and consumer response. This growth illustrates Greaves' ability to innovate and meet the demands of a rapidly evolving market.

Improving Profitability and Healthy Margins

Greaves Cotton has shown considerable progress in profitability, with stand-alone EBITDA for Q2 reaching INR 59 crores—an increase of INR 9 crores from the previous quarter. The combined EBITDA for Greaves Cotton and Excel stood at INR 76 crores, yielding robust margins of 14.4%. Furthermore, the strategic focus on improving margins and effective working capital management has helped maintain a return on capital of around 16%.

Debt-Free and Strong Cash Reserves

The company maintains a nearly zero debt balance sheet and has cash reserves exceeding INR 350 crores, providing a solid foundation for future investments and growth initiatives. This financial strength positions Greaves Cotton favorably to capitalize on expansion opportunities without financial constraints.

Outlook for Future Growth and Transformation

Looking ahead, Greaves Cotton is set on a transformative journey aiming for sustained growth. With a clear vision for the future, the company anticipates that its strategic focus on profitability paired with innovative product offerings will enable it to navigate external uncertainties effectively. The ongoing commitment is toward achieving an EBITDA margin ranging from 13% to 15% in the coming quarters, thus continuing its recovery post-COVID.

Investment in Technology and Customer Engagement

To enhance service quality and customer satisfaction, Greaves is investing in technology and resources, including their franchise-driven Greaves Care platform. This commitment to digital transformation aims to streamline operations and improve customer interactions, as demonstrated by increased bookings through their mobile application.

Navigating Challenges in the Electric Mobility Sector

Despite the surge in the electric vehicle segment, challenges remain, particularly for Greaves Electric Mobility, which recorded significant losses in H1. The company is committed to a defined path to profitability, focusing on growing revenues and optimizing costs per vehicle. Continued expansion in financial partnerships for customer financing solutions also indicates a proactive approach to easing market entry for consumers.

Vision for $2 Billion Revenue Target

Greaves Cotton's ambitious goal of reaching INR 15,000 crores in revenue over the next four to five years underscores its determination to grow significantly. This target suggests a mix of both organic growth and strategic acquisitions in various sectors, emphasizing a diversified approach to its business model that includes electric mobility, engineering, and retail segments.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Greaves Cotton's Q2 and H1 FY '25 Earnings Conference Call.

We have with us today, Mr. Nagesh Basavanhalli, Non-executive Vice Chairman, GCL; Ms. Akhila Balachandar, CFO, GCL; Dr. Arup Basu, Managing Director, GCL; Mr. K. Vijaya Kumar, ED and CEO, GEMPL; Mr. Narasimha Jayakumar, CEO, Greaves Retail; Mr. Chandrasekar Thyagarajan, CFO, GEMPL; Mr. Atindra Basu, Group General Counsel and Company Secretary of the company.

We would like to begin the call with brief opening remarks from the management, following which we will have the forum open for an interactive question-and-answer session.

Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier.

[Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Nagesh Basavanhalli. Thank you, and over to you, sir.

[Nagesh Basavanhalli, executive]

Good morning, everyone. Thank you for joining the call today. Just from an overview, Greaves Cotton's journey over the last 5-plus years continues as we accelerate from a traditional engine company to a fuel-agnostic mobility solutions provider, driven by a strong purpose of empowering lives across India.

Our primary strategy of getting closer to the consumer, extracting life cycle value while going about in a fuel agnostic and a sustainable manner is beginning to take shape. Multiple revenue streams have been created. Our B2C part of the business continues to grow and, in fact, be a significant portion of the quarterly revenue.

Also by integrating technology across the value chain, we are building an agile ecosystem that maximizes the synergies across the various businesses, while adding value to the end consumer. So without any delay, let me hand over the discussion to the management to take you through the quarterly financials and the quarterly progress.

First up, will be Akhila Balachandar, the CFO of the company.

[Akhila Balachandar, executive]

Thank you, Nagesh, and good morning, everyone. I'm pleased to report that the company delivered healthy financial results for the period under review, demonstrating the effectiveness of our strategic initiatives.

During the quarter, we recorded consolidated revenue of INR 705 crores, while on a stand-alone basis, our revenue reached INR 468 crores. Excel recorded revenue of INR 61 crores to reach INR 124 crores in H1 with double-digit EBITDA margins.

Our engineering and retail businesses each maintained growth quarter-on-quarter basis with 4% and 7% increases, respectively, for Q2, and 6% and 7% increase in H1, thus reflecting our strong market positioning.

Our Electric Mobility division also delivered impressive results generating INR 175 crores in Q2 and INR 302 crores in H1. This growth was supported by a focused approach on new product launches and a defined path towards profitability.

When you look at the combined performance of GCL and Excel, the exceptional financial results reflect our strategic efforts to diversify the product portfolio over recent years. Following Excel's acquisition and integration, the consolidated revenue from GCL and Excel reached INR 528 crores in Q2 and INR 1,036 crores for H1, giving us a firm foundation to provide a solid platform for future growth and innovation.

Profitability metrics showed significant progress. On a stand-alone basis, EBITDA for the quarter was INR 59 crores, up by INR 9 crores from last quarter and improved by 130 basis points. Combined GCL and Excel's Q2 EBITDA stood at INR 76 crores with margins at a robust 14.4 percentage. Stand-alone PBT for the quarter amounted to INR 56 crores in Q2.

In H1, our consolidated revenue reached INR 1,345 crores with EBITDA of INR 50 crores and PBT at INR 21 crores. Stand-alone revenue for Greaves Cotton was an impressive 7% growth amount INR 912 crores, while EBITDA amounted to INR 109 crores.

Our strategic emphasis on margin improvement has been reinforced by efficient working capital management, helping us to maintain a strong return on capital of approximately 16% plus.

We continue to sustain a nearly 0 debt balance sheet with stand-alone cash reserve of INR 350-plus crores, positioning us well for future investments and expansions.

Looking forward, we remain committed to growth and transformation, leveraging our solid foundation and dedication to excellence to seize the future opportunities. Despite external uncertainties, our internal focus on profitability and strategic execution continues to drive our success. We are confident that the strategies implemented over the past few years will yield sustained performance.

Thank you. With this, I invite Dr. Arup Basu to share his remarks on the engineering business. Over to you, Dr. Arup.

[Arup Basu, executive]

Thank you, Akhila, and good morning, ladies and gentlemen. I will talk about the Engineering business, which comprises Greaves Engines and Excel.

I'm pleased to report that Greaves Engineering continues to perform well. In H1 FY '25, diesel 3-wheelers experienced strong volume growth. In gensets in the second quarter, we experienced a more subdued performance compared to the previous quarters. The CPCB IV+ norms became applicable in Q2 FY '25, making diesel gensets more expensive and large-scale purchases had occurred in the quarters prior to that.

However, the underlying demand remains robust. As part of our commitment to sustainability, innovation and conspicuous customer value, we have introduced an emission control kit, which can be retrofitted to enable even older gensets comply with the latest emission norms.

Excel with its customer-first approach and efficient operations continues to deliver industry-leading profitability with exports constituting a significant proportion of revenues. In H1 FY '25, while Excel's share of wallet with OEMs remained intact, sectoral demand growth, especially in agri was muted due to a slowdown in infrastructure project execution, reduced mining activity and lower fleet utilization due to heavy rains. With the anticipated increase in infrastructure spending, demand is expected to recover in H2.

The agriculture industry too, is showing signs of improvement. Our diversified export product portfolio and geography is part of our strategic plan for sustainable profitable growth while mitigating related risks.

Exports accounted for over 10% of Greave's Engineering revenue with motion control solutions from Excel contributing to about 65% and engines the balance.

Looking ahead, we are well positioned for sustained growth. Our R&D continues to focus on ensuring compliance with the upcoming regulatory standards, which is an ongoing program, application engineering, expanding the range of fuel-agnostic ICE engines and gensets and building a new line of business in electric powertrain.

For the next commentary, I now hand over to my colleague, Narasimha Jayakumar. Thank you, and over to you, Narasimha.

[Narasimha Jayakumar, executive]

Yes. Good morning, everyone. This is Narasimha Jayakumar, CEO of Greaves Retail. Quick overview. Greaves Retail continues to be amongst the leading players in the 3-wheeler ICE part segment. We're also making significant strides in the electric 3-wheeler or the E-Rickshaw powertrain business and we are capturing greater market share as we continue to expand our presence.

In the E-Rickshaw segment, we already were market leader for parts which are made in India, and this business is growing strongly. We launched several new products targeting the E-Rickshaw segment covering now a full range of motors, controllers, DC-DC converters and other vehicle parts like tires.

Greaves Retail now with a wide-ranging network of over 250 distributors, 10,000-plus retailers and 25,000 mechanics has built a strong ecosystem, which fosters growth connections and seamless experience for our customers. Our mechanic loyalty program app has now over 8,000 active scanning mechanics on a monthly basis. Our 3-wheeler multi-brand parts now cover both CNG and our 2-wheeler parts also continue to grow well.

On the services side, Greaves Care franchising operations continues to be the leader in multi-brand servicing for 3-wheelers. And increasingly, we are enabling the network to service electric 3-wheelers and electric 2-wheelers. And we have, at the end of September, more than 210 franchise outlets all over India. And today, most of the bookings -- 70% of the book are done by the Greaves Care app, providing unmatched digital convenience to our vehicle owner.

For the second half of the year, there will be greater focus leveraging Excel manufacturing capabilities and development of new aftermarket part lines for the heavy commercial vehicle, the HCV and the Construction Equipment segment both of which are booming given the massive infrastructure push and the construction activity all over India.

Across Greaves Retail, digitalization is playing a key role to drive greater supply chain efficiency and to improve our overall customer experience.

Thank you. And over to you, K. Vijaya Kumar, CEO of Greaves Electric Mobility.

[K. Kumar, executive]

Thank you, Narasimha. Very good morning, ladies and gentlemen, and thank you for joining us today on our earnings call. This is Vijaya Kumar, Executive Director and CEO of Greaves Electric Mobility.

I'll briefly talk about the performance of GEM, we call Greaves Electric Mobility as GEM internally, post which we can commence the Q&A session. Greaves Electric Mobility reported a very healthy performance, reflecting our commitment to growth and innovation last quarter. We continue to be a very key player in the E2-wheeler and 3-wheeler segments, focusing on affordable mobility solutions with the goal of making "Har Gully Electric."

Our volumes saw a remarkable growth in Q2 FY '25 surging by 30% in the 3-wheeler segment and by 29% in the E2-wheeler quarter-on-quarter. This surge can be attributed to our new product introductions and other product enhancements, which have been well received in the market.

I'm also happy to inform that we have been developing our financial retail partnerships, and we have signed up with multiple financing partners, including Shriram Finance to enhance national-wide financing options for our L5 vehicles. While we are encouraged by our sales growth, our key thrust is on efficiently ramping up our presence and reach to further drive visibility and our volumes across the country.

Our robust support network includes over 400 sales and service points for E2-wheelers and more than 250 of 3-wheelers allowing us to deliver exceptional customer service. We are also conducting various customer care camps and training programs for mechanics to certify them as Ampere certified technicians.

Our strategic focus always have been on optimizing our cost and growing sustainably to enhance our pricing power. We are actively optimizing our bill of material cost across our entire product range, and are actively engaging with suppliers across the spectrum on this. This has resulted in a 7% to 12% decrease in our BOM cost across different models in H1 FY '25. This is also a testimony of our intent and ability to prudently manage our balance sheet while driving growth, build on the economies of scale and knowledge expertise of Greaves.

We are also thrilled to announce that Axar Patel, our favorite Cricket World Cup T20 Champion, has joined as our brand advocate to promote Greaves Electric Mobility.

Our electric 3-wheeler Greaves Eltra City is registered in India Book of Records for the longest ride on a single charge by any EV 3-wheeler in India, covering 225 kilometers on a single charge. Our management team is committed to regaining our Q5 FY '23 performance through a focus on innovation, dealer expansion and ramp-up of our new aftersales initiative called Ampere Care. We continue to grow month-on-month and our volumes grew nearly or more than 70% over Q2 in the month -- festival month of October, which has just concluded last month.

As we -- and this growth has been across 2-wheeler and 3-wheeler building on other new products and the new models, which we have launched in H1.

As we move forward, we are continuing to work on enhancing our existing models, introducing new variants across our entire product range. Our key differentiators include best-in-class LFP batteries, affordable pricing and strategic financing options through Greaves [Evfin]. Together, these initiatives position GEM for sustained growth and success in the ever-evolving electric mobility space.

Thank you, ladies and gentlemen. That concludes my opening remarks, and I would now request the moderator to commence the Q&A session, please.

[Operator]

[Operator Instructions] The first question is from the line of Kunal Sharma from SP Capital.

[Unknown Analyst]

So first question I wanted to ask on the reason that we have been highlighted, which is a INR 15,000-odd crores revenue. So what synergies that you are working on the same? And from where do you see the major contribution amongst all our 5 verticals? Will it be from the retail, Excel or EV?

[Akhila Balachandar, executive]

Thanks, Kunal. Let me take that. This is our Board vision at a strategic level and the direction that the Board has set for the company. We -- if you see the 3 businesses that we have focused over the last 2 years in our transformation journey, we believe all the 3 are now at an inflection point and set to fire. So we expect all 3 to grow and contribute to our overall vision.

And the idea is as part of the transformation strategy to diversify from a single product, single company dependence to a fuel-agnostic multi-fuel multi-revenue stream, the diversified revenue stream company, which is therefore protected and resilient to any external market forces. Hope that answers the question.

[Unknown Analyst]

So will you be able to give any percentage allocation, if you could just share the ballpark number. You have mentioned the 3 verticals that is right. But will it be from the higher chunk from retail or EV and engineering?

[Akhila Balachandar, executive]

The focus is on diversifying from our original dependence on auto engines, auto diesel engine rather. And how we diversify out of that is the strategic goal and transformation agenda. And therefore, there will be multiple contributors to this overall journey.

And if you see what we have -- what the Board has set out for us, it is also a mix of inorganic and organic growth. So I'm sure that multiple levers will play into this.

[Unknown Analyst]

Okay. My second question to Mr. Jayakumar. On retail business, if you are growing at a mid-single digit. So however, the category is so large, we can't be expecting the growth in the range of double digit? And do you see this category can become a 2x to 3x going forward in the, let's say, 2 to 3 or 5 years that whatever the vision that you have been given. And if yes, then what -- like when do you see this kind of growth?

[Narasimha Jayakumar, executive]

Yes. So thank you for the question. I think certainly, the categories in which Greaves Retail operates. As you know, we span both from service sales to parts across different commercial vehicle asset types, ranging from 3-wheelers, electric 3-wheelers to small commercial vehicles. So all the way to HCVs and the CV segment that I talked about.

I think certainly, there is a massive headroom for growth. We are in the -- I think the business is set for that kind of growth as well. I can't obviously speak for exact numbers, but the opportunity exists. And we are actually gearing up. We're making a number of improvements in our supply chain, sourcing and a variety of areas to be able to set up the business for faster growth.

[Unknown Analyst]

Okay. But when do you see -- like I just wanted to ask on that, like what's your aspiration to be there?

[Nagesh Basavanhalli, executive]

Yes. I think we should be seeing faster growth in the coming quarters is what I can say.

[Unknown Analyst]

Okay. Yes.

[Arup Basu, executive]

Yes. Because as you are aware, in the first half of the year, we also had the general elections and also very inclement weather, as one of my colleagues also commented. Certainly, we are looking at higher growth in the coming quarters.

[Operator]

[Operator Instructions] We'll take the next question from the line of Zaki Nasser from Nasser Investments.

[Unknown Analyst]

And I think I should congratulate the board on the broad, great outline for 2030. Sir, my 2 questions are, sir. If you set out a INR 15,000 crores, 4 years end or 5 years end, we should start seeing the growth immediately from this year onwards, at least a small bit of growth. How do you plan this?

And my second question is, sir, this requires a pretty large capital. So what is your thoughts on getting the capital for this.

[Akhila Balachandar, executive]

So thank you, sir, for the questions. And I'll take both your questions in order. The first one, as I said, this is a vision that the Board has set out. And yes, over the last few years, we have been on this transformation agenda, and we have put in place all the levers for the growth in terms of both revenue, cost management, working capital management, and also on the capital efficiencies itself. So I'm sure all the levers are in place and with the guidance of the Board, and we will be able to -- or the aspirations that we've set out for ourselves.

The second question on the availability of capital. I would like to put 2 points here: one, we are highly efficient in our working capital management, and that is something we are constantly working on. Two, as you can see, we have currently approximately INR 350 crores of cash available on the books, which will strengthen our focus to be able to invest in organic and inorganic growth, both internal CapEx as well as inorganic growth.

Do we need more capital? As and when the need requires, the Board is very cognizant and will take whatever required measures are to be done to ensure that the growth opportunities of the companies are not starved and we will not starve for capital and the requisite initiatives will be taken on that front.

[Operator]

We'll take the next question from the line of Sonal Minhas from Prescient Capital Investment Advisors, LLP.

[Sonal Minhas, analyst]

This is Sonal Minhas. Am I audible?

[Operator]

Yes, sir.

[Sonal Minhas, analyst]

Yes. Ma'am, my question is with regard to Greaves Retail. I wanted to understand the reason for a dip in the EBITDA margin of Greaves Retail. For this quarter, when we compare to Q2 last financial year, if you could just give some projected commentary around that, that will really help.

[Akhila Balachandar, executive]

Sure, Sonal. Thanks for the question. So Sonal, if you heard Mr. Narasimha, our CEO for the business, Greaves Retail is a business we are having a lot of opportunities for growth, it's a high-margin business. And what we have done over this year, we've done investments in technology, people, resources, some amount of brand building at the grassroots level.

All these are investments, which will help us grow the business over the next few years. And that is the reason why there is a dip in the EBITDA margins. Otherwise, the business continues to be robust and at operating margins that also we focus on internally, we continue to ensure that the margins are in line with what we are building for.

[Sonal Minhas, analyst]

Okay. So over time, this should basically go up because there are additional investments in the business?

[Akhila Balachandar, executive]

That's correct.

[Nagesh Basavanhalli, executive]

That's correct.

[Sonal Minhas, analyst]

My second question is somewhat linked to the Vision ma'am, basically. And I'm sure there are some guidelines on profitability, return on capital that the group and the leadership basically believe we should be aiming and targeting at. So while 6x in 6 years looks good interesting, what is the flip side of this in terms of -- these are the minimum guardrails of reaching EBITDA, what are the kind of businesses you would want to be in, what are the businesses you don't want to be in for reaching this number at a profitability, which is meaningful for you as well as well as the shareholders. If you could just throw some light around that, that will help disclose the 360-degree around this?

[Akhila Balachandar, executive]

Sure. If you see the last 8, 10 quarters performance of the company, and I would like to stress on that. We have been extremely sharply focused on cost management, improving EBITDA and coming back to a pre-COVID levels of 13% plus EBITDA margins. This is a journey we embarked on, and I think we have now demonstrated that fairly consistently over the last x number of quarters. Now this is a benchmark that we have and that is something we'll continue to work for.

In terms of working capital, again, if you take last 7, 8 quarters trend or I would say more than that 10 quarters trend. We have been, again, prudent and working on optimizing our working capital, which again translates into a very high return on capital employed. These are all basic hygiene requirements that the Board has mandated us and this will, therefore, continue in our new initiatives.

Definitely, some of the newer initiatives will require investment in resources, technology, some amount of CapEx. But all these, we have our internal guardrails well in place. And everything will be, in short these are all accretive to the overall organizational vision.

[Sonal Minhas, analyst]

So any broader guidance on when do you plan to reach close to 13% or let's say, more than double-digit EBITDA margins basically going further?

[Akhila Balachandar, executive]

So if you see even my Quarter 2 results, if you take the trend, GCL plus Excel, our EBITDA margins are at 14.4 percentage. Now therefore, we are continuing to trend in a 13 to 15 percentage range, which is what I would commit to because there are cyclicalities involved. There will be quarters where we will invest more. There will be quarters where -- but overall, I think the -- what we are working towards is a 13% to 15% EBITDA margin range.

[Sonal Minhas, analyst]

Okay. All right. And just a follow-up on this. Like at the current EBITDA margins of minus [30%] on mobility. If this is to be extrapolated at what scale do you expect the business to breakeven -- it's INR 175 cr top line right now? Do we say let's say, 3x from 3 site now this isn't breakeven? Just asking a ballpark here.

[Akhila Balachandar, executive]

Sure, sure. See Greaves Electric Mobility, it's a very different business. They operate on 2 segments, the electric 2-wheeler and electric 3-wheeler. Both of these have their own nuances. The mandate to the organization is to grow the revenues, and that is a path to profitability. I would not be able to give a forward guidance exactly with the dates and quarters in which we plan, but there are internal well-defined path to profitability. I hope that answers the question?

[Sonal Minhas, analyst]

Sure.

[Operator]

We'll take the next question from the line of Manoj [Jethwa] from [indiscernible] Securities.

[Unknown Analyst]

Thank you for the transformation journey, which you have started some few years back. So my first question, then to Madam Akhila. What are the genuine endeavors a company should think one has to do it rather than increasing, incubating more businesses, our increasing the top line, which would really help in improving the margins and reducing the cost because I see the [RMC] cost stands around 69%, which seems to be very high right now. So what could be the focus endeavor of the company at this juncture right now, sir, ma'am? This is my first question.

[Akhila Balachandar, executive]

Can you repeat the question? I could not really understand.

[Unknown Analyst]

Madam, my question is regarding what could be the genuine future endeavors or the present focused endeavor of the company in improving the EBITDA margins, PAT margins, vis-a-vis incubating the new businesses.

[Akhila Balachandar, executive]

Sure. So going back, if you see our 10 quarters journey, we have been consistently improving our EBITDA margins. And post-COVID, I think we were almost at a negative margin. And from then, quarter-on-quarter, we have worked internally to ensure that the margin improvement journey continues.

Around last -- quarter 3 -- quarter 2, quarter 3 of last year onwards, we have been now consistently reaching the 13% plus EBITDA margin that we used to do pre-COVID levels. This is endeavor of the organization, and this is what we remain committed to, an EBITDA margin in the range of 13% to 15%.

Coming to your question on RMC. If I were to look at the stand-alone RMC, again, we have been able to manage and here I must also give credit to the soft commodity cycle currently going on plus a lot of internal initiatives that we keep working on, on a very controlled and consistent improvement in our RMC percent.

If I were to take H1 last year, our RMC percentage was 68.5%. Current year at H1, we are at 67.4%. So that is, again, a continuous journey that we keep on working. And hopefully, all that translates into an improved EBITDA margin. I hope that answers your question, sir.

[Unknown Analyst]

Yes. Yes. Madam, my second question is pertaining to the Greaves Finance, Greaves Retail and EV Mobility business and new business. As you have onboarded, Mr. Ramachandra to look after the EV business and mobility business. So are there any unlocking for the shareholders, which could take place in 2 or 3 years down the line, where it could be listed as a separate entity in all the 3 segments.

[Akhila Balachandar, executive]

So the new business head for EV and mobility business essentially is part of our overall retail strategy to grow the business. Any decisions on unlocking of value, capital raise, this is something that the Board is cognizant of and we will come back to you as and when the Board gives a different decision.

[Operator]

[Operator Instructions] We'll take the next question from the line of Bhavesh Mehta, an individual Investor.

[Unknown Attendee]

Yes. Ma'am can you highlight what are we doing on the nonautomotive business side? And like we mentioned in the Q1 presentation that we are doing something on the marine, industrial and aerospace side. Can you highlight little bit on that, what are our aspirations there? And also what are you exactly doing in the Greaves technology business and where do we aim to take that?

[Arup Basu, executive]

So maybe -- this is Arup Basu, maybe I can answer a little bit on the nonautomotive question that you have. So as you know, we make prime movers. And it's a fuel agnostic approach that we have. So the prime movers go for automotive applications in 3-wheelers, et cetera, and also for nonautomotive applications. So within that, while gensets is one product, which uses engines. There are also other applications for Marine in terms of boats, et cetera, that fly. And we're increasingly seeing an emphasis on river infrastructure, and states with rivers and also coastal movements. So that's one area where we -- where engines are used for prime moving.

There's again a fuel agnostic approach there, and that the demand for that is in a way linked to infrastructure growth and overall underlying economic growth. So that's the work that's going on.

We also are engine provider for fire pumps, which is a very specific specialty application because of the nature of the application of the fire pump. That's another sector that we historically have catered to, and that is also linked to the growth of infrastructure because every high rise that gets created or an office building that gets created requires these measures as part of the basic infrastructure. And those are the ones that whose growth is linked to the overall industry growth.

[Nagesh Basavanhalli, executive]

Yes. And I hope I can just add to the gentleman's other question. So just to add to the non-auto, Keep in mind, in addition to Dr. Basu talking about a lot of the OE applications, there is a non-auto aftermarket application, which Mr. Narasimha, and the GR team leverage, for example, in terms of several different customers, railways, telecom, et cetera, right? So there are a lot of non-auto spares and service applications that the Greaves Retail team addresses. So it was part of our diversification strategy, when you look at our engine volumes going from auto to non-auto, point number one.

Point number two, very briefly, you also touched upon Greaves technologies. That's a small incubated new business, which really does engineering services to some global MNC based primarily out of India, but serving both local and international markets.

What it, of course, gives us is access to high-quality engineering talent, which does engineering services outside but also helps in-house companies like electric mobility or our e-powertrain areas, assimilate some of that technology and assimilate some of that integration. So it's a smaller start-up right now.

[Unknown Attendee]

So what -- where can we see Greaves technology in the next 3 years maybe?

[Nagesh Basavanhalli, executive]

So again, while we don't want to get into forward guidance, but the important thing is, from a competency curve, they started out with a mechanical, mechatronics, vehicle engineering type of services. So they do work for 4-wheeler global auto majors right? And then they're doing vehicle level work from engineering services. They've now got into software and embedded systems. So you can see some of the competency curve moving up the value chain, right?

And you can also see them evolving more in terms of the electric mobility ecosystem because they've been working closely with the Ampere team, right? And both internal and external. They are not captive. We obviously cater to both global and Indian customers. Thank you.

[Operator]

We'll take the next question from the line of Kiran, an Individual Investor.

[Unknown Attendee]

Sir, 2 questions, 2 long-range questions. One on the EV side, Ampere. So if I look at our market share back in '21, '22, it is about 12%. Now on a run rate basis, Vahan data, it's about 3%, both 2-wheeler and 3-wheeler combined. So we are losing market share while the market is growing exponentially. So 2-part question to this, right? One, are we continuing to focus on Tamil Nadu because there's another Tamil Nadu-based player who come up with excellent products in the 2-wheeler space. So I'm just worried that will continue to lead market share. That is one question, if you can address how are we kind of trying to regain market share?

The second question -- second part question is are we trying to do an IPO or a demerger of this EV Mobility business, which will allow us to focus and get the right parameters in?

[Nagesh Basavanhalli, executive]

So I think I'll ask Vijaya Kumar to come in and answer the first part. The second part, I think the CFO has addressed earlier on. The Board has already said in terms of fund raise that they will be looking at a lot of options. That statement is out there. And as and when the Board has an update to that, we will update you on the second part of the question. Mr. Vijaya Kumar, please answer the first question, please.

[K. Kumar, executive]

Yes. Thank you for the question. See from a market share standpoint, first, is that we are registering very robust growth month-on-month, quarter-on-quarter, primarily based on our new product. The Nexus, which we launched 2 quarters before, is doing very well. Our reference sales from our customers based on our service and spare parts availability, after sales service is also doing very, very well.

So now what -- to your specific question of Tamil Nadu and South, our footprint not only in Southern India. Our market shares are and at least double-digit numbers to what you have mentioned in the Eastern region, and we are building our market share and volume trends in North and Western part of India. So we are pan-India organization. And you will be able to see those results and responses as we go forward.

[Unknown Attendee]

Got it, sir. Sir, then from a company strategy perspective, it's very commendable not just EV, right, the overall Greaves Cotton company. It's very commendable that we've got a 6x in 6 years kind of ambition, which was at about 15% CAGR, right? So 15% CAGR. So what I'm struggling with, with a very, very ambitious target, which is fantastic, right? If I look at the last 10-year data, right, you were in March 2014, you were at INR 1,700 crores revenue. Right now, March '24, we closed at INR 2,600 crore revenue, right? So it even doubled in 10 years.

So I'm just trying to figure out if acquisitions are very, very large part of like, is it the delta to INR 10,000 crores from acquisitions coming? Or is it -- are there some business units you are extremely bullish on for the 6x in 6 years? I'm just trying to figure out what suddenly exploded in our industry that we can aspire to 6x in 6 years while we have not even doubled in the last 10 years.

[Nagesh Basavanhalli, executive]

So I think Akhila, the CFO answered that question right, upfront. I think she did mention that at the end of the day, it will be a combination of both organic and inorganic means, right? And the opening of the multiple streams of revenue from a single cylinder single industry diesel engine, which was catering to 300,000 vehicles a year, right? That was a sector Greaves Cotton was in, right. Today, you are playing in diesel plus CNG on the auto side plus electric. So fuel agnostic.

You're playing in auto plus non-auto on the engines and the component side. You're playing in multiple geographies. From the Excel you've added construction of highway marine segments with a predominant version of that being high profitable global exports, right? So that's one vertical.

The second vertical being in retail and somebody asked this question in terms of capital allocation, asset-light, high ROCE business, right? Franchisee -- own franchisee-operated vehicles, franchisee-operated stores. Retail chains, which offer spares, highly profitable spares, right? Again, there, the diversification was going from a 3-wheeler diesel engine spares to 3-wheeler fuel agnostic plus 2-wheeler, plus now with Excel into other markets. So -- plus moving towards the digital ecosystem, right? That's the second.

The third is, of course, the Electric Mobility, which has our own map of its own 2-wheeler and 3-wheeler. So I think when you just look at it organically, the multiple forms of revenue, the multiple applications, the multiple geographies plus inorganic options is what the Board is talking about.

[Operator]

We'll take the next question -- [Operator Instructions] We'll take the next question from [Saket Kapoor] from [Kapoor] Company.

[Unknown Analyst]

Sir, if you could just explain the line item for other expenses for this quarter? What are the -- any one-off items that has gone into it?

[Akhila Balachandar, executive]

Sure. Let me take this. Essentially, other expenses, all other expenses apart from RMC, which includes even employee cost. This includes consulting costs, traveling, all the rudiments, everything, correct? I understand that your question is essentially, it has gone up. As I said earlier, we are also focused on growing new businesses. So we have made investment in resources, in technology and product development and business development.

Now some of these, therefore, will go into the line other businesses. And therefore, there is an increase over the past years compared to past years.

[Unknown Analyst]

Because ma'am for employee benefit expenses that has itself gone up by INR 10 crores quarter-on-quarter and INR 12 crores...

[Akhila Balachandar, executive]

That's correct. If I said we have been investing in the resources, we've been investing in technology, we've been investing in business development, brand building to some extent. And all this is imperative to enable the future growth of the organization.

[Unknown Analyst]

So when can we reap the benefit of that thing. And especially for the category electric mobility and other vehicle segment, wherein we have losses closer to the tune of INR 100 crores for the first half. How should we look at in terms of H2 going ahead? And next question is on the cable and the control lever part wherein -- where are we in terms of the ecosystem for the data center? If you could just give answer of...

[Akhila Balachandar, executive]

Sure, sure. So if you look at Greaves Electric Mobility, like Mr. Vijaya Kumar explained. We have had new launches, both in E2-wheelers and 3-wheelers and there is a good acceptance of that in the market. We have grown quarter-on-quarter 29% in 2-wheelers and 30% in 3-wheelers. And we have a very strong path to profitability. So while I would not be able to give forward guidance, I think some of our past performances can give confidence in our journey ahead.

In terms of cable, push pull cables, can you please repeat the question?

[Unknown Analyst]

Yes, Ma'am. It's regarding the data center ecosystem, are we there as a player supplying to the data center ecosystem in terms of cable or any other...

[Akhila Balachandar, executive]

Sure. In terms of push pull cables, I don't think data center is one of the industries we operate in, but maybe the genset business, which is where we operate in the data center business, that's an upcoming business. And yes, we are very much having our plans to enter that business also.

[Narasimha Jayakumar, executive]

Yes. Akhila, I can add. This is Narasimha here from Greaves Retail. As our -- as Mr. Nagesh mentioned, we have a large noninstitutional nonauto business within Greaves Retail and Greaves Retail is already working on solutions on the lines of energy management services, which cover the telecom and the data center data center segment. So essentially, things like battery packs, the spare parts around that, the maintenance services and so on. So obviously, we won't able to share more details on that. But I just want to let you know that we do play in that segment.

[Operator]

Thank you very much, sir. Ladies and gentlemen, with that we conclude our question-and-answer session. On behalf of Greaves Cotton Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.