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00:00 Good afternoon and welcome to NDTV Profit. On earnings today we are tracking Greaves
00:09 Cotton Limited and we are joined by the CFO Ms. Akila Balachandran. Hello ma'am and
00:14 thank you so much for joining us today here at NDTV Profit. For just the Q4 as well as
00:21 the financial year 24, it was a tough financial year for the company. I just wanted to check
00:27 if you could run us through how the company has performed exponentially according to you.
00:35 What do you see as the key triggers going into the financial year of 2025?
00:42 Thank you so much for having me on NDTV Profit and allowing me to share insights about Greaves
00:49 Cotton's performance for this year FY24. Let me split this in two parts. The Greaves Cotton
00:58 performance on a stand-alone basis, we have done exceptionally well. Our top line grew
01:05 17%, our top line grew 15% and we have registered a decadal high profit of 366 crores. Our margins
01:21 have also grown by 56% and in terms of margin improvement, there again we have done a remarkable
01:29 work of improving by 325 basis points. This brings us back to our pre-COVID levels of
01:38 13% plus margins. If you remember over the last few years, we have been undergoing a
01:45 transformation journey and trying to provide from a single product company to multiple
01:52 products, multi-fuel, fuel agnostic, also improving our product portfolio, applications
02:00 portfolio as well as the geographical reach. All this has played off and in this continuing
02:08 journey FY24, we have been able to deliver good results. Our other company, Greaves Electric
02:16 Mobility. Before that, let me pick up Excel Control Linkage. Last year we had invested
02:24 in Excel Control and I'm happy to share that this has again been an extremely wonderful
02:30 journey for us this year. We grew top line by almost 40% at extremely healthy margins
02:37 of 30% plus. Integration of Excel and Greaves Cotton continues in a very professional and
02:47 sustainable way. In terms of Greaves Electric Mobility, as you are aware, early last year
02:54 we had the notice from MHI. As an organization, we have responded to the government's show
03:02 cost notice. We've also repaid all the demands and we await the next steps from them. This
03:10 has definitely impacted the company's performance. However, the company has put in place a roadmap
03:19 for new product launches as well as a path to profitability. And though it has been a
03:25 challenging year, I think we have done very well to manage the journey so far.
03:33 So I just want to take forward the point that you made on the two-wheeler engine. I think
03:37 from a presentation also we can see that there was roughly on a consolidated levels that
03:42 margins have been impacted majorly. And one of the key components of this has been the
03:47 56% fall in e-two-wheelers. What do you attribute this particular fall to? And I know that the
03:54 company has launched a new product as well. But just in general, I wanted to talk because
03:58 you already have roughly three to four products in the market. So what led to this major fall
04:05 of roughly 56% for the whole financial year of 2024?
04:11 If you remember, we had a notice from MHI and we were removed, blocked from the portal.
04:19 We therefore could not avail the subsidies going forward. We have already responded to
04:27 the notice and we also refunded as per the claims without any prejudice. Parallelly,
04:35 we have continued selling our products, but we do not get the benefit of the subsidy.
04:41 This really has given us a challenging year.
04:46 Going forward, we do see that in the current market, there are roughly two to three legacy
04:51 players which have come back and launched e-two-wheelers, while the existing two private
04:57 majors in the electric scooter market have launched cheaper variants. Looking at this
05:02 market currently, the company has launched a Nexus recently, which is priced above Rs
05:08 1 lakh. I just wanted to get a sense of what the company is seeing because we're seeing
05:12 that most players are going for a cheaper variant to get in more consumers to buy electric
05:17 two-wheelers. So what is the thought process there?
05:22 Our product is targeted at the family segment. It's an extremely high product, high performance
05:29 family product, one of its kind, has multiple features and some of them are first of its
05:36 kind in India. We've also done a complete campaign around it from Kashmir to Kanyakumari
05:44 and in this process, also done multiple records in the India book of records. So we are very
05:52 confident that with this kind of a superior product targeted at the family, we will be
05:58 able to attract the right kind of customers going forward.
06:04 And while you say that the two-wheeler space has been slightly affected and you also mentioned,
06:11 could you quantify the amount that the company has repaid back to either NHI or the consumers
06:16 for the whole financial year of 24?
06:20 Yes. So if you were to go back and see, this has been all disclosed in our financials.
06:30 The MHI notice had asked us to refund Rs. 124 crores plus interest, which is what we
06:39 have refunded back to the government.
06:42 And we've also seen, ma'am, that certain companies have made their plea to the government to
06:47 get back some of the amounts that they were charged. Are you currently in conversations
06:52 with the government for this particular said amount? And what has been the progress? Because
06:56 I believe that this was at the back of Q3, somewhere on October of last year. Suppose
07:02 that what has been the conversation with the government for this specific amount? Has there
07:06 been any progress on getting it back?
07:09 We have on our side, complied with all the requirements of the government and we are
07:16 in constant touch with them. At this point, I will not be able to disclose beyond this
07:24 since the matter is in discussion with the government.
07:26 Understood, ma'am. And one segment that actually has been doing very well for the company is
07:33 the E3 wheelers. I think you all have had a launch also this particular year. How are
07:38 you seeing the market going forward in financial year 25? And I also want to understand which
07:43 are the key states or regions that the company is targeting? Because we've seen a lot of
07:48 competition from the heavyweights also across India who have larger distribution networks.
07:53 So specifically for the company, how are you seeing the next financial year and which are
07:58 the kind of regions do you target that you've already entered per se and looking to enter
08:03 also in this year?
08:06 So the good news is in the three wheeler space, we are back on the portal. So we are eligible
08:12 for subsidies wherever it is applicable. We are seeing a lot of traction and we have plans
08:21 to push far more aggressively going forward. Again, some of these are very specific and
08:28 it will be difficult to get into details at this point in time.
08:33 Any particular region, ma'am, that you can mention? If you are looking at getting into
08:37 West more or North or South is something that the company's stronghold is currently?
08:45 We would have a plan to go on a non-India basis in a very structured manner. I wouldn't
08:53 be able to share details at this point in time.
08:57 And for the electric mobility, if I see for the whole financial year, the revenues are
09:01 down roughly 40 to 45 percent. Now, going forward, since the three wheeler is also on
09:07 track and you also had the Nexus launch in this particular financial year, how are you
09:11 seeing this on revenue growth per se? Do you see that the company will be able to be back
09:17 for this particular segment back in black for financial year 25?
09:23 As you are aware, we've already launched a new range of products, which we see a lot
09:30 of traction on the three wheeler side. Again, we have done multiple launches. We are strengthening
09:36 our distribution network and we see we're back to number five. We have got good traction
09:46 and market share. We will definitely be able to bounce back in FY25, though I will not
09:52 be able to give you any specific guidance on that.
09:55 Hi, welcome. You're watching NDTV Profit. I'm Harsh Saita and we're going to focus in
10:12 on earnings slew of numbers coming through and we have India Shelter Finance, which has
10:16 disclosed its Q4 numbers. Of course, a very strong growth of a low base is how I would
10:23 sum it up. But overall, also, the numbers look fairly healthy. Is this sustainable or
10:28 not? Whether asset quality can sustain or not? We have Mr. Rupinder Singh, who is the
10:32 managing director at India Shelter Finance joining us. Welcome, Mr. Singh.
10:37 Thank you. Thank you so much, Harsh, for inviting me on your show. Thank you.
10:43 Right. Mr. Singh, quickly want to try and understand from you whether this kind of 40
10:48 percent growth, which you've clocked in terms of CAGR over the last three years or so, and
10:54 the almost 40 to 50 percent that you clock consistently on this higher base, is that
10:59 sustainable and what's the thought process for FY25? What's the target?
11:06 I think India Shelter Finance Services is basically plotting the same kind of growth
11:11 from last six, seven years. Affordable housing is the segment which is in demand today. There's
11:20 a set of segments which was not a part of financial inclusion in earlier days. But as
11:25 it is picking up, there's a lot of housing shortage. In fact, one of the data says that
11:32 there's a shortage of nine to ten homes across the country. And most of these houses are
11:38 in the category of low income group or maybe what you said, economically weaker section.
11:45 And India Shelter plays the role of financing these kind of customers who are looking their
11:50 first time homes. So, yes, demand is there and market is also building up, growing up.
11:56 There's a lot of recognition coming along from the customer side and from this overall
12:03 ecosystem. And that is helping us to have this sustainable growth. What we are seeing
12:10 obviously is a lower base and as the time goes, the growth will be there. But I feel
12:16 that 30, 35 percent growth is quite sustainable. 30, 35 percent growth, quite sustainable.
12:22 I want to try and understand from you the spread and margin guidance as we go forward.
12:28 Customers have been largely stable in an otherwise difficult interest rate environment. Tell
12:34 us what helps you stand out and what allows you to maintain that spread. And cost of funds
12:41 also haven't been stopped significantly for you.
12:46 So the customer, what we are targeting belongs to these markets tier two, tier two, which
12:52 as mentioned is not a large financial inclusion. They are most of them the first time home
12:57 of borrowers. In fact, 70, 75 percent of the first time mortgage home of borrowers. And
13:03 a pretty large chunk out of that is a new credit also. So they have this need as well
13:09 as a dream of building their own homes. But obviously, larger ecosystem doesn't support
13:15 that. Where do we play the role? That becomes a quite big support to that piece. So this
13:21 is a demanding market. So the compression or separation of spreads is being taken care
13:27 of because of that piece. On the other side, with the cautious actions towards our treasury
13:33 management, we are able to control also the cost of funds to the largest extent. Thanks
13:40 to institutions like NHB, National Housing Bank, which are always support to institute
13:47 like us who are getting these kind of segments. In fact, today, 15, 16 percent of our funding
13:53 comes from NHB that again at a very, you know, cost, which is very sustainable for us, help
14:00 us to build this business around, which we ultimately pass on to the customers finally.
14:05 So this is a situation which is symbolically strong for customers, for ourselves and government
14:11 initiatives, which comes through in a message from the NHB side. Sure. So as your balance
14:16 sheet grows from 6000 to 8000 crore, is this cost of fund, is this kind of margin trajectory
14:23 sustainable? Is that what one should take away? And not just from six to eight, you'll
14:29 probably double up in the next two to three years. Is the cost of fund as well as the
14:35 margin and spread trajectory going to be very similar? Is that what one can expect? Good
14:40 news is we were rated A+ last year with a positive outlook by CARE and ICRA, one of
14:49 the rating agencies. In fact, in the last quarter of this financial year, quarter four,
14:55 we were rated double A- by one of the leading rating agencies, India Rating. So the rating
15:02 also supports somewhere when you are discussing the banks to get funds out that side and helps
15:08 to bring down cost of funding some way. And we also have, you know, expectation that once
15:16 elections are over, the new interim budget comes, there are always benefit which comes
15:21 from the government side to NHB, toward the sector particularly. So these are a few points
15:28 which gives a positive note on that side. And I think even the rate cycles remain consistent
15:36 in market, what is running today. Still, with these couple of new tractions, we will be
15:41 able to get actually benefit of 15 to 20 bps this year. And as time progress, your increasing
15:47 of balance sheet is increasing, you become a part of a larger ecosystem, then this cost
15:52 of fund is also going to come in a better way. Having said so, our base is largely tier
15:58 three, tier four markets, and we are expanding ourselves into these markets as the penetration
16:03 keep going on. This is a set of customer which we want to cater. So I feel maintaining spread
16:08 of 6% is not a challenge for us.
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