recommended Hold rating on Greaves Cotton with a target price of Rs 155 in its research report dated April 15, 2019.
GCL 3W business is expected to remain under pressure over the next two years driven by a shift towards gasoline/CNG engines. Margins drop also projected due to increased costs due to shift to BS6 norms and increased proportion of low margin multi-brand products and electric scooters. Earnings growth likely to decelerate to 5% CAGR over FY2019-2021 period.
Outlook
We retain our Hold recommendation on the stock of Greaves cotton Limited (GCL) with a revised PT of Rs 155.
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