Greaves Cotton sells German arm, reports Rs 8 cr loss

Company to also shut down foundry business in restructuring excercise

Engineering company Greaves Cotton has sold its German subsidiary and has also decided to shut down its foundry in Pune in a business restructuring exercise. The engineering company reported a net stand alone  loss of Rs 8 crore for second quarter FY 2014 as against a profit of Rs 34 crore for same period last year.

Revenue fell from Rs 451 crore to Rs 448 crore but the result was impacted by provisioning due to sale of its German subsidiary. The company did not report consolidated figure but said the profit was affected due to "divestment in Greaves Farymann Diesel GmbH.  With global business sentiments at an all time low, and Greaves Farymann Diesel GmbH not performing to expectations, the strategic business decision to exit was taken in the long term interest of Greaves Cotton Limited.''  The Pune foundry is being shut as it not equipped to manufacture new types of engines.

“The three-wheeler automobile market, the construction equipment market and the pump market is currently going through a challenging business scenario. We have successfully been able to consolidate our market presence, maintained market shares and in some segments even increased market share.  Greaves has been able to maintain top line by focusing on product development and superior customer satisfaction. The focused efforts and several initiatives have resulted in reducing costs and in maintaining profitability of the businesses.   International business has grown significantly and it is heartening to note that our strategy of widening global foot print across strategic markets of Middle East, East Africa and South East Asia have yielded positive response,''   Sunil Pahilajani, MD & CEO said in a statement.