Engine maker and engineering company Greaves Cotton’s diversification strategy, which began four years ago, has paid off amid the pandemic, and the 162-year-old company will continue to invest towards diversification, a top company official said.

During the third quarter of the fiscal year, Greaves Cotton has seen every business vertical growing, except for its auto engines business, due to the pandemic’s impact on shared mobility and commercial vehicles. On a year-on-year basis, in Q3, the company’s auto engines’ business declined by 56 per cent, while non-auto engines grew by 44 per cent. Its genset and light equipment business grew overall by 25 per cent, while its e-mobility products business grew by 28 per cent.

Also read: Greaves Cotton shuts Ranipet plant

“All of our businesses are beginning to grow in double-digits, except our auto engines business, which is obviously in direct correlation to the (three-wheeler) market, which is down 60 per cent. Even when one of our core businesses was down, our new businesses making up almost 30 per cent of revenue, and newer diversification areas, especially in areas of green shoots like e-mobility, retail, and financing, bodes well for our diversification strategy,” Nagesh Basavanhalli, Group CEO & MD, Greaves Cotton Limited, told BusinessLine.

Greaves Cotton, which was traditionally involved in selling automotive diesel engines, has diversified over the last four years into e-mobility, manufacturing of marine engines, engines for defence and construction equipment, sales of spares, third-party after-sales servicing of three-wheelers and financing.

In Q4 of 2017, when Greaves Cotton began its diversification strategy, its quarterly revenue was ₹390 crore; this increased to ₹495 crore in Q3FY21, Basavanhalli pointed out, emphasising how its diversification strategy, both within engines, as well as into newer verticals like e-mobility, genset, etc, are helping the company.

Parallelly, the company is also investing heavily in the e-mobility space, said Basavanhalli, adding it will continue to invest in incremental capacity at its plants.

Also read: Nagesh Basavanhalli takes charge as Greaves Cotton Group CEO, MD

Greaves Cotton first acquired electric vehicle company Ampere in 2018, subsequently completing the acquisition in November 2019. Post lifting of lockdown restrictions, the company has added over 80 new exclusive stores for Ampere, taking the total to over 300 stores. It will continue to add new dealerships on a monthly basis, he said.

The increase in commodity prices remains a challenge on the supply chain side, he said. In December 2020, the company shut down its Ranipet (Tamil Nadu) plant as part of its exercise for consolidation of plants. “When we went from BS-4 to BS-6 (emission norms), we consolidated all of our engine production into Aurangabad — we have two locations (plants) in Aurangabad. We consolidated all of us to get efficiencies in terms of people, overheads, etc.” Through this, the company also wanted to achieve its goal of a 10 per cent long-term reset in its fixed cost base.