2023-11-07 12:10:00
Indian company Greaves Cotton reported a second-quarter loss on Tuesday, due to a one-off charge linked to a government incentive for electric scooter sales and higher expenses.
The company posted a consolidated loss of 1.91 billion rupees ($22.9 million) for the quarter ended September 30, compared with a profit of 288.8 million rupees last year.
In May, Greaves received a notice from the Indian government, which claimed its electric vehicle unit had failed to comply with guidelines for an incentive program for the sale of electric scooters, and asked it to return the claimed subsidies.
Separately, the government reduced financial incentives for electric scooters in May without providing an explanation, declaring that it would now pay only 15% of the price excluding taxes, compared to 40% previously.
Greaves, which also makes engines and powertrains, declared a subsidy-related provision of 4.77 billion rupees. Its overall exceptional charge amounted to Rs 3.81 billion, mainly due to a gain from the sale of land.
The company had posted a loss of Rs 50.8 million in the previous quarter as sales of its ‘Ampere’ branded electric scooters were hit by subsidy cuts.
Quarterly expenses increased 4.5%, outpacing revenue growth of 4%. While the revenue of its largest segment – motors – increased by 20%, the electric mobility segment recorded a decline of 37%.
Shares closed flat and are down 12.3% since its unit received government notice proposing it be removed from the incentive scheme. ($1 = 83.2458 Indian rupees) (Reporting by Nandan Mandayam in Bengaluru; Editing by Subhranshu Sahu and Varun HK)
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