Earnings Call Transcript - XNSE:GREAVESCOT 2026-10-29

Operator

Ladies and gentlemen, with you and welcome to Greaves Cartoon Ltd. due to an H1FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kale, Head Investor Donations, Greaves Cotton Limited. Thank you and over to you, sir.

Ashish Kale, Head of Investor Relations

Thank you, Ibra. Good afternoon, ladies and gentlemen, and a very warm welcome to Greaves Cotton's Q2 FY27 earnings conference call. The financial results and the investment presentation for the quarter ended 30th September 2026 have been filed with the stock exchanges and are also available on the company's website. I hope you had an opportunity to review them. From the management team today, we have with us Mr. Parag Saadpute, MD and Group CEO, Mr. Vikas Singh, MD of Greaves Electric Mobility Ltd., and Mr. Manish Poddar, Group CFO. We'll begin with opening remarks from the management, following which we'll open the floor for questions. Before we begin, a brief disclaimer. Today's discussion may contain certain forward-looking statements relating to the company's business prospects, strategy, and financial performance. These statements are subject to risk and uncertainties, and actual results may differ materially. We request participants to refer to the disclaimer included in the investor presentation. I will now hand over the call to Parag to take us through the performance of the company and the progress on our strategic priorities. Over to you, Parag.

Parag Sadpute, CEO

Thank you, Ashish, and good afternoon, everyone, and thank you for joining us today. Quarter 2 has been another quarter of strong business momentum, and we see continued progress in the execution of our strategy named Greaves.next. Let me begin with three key messages for this quarter. The first one, we delivered a strong revenue growth across our businesses, and we see very Thank you. Started showing results, but continued cost inflation has offset some of these gains. I can assure you that improving profitability remains an important management priority. Now, let me begin with the headline numbers. At a consolidated level, we recorded a revenue of 1,176 crores, representing a year-on-year growth of 44%. For the first half of this year, consolidated revenue came in at $2,150 crores, which is 38% growth. Importantly, our core businesses continue to demonstrate strong momentum, growing 24% year-on-year in quarter two and 20% during the first half. This represents an acceleration from the growth we reported in quarter one and therefore reinforces our confidence in the underlying strength of our business. As I've shared in earlier calls, Greaves.next is about building on our strong engineering and manufacturing heritage to create a more diversified and a technology-led Greaves. Our focus has been on accelerating the core businesses, building new capabilities, and creating additional avenues for sustainable growth. I'm happy to say we are now seeing these priorities translate into tangible business outcomes. So, let me take you through the performance of the three core business segments. As usual, I'll start with Energy Solutions. This business continued its strong growth momentum, and we saw a healthy demand across infrastructure, manufacturing, commercial, and industrial applications. During this quarter, Energy Solutions grew 36% year-on-year, compared with the 21% growth in the previous quarter. One of our strategic priorities within this business has been to strengthen our position in the medium to high horsepower genset market. And I'm very pleased to share that our medium horsepower, which we call MHP genset portfolio, covering the 160 to 750 kVA range, grew 35% during the first half of FY27 compared to a 28% growth of the overall business. This is encouraging as it demonstrates the traction we are gaining in the market segments where we have deliberately chosen to strengthen our presence. International expansion is another priority for this business, and during this quarter, we completed the first batch of enhanced gensets developed for a key market in the Middle East. This is again a tangible step forward, and we will build on our export presence to strengthen our ability to serve international customers. Overall, we remain positive about the opportunity in energy solutions. Our focus will be on sustaining this growth, continuing to strengthen our competitive position, and building a larger domestic and international business. Moving on to mobility solutions. Here, our strategy is to leverage our established OEM relationship and our engineering capabilities. We believe different powertrain technologies will coexist for the foreseeable future. Our approach, therefore, to remain competitive in existing applications while developing capabilities required for new technologies. Along these lines, our automotive engine business delivered another strong quarter, growing 37% year-on-year, supported by healthy demand across three-wheeler and four-wheeler applications. During this quarter, we also launched a new 470cc diesel engine for three-wheeler applications, further strengthening our product offering. I will now turn to engineered components within our mobility solution space, the company that you know as Excel Control Linkages. Excel delivered a very strong quarter with a 30% year-on-year growth, and this is supported by new product orders and new customer wins. This follows the return to growth we reported already in Q1 and reflects the progress being made in strengthening the business. During this quarter, we completed the acquisition of 20% of the stake in Excel, now making it a wholly-owned subsidiary of Greaves Cotton. This is an important strategic milestone for us. As we have outlined in Greaves.next, we see a significant opportunity to build a stronger automotive components business. Our strategy here is to progressively move up the value chain from individual components such as control cables towards more high value added assemblies and integrated engineering solutions. And Excel provides us with an established platform, strong customer relationships, and the engineering capabilities to pursue this opportunity. We intend to build on this foundation through organic growth, deeper customer engagement, and selective opportunities to broaden our capabilities. So, overall, mobility solutions grew 23% year-on-year during Q2 compared with 18% in Q1. I will move to industrial solutions now. The reported revenue here remained broadly flat year-on-year during the quarter. However, if you remember, we had taken some portfolio rationalization decisions earlier. So, if you adjust for that, the business delivered a 9% like-for-like growth. Our focus on industrial solutions is to strengthen the portfolio through differentiated products and specialized applications and selective international opportunities. During this quarter, therefore, we launched a new 750 HP firefighting engine and unveiled prototypes for a 160cc gasoline engine. These developments reflect our ongoing efforts to broaden the product portfolio and get into new customer applications. We see opportunities in segments where reliability, durability, and engineering precision are very important, and where our manufacturing and product development capabilities can provide us a competitive edge. We will continue to focus on these priorities. So that was the business segments. Let me talk now about profitability. While we are encouraged by the strong revenue growth across our business, margins remain under pressure during the quarter. As we discussed in our previous call, we had initiated a series of actions covering pricing, cost optimization, and operating efficiency to address the impact of rising input costs. These actions have started delivering results, particularly on the pricing front. However, commodity and other input costs have continued to rise, offsetting some of these gains. And therefore, the improvement in margins has been slower than we had anticipated. We are responding to this, and we continue to focus on pricing discipline, value engineering, and productivity improvements, along with tight cost management. At the same time, we are maintaining a clear distinction between costs that can be optimized and investments that are essential for our future competitiveness. Now, as we move into the second half of the year, improving profitability and converting our strong revenue growth into better operating earnings will be a key management priority. We believe the actions we are taking are directionally right, and we remain focused on accelerating their impact while navigating the evolving cost environment. Our CFO, Manish, will provide further details on the financial performance and margin improvement initiatives along the way. Let me briefly touch upon the investee businesses. Greaves Electric Mobility and Greaves Finance remain important components of our broader portfolio and our ambition to participate in the evolving mobility ecosystem. During the quarter, we completed the investment in Greaves Electric Mobility that we had discussed in our previous call. Our focus remains on supporting the development of this business while maintaining discipline around capital allocation and long-term value creation. Vikas will take you through the performance of Greaves Electric Mobility in greater detail soon. Now, let me step back a little bit from these quarterly numbers and share a few thoughts on the broader progress of our strategy, Greaves.next. When we embarked on this transformation, our ambition was to build on Greaves' strong industrial and engineering heritage, while repositioning the group for opportunities emerging in energy and mobility. We recognized that this would require not just a sharper business strategy, but also new capabilities, stronger leadership, improved execution, and a more outward-looking organization. Over the past several quarters, we have made significant progress in putting these foundations in place. What is particularly encouraging now is that we are beginning to see these efforts translate into tangible business outcomes. So across the businesses, the common theme is clear. We are progressing, increasing the engineering content, differentiation, and value addition in our portfolio. Touching upon capital allocation then, like I said, we completed investments in Greaves Electric Mobility and acquired the remaining stake in Excel Control Linkage. Both of these investments are very well aligned with our strategic priorities. At the same time, we continue to evaluate opportunities to strengthen our business portfolio through partnerships and selective inorganic growth. Our approach to these opportunities will remain disciplined. We will focus on businesses and capabilities that are strategically relevant, which will complement our strengths and offer potential for sustainable returns. We are very conscious that long-term shareholder value is created not simply through growth, but through quality of the growth and the returns generated on the capital deployed. This will remain an important consideration as we take Greaves.next forward. We remain committed to executing on this agenda with speed and simplicity and the discipline that underpeens Greaves.next. So with that, I complete the update on the Greaves core business. I will now hand over to Vikas, who will take you through the performance of Greaves Electric Mobility. Over to you, Vikas.

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Thank you, Parag. Good evening, everyone. Once again, thank you very much for joining us today. It's a pleasure to be sharing the results of Greaves Electric Mobility on behalf of the team with you. I am pleased to share that the momentum at Greenfield Electric Mobility continues to build with each quarter setting a new benchmark. Quarter 2 full year 27 was our highest ever quarter for volumes and also on top line across both our electric two-wheeler and our L5 three-wheeler businesses. E2-wheeler businesses recorded volumes of over 37,000 units with a 114% year-on-year growth for quarter-227, while the L5 three-wheeler business recorded nearly 2,800 units at 61% year-on-year growth. Let me begin with sharing some of the updates on the key drivers of our record volume numbers before moving into the financials. In the electric two-wheeler segment, our registration volumes on Vahen also doubled and grew at 107% year-on-year in H-127 over 26 to almost about 53,700 units. Our H-1 billing volumes reached almost 91% of our full year 26 volumes in this period. Our market share improved to 4.8% in H-127 versus 4.1% in H-126, with a peak market share of 5.6% in June 26. As you can see, there has been a steady and continuous buildup in share as we keep going along. We have established pockets of market leadership in certain highly challenging markets. We are a top two player in Tamil Nadu and Bihar for quarter 227, and ranking number one in Bihar at about an 18% share, and number two in Tamil Nadu at about 15% share, while also having a 7% plus share for southern and eastern markets, which contribute to just about half of the overall industry volumes. Beyond this, very importantly, we rank amongst the top 3 E2 Wheeler players in about 35 percent of the RTOs that we serve and have on top of this gained share year on year in over 60 percent of the RTOs that we serve. So, once again, as per plan, well on course to building share in a sustained and steady basis. This growth has been driven by several key initiatives, network, alternate channels, new product introductions, and building on the low speed segment growth. Our network is growing rapidly, both in terms of number of dealers, as well as the average throughput per dealer. In H-127, we issued LOIs for 160 new dealerships, while the existing dealers also opened nearly 20 new branches. Very importantly, again, dealer throughput has improved by almost 40% year-on-year per dealer from 18 to 25 units per month. Our B2B volumes also grew 18% year-on-year in H1 with multiple new fleet accounts reducing our dependence on any single customer. We have also ramped up our presence on e-commerce platforms, which have helped drive almost three times the volume growth over the same period last year. In the slow speed segment, RioWide has been well received by customers as a safe and reliable option and has played a critical role in our growth journey. Alongside the core scooter business, we have built additional levers for revenue and margins through the introduction of IOT solutions on our products and various accessories, which are generating significantly higher margins while driving incremental realizations. In our L5 three-wheeler business too, quarter two was our highest ever quarter, with a billing of about 2,800 units, up 61% year-on-year, whereas Vahen registrations increased by 74% year-on-year. Our focus now firmly relies in strengthening our network in northern and eastern regions, where the largest share of the EV industry volumes currently reside. With this, I now move on to our financials. Our consolidated revenue in H-127 is at almost 680 crores versus 335 crores same time last year. Our two-wheeler revenue in Q2 moved up 134% year-on-year and was at 350 crores, and our L5 three-wheeler revenue moved up 55% year-on-year and was at almost 60 crores. At an H1 level, Consol, we are growing at almost about 103% with 130% plus growth in the two-wheeler segment. The increased scale benefits are flowing through to our bottom line, as evident from our unit economics trajectory. Our average realization in E2 Wheeler for the quarter improved by 5,000 rupees to roughly about 93,000 per unit without any compromise on our volumes. Our EBITDA losses per unit in two-wheeler have come down by 70% in Q2 from roughly about 20,000 per unit to less than 6,300 rupees per unit, indicating a strong and quick path to profitability. Our EBITDA margins in E2 Wheeler have also come down. Our EBITDA losses have significantly come down from roughly about 24% negative in Q2 26 last year to negative It is 7 percent in Q2 this year. Our overall cash burn for the E2 wheeler business has touched a record low single digit per month and we expect that to break even fairly soon. On the technology front, our R&D team has secured a design registration for the new ferrite assisted synchronous reluctance motor developed in house. This is essentially a rare earth This motor architecture, besides using no rare earth magnetic material, also lowers our dependence on imported rare earth minerals from China, and deepens the localization of our powertrain. Deployment will begin with our two-wheeler portfolio very soon, followed through with new product introductions in quarter-four 27th. We have also upgraded our scooters with new performance and technology features under Intellipack, our connectivity suite. We upgraded the new upgraded Nexus EX Plus comes with a more powerful 5 kilowatt motor with high upgradability along with Intellipack. The Magnus G-Packs with Intellipack offers over 30 plus connected features through the Ampere Connect app, including cruise control, tail hold assist, find my scooter, turn by turn navigation, Thank you. Thank you. Thank you. Thank you. Validating the superior reliability, durability, and technology of the product. We amplified the product campaigns with print advertising in key markets and with outdoor support and digital campaigns, garnering over 3 million views on social media. In September 26, Ampere also recorded its highest ever brand searches, up 23.6% above August 26. But very importantly, Finally, this culminated in our website traffic nearly doubling from H1 last year to H1 this year from 1.1 million to 2.1 million per year. Finally, our scooters continue to earn recognitions. The GMAX was named Family Scooter of the Year 26 at the Times Drive Water Summit Awards, and we are proud to offer award-winning electric scooters to our Indian customers. Our vehicles Thank you, Vikas.

Manish Poddar, CFO

Hi, this is Manish Pudar. Good evening, everybody. On the financial performance, I'll quickly just run you through. On the consultant basis, our revenue increased 44% YOY from 1166 crores to 815 crores in Q2. Correspondingly, for H1, consolidated revenue stand at 2150 crores, a 38% increase over 1561 crores corresponding period last year. EBITDA margin also showed robust growth of 43% YOY despite commodity pressures through H1 this year. On QQ basis, we improved EBITDA margin marginally from 5.8% in Q1 to 6.2% in Q2 on a consoled basis. For our core business, we reported at 768 crores of revenue compared to 621 crores earlier last year, representing a 24% increase. Similarly, for H1, we grew at 20%, 1478 crores compared to 1233 crores. Greaves electric mobility on a console basis also reported a 410 crore revenue, up 106% versus 199 crores last year, quarter two. On margins, the impact of commodity inflation and lag in passing on to the higher cost continued in Q2. We began implementing price increases in parts for the business during the quarter and shall continue through rest of the year. However, pricing arrangements in B2B stroke OEM ecosystem typically operate with a lag. We therefore expect the full company-wide benefit of these actions to be reflected by Q4 of FY27. Alongside pricing increase, we have intensified our cost optimization, value engineering programs to support profitability. Thank you. We also recognized certain exceptions to non-recurring expenses in Q2 of financial aid 27 that affected reported profits from DAX. Following a further review of the brands, goodwill, and other intangible assets, we accelerated amortization of relevant intangible assets and recognized impairment charges against carrying value of brands and goodwill. We also had a one-off expense charge linked to the planned IPO for GEML. The resulting impact on GCL's consolidated financial statements comprised 27 crores of accelerated depreciation and 33 crores of exceptional item. Kindly refer slide number 34 for further details and notes to the published accounts. Moving on to the capital allocation, we invested 331 crores in VG EML's rights issue, and we invested 112 crores to acquire the balance 20% stake at Excel Control Links. On investor disclosures, we earlier introduced revised segment, a separate core business profit and loss statement, a three-year revenue bridge, and a separate disclosure on the conventional three-wheeler diesel engine business in Q1. Starting this quarter, we are also providing additional operational and financial information on GEML, along with the select indicators for the core business. We continue to be guided by the investor feedback to enhance disclosures to enable better understanding of our business. With this, I hand over back to Ikra, our moderator.

Operator

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use Ghemthats while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Deepak Ajmera from Elpro International Limited. Please go ahead.

Deepak Ajmera, Analyst — Elpro International Limited

Yeah, hello. Am I audible? Thank you for the opportunity. I have a question on the Greece mobility side, electric mobility side. Though we have very less utilization currently, on an average monthly volume basis, how much capacity do we have, and at what level do you see break-even could happen in terms of the volume?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Yeah, hi. Our monthly capacity is ballpark at about 40,000 per month. At this point in time our utilization is now reaching about 40 percent. We would expect at the rate the volumes are moving this capacity to cover us for the next couple of years ahead. At these existing volumes in terms of the latest growth month on month, we would expect break even to happen fairly soon, not in a position to I am not going to give you an exact timeline, but we are running ahead of plan and versus whatever we had planned in the past. We should be looking at break-even numbers significantly ahead from a time point of view, time horizon point of view. Hope that addresses your question.

Deepak Ajmera, Analyst — Elpro International Limited

Okay, got it. And could you please share any expected timeline for the GML IPO?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Once again, this is a conversation which is underway with the IPO committee. We are constantly We are completely scanning the markets. We are scanning in terms of how the overall trajectory is likely to move on enterprise valuation. At this point in time, with the rights equity being completely subscribed to, we are well funded. We would choose the right time on when to go for the IPO, hence no definite date at this point in time being stated on this account. Thank you. Thank you. Thank you for the project.

Operator

Thank you. Next question is from the line of Naveet Virani from Bashan Research. Please go ahead.

Naveet Virani, Analyst — Bashan Research

Hello. Am I audible?

Operator

Yes.

Naveet Virani, Analyst — Bashan Research

Yes, please. Hi, team. Thank you for the opportunity and also for the updated presentation. Very helpful data points there. So, first question is regarding the commodity pressure that you alluded to in your opening remarks. So, two parts to it. First one, can you please call out what are these top two, three commodities which are putting pressure, that's it. And second one is what do you think is the steady state, you know, gross margins, if you can give an assessment of that, that would be helpful.

Manish Poddar, CFO

Kindly, can you please repeat the first question we didn't get.

Naveet Virani, Analyst — Bashan Research

Yeah, the first question is, can you call out those top two, three commodities which are, you know, putting pressure right now?

Manish Poddar, CFO

Sure, sure. So, aluminum, iron, copper, PGM, the, you know, platinum group of metals are the three, four broad buckets, which is made for the engines as in, you know, and the ginsets. That's where the commodity impact is being faced and impacted to the company. On a steady-state basis, I think in Grease.next, we have mentioned 13% to 15% of EBITDA margin. On a mid-to-long-term basis, we absolutely are committed to that. And I think last time I referred that H2 will be better than H1 on the margin side. There's no reason for us to leave it from that at this stage.

Naveet Virani, Analyst — Bashan Research

Perfect. Thank you for that clarity. My second question is to Vikash, sir. So, in this new two-wheeler business, we saw solid improvement in the loss for vehicle that we were in the treasure. So, I just want to understand, is there any abnormal component that you may want to call out here, or are these gains more sustainable in your area?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

So, well, the usual pressures from commodity pricing, et cetera, continue. They apply to our sector also, and however, it is important for us to ensure that from a product and pricing strategy and also a market penetration strategy, we are able to design product solutions and pricing propositions which allow us to mitigate this risk and also reduce the loss of the unit. I think these have been working extremely well for us, and that is the reason why on a continuous and consistent basis, quarter on quarter, loss per unit has been falling sharply, and we expect this trajectory to continue unless, of course, there is something post-major that one can't plan for. Thanks.

Naveet Virani, Analyst — Bashan Research

One more question, if I may. So, I mean, if you can correctly if I'm wrong, but we were

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

I'm sorry, can you repeat the last bit of your question, heads up?

Naveet Virani, Analyst — Bashan Research

I just want to understand that this, you know, innovative, you know, material that we have, you know, developed in-house, does that give us a head start which is better than PIRS or is it's normal development?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Well, I would not want to comment on peers on this call, but the one thing I can tell you is that the new motor from a performance metrics point of view beats the traditional ferrite, sorry rare earth motor on all counts and we also have a cost optimization coming through as a function of the design. So you have a performance improvement and you also have a cost reduction and we would be looking to this going operational very, very soon like I said. So, this would be another big plus for us as far as we are concerned. Thank you.

Naveet Virani, Analyst — Bashan Research

Thank you for answering all my questions. Thank you.

Operator

Next question is from the line of Ankur Maheshwari from Old Rise and West. Please go ahead.

Ankur Maheshwari, Analyst — Old Rise and West

Yeah, hi. Thanks for the opportunity. Just since there is a scarcity or the limited supply available from the other players in the industry, and we are like, the sales data is around 10,000 vehicles per month. And so, and our capacity is like utilization is lower, so can't we pedal on the core cells and encase this opportunity by expanding further?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Yeah, thank you. Thank you for the question. If you see the way the volumes are moving every quarter and with a 100% growth year on year, which translates into a 100% growth of quarter on quarter over the same time last year, I can firmly assure you that the pedal is fully pressed on what best can happen. And we are very confident that we should be, you know, able to meet demand through capacity expansion, the complete demand through capacity expansion very soon.

Ankur Maheshwari, Analyst — Old Rise and West

And on the price increase size, rupees 5000 is enough or going forward we will increase I

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

think, again, this is a fairly dynamic situation. So, you need to get the best balance of price, margin, and volume. And that is something that we keep scanning the market for. Enhancing product propositions like we've done with the Intellipack, the new IoT solution, more powerful motors, higher capacity batteries, allows us to leverage a better pricing premium. So, it is a combination of product features, priorities, volumes, et cetera, on the basis of which pricing decisions are taken, and we obviously will keep scanning for the same as appropriate. Thank you.

Ankur Maheshwari, Analyst — Old Rise and West

Got it. Last question from my side, in case I can see, what we are doing to increase the brand perception or the brand image site?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

So, we are investing significantly in creating awareness, creating touch points, our entire positioning is built for Bharat, we are very clearly and firmly placed in the value segment, we believe the target market is clearly the combustion scooters and motorcycles, and our proposition therefore addresses to this entire segment. You may remember in my update, I also mentioned as a function of all the investments that we We are making the search volumes have doubled versus same time last year. Search is a lead indicator in terms of potential demand coming in. So, if the search is doubled, the volumes are doubling and by and large all other metrics are tracking in the right direction. I would believe from a brand point of view also, we are firmly in the consideration set. As long as we keep expanding footprint, product portfolio, competitive, good product propositions, I think directionally, we should be tracking well. Thank you.

Ankur Maheshwari, Analyst — Old Rise and West

Thank you.

Operator

Thank you. Next question is from the line of Anubhav Mukherjee from Preston Capital. Please go ahead.

Anubhav Mukherjee, Analyst — Preston Capital

Hello, am I audible?

Operator

Yes, you are audible.

Anubhav Mukherjee, Analyst — Preston Capital

Thanks for the opportunity. So, my first question is, compared to our 28% growth in the JSA business, how has the MHP segment grown? Have we increased our market share or our growth has been in line with the industry? Some color on that.

Parag Sadpute, CEO

Thank you for your question. And also, I think that you picked up on this very specific point, because in our strategy in Greaves.next, we have said that we believe our MHP portfolio is very strong and we want to double down and increase our share. So our MHP segment actually for the first half of this year has grown by 35%, while the overall energy solutions business for the first half grew by 25-28%. And as a consequence of that, our market share has also increased. So confirming what you asked, we are focusing on that, and as a consequence, we are seeing an increase in market share.

Anubhav Mukherjee, Analyst — Preston Capital

Great. And in this MHP segment from 160 to 750 KVA that you focus on, is your product portfolio complete or are there certain gaps and you are launching products at certain nodes to fill that gap? Again, some details on that will be useful.

Parag Sadpute, CEO

So, our product portfolio in what we call MHP today, and which I state is complete, we have a full range of products. What we have been doing is trying to expand that upward. So, the upper end of the MHP, which is HHP, up from 625 to 650, we launched a couple of quarters ago. But MHP is fully complete, not just the Gensep itself, but also our whole solution, including up to market.

Anubhav Mukherjee, Analyst — Preston Capital

I get that. And in the Genset business, is the field entirely domestic or do we export? And is there a focus on increasing export? Have we identified certain markets?

Parag Sadpute, CEO

Yes, yes. Now, again, coming back to what I have stated in previous calls in my strategy, today the bulk of our business is domestic. But we have identified the Middle East and Africa as our focus markets. Of course, we need to upgrade, enhance our products to fit the application conditions there. And like I said in my opening remarks, we have been working on that product enhancement. And during this quarter, actually, we shipped our first batch of gensets to the Middle East to a very key market. And that marks us a step forward. Obviously, we have also set up an entity in the Middle East. I talked about that during my last quarterly call. And we are not only building a sales team there, but we are also building capability to service the products.

Anubhav Mukherjee, Analyst — Preston Capital

Get that. And in the mobility solution business, like, exports have declined 4% in H1. So, like, can you explain the reason for that? And what are the, like, what is our focus area in, like, adding more OEMs and growing the export business? Yeah.

Parag Sadpute, CEO

Right. So, I wouldn't say exports have declined. They have kind of remained flat, but the domestic business has grown faster. So, we have seen a very strong tailwind in the commercial vehicle industry in India, both in the three-wheeler as well as the heavy commercial vehicle. So that part of the business grew much faster, and therefore, exports contribution has slightly reduced. Other than that, we see that the export business is resilient and sustainable. We continue to be the sole suppliers to our customer leisure for the engines for their microcars, and we are seeing good progress now in exports of auto components through the Excel business portfolio. And at the moment, just to add to

Manish Poddar, CFO

this, I think in auto, being B2B primarily, you'll see the growth not being linear in exports. You'll see more on the steps as you get the new acquisitions and key account management. I think that's where it's an important piece for us to understand the growth trajectory as we expect in the long run.

Anubhav Mukherjee, Analyst — Preston Capital

Thanks for the clarification. And just again, like getting some clarity. So, is the exports mainly to the French OEM only or like are we looking to add or have we added any other OEM?

Parag Sadpute, CEO

For the engines business, our largest customer is the French OEM. There are a number of discussions, some at advanced stages for engines. But apart from engines, like I mentioned, Excel also supplies auto components and marine components to multiple customers in Europe, as well as other parts of the world.

Anubhav Mukherjee, Analyst — Preston Capital

I get that. And in the domestic engine business, like, apart from diesel engines, is there, like, do we supply, like, petrol engines, and how large is that, and is there a focus to grow that business, any new segment you are adding? Yeah.

Parag Sadpute, CEO

So, if you look at our domestic auto business, which is focused on the three-wheelers, lion's share, or the largest part, is diesel engines. That's how the market is. In our product portfolio, we also have CNG engines, and we have some business with that. But that continues to be a small part of the portfolio. Also, we do not see the overall fuel mix. We do not see that CNG is growing dramatically. We see that the share is remaining stable. So, I would say in this quarter, we saw a very strong demand for the core engines, which is the diesel engines for three-wheelers.

Anubhav Mukherjee, Analyst — Preston Capital

Okay, good. And in the industrial solution business, can you share what are the top four-size applications for you, like for the engines here?

Parag Sadpute, CEO

Yeah, I can share that. And I think I have commented on this on previous calls. One of the very interesting applications where we have a very strong position is the firefighting engines, so engines for firefighting pumps, where we have a very strong position in domestic market, and we have started to make some strides in international business. That's number one. Then we have a set of products for the marine industry, which is largely sold in India. That is also quite resilient. We sell our engines into agriculture segment, where they're used for power tillers or for pumps in the agricultural segments. And then, of course, into the multiple applications in the small construction equipment. I would say those would be the four top application areas.

Anubhav Mukherjee, Analyst — Preston Capital

I get that. And the industrial solutions business has slightly flattened or been grown in H1. Given like construction equipment sales and all have been quite strong. So like what has like led to like flat kind of revenues?

Parag Sadpute, CEO

So, it has grown by 9%. See, actually, what you should look at, last year, we took a decision to exit a farm equipment business. We were making not just the engines, but equipment also, which were going into the domestic farming sector. We realized that's a very comparative space also being impacted significantly from imports from China. So, we took a strategic decision to exit that market. So, when you compare last year numbers to this year, there is the farm equipment business in the last year's number. If you take that out, then that business, like for like, has grown by 9%. And, by the way, this could grow further, and that's why we are focusing going forward on to new applications.

Anubhav Mukherjee, Analyst — Preston Capital

Can we elaborate, like, what are some new applications that we're looking at? And also, again, is export a focus area in this segment as well?

Parag Sadpute, CEO

Yeah. If you look at that area, new applications and export, firefighting engines is a very important segment we have identified. And globally, the FMUL certification is a very key differentiator, and there are very few companies in the world who have that. We have got our product portfolio certified for that, and we are now in advanced discussion with multiple global customers, and so that we expect to be a focus area. In that space, we also launched a new product this quarter, the 750 HP firefighting engine, and that will help to grow the business. So that's one focus area. The other area is under the green.next strategy, we have decided to get into the small 80cc and 160cc gasoline engines. And during this quarter, we unveiled our first prototype of the 160cc gasoline engine, and our dealers through which we sell, our channel partners, were very excited and positive about the product itself and the potential applications there.

Anubhav Mukherjee, Analyst — Preston Capital

Thanks. This is very useful. So, my final question is, for this core business, the margin shrinkage that we have seen year on year. So, can you give some more color on, like, which are the, of these three segments, which is facing more margin pressure, and, like, what are the steps being taken?

Operator

I'm so sorry to interrupt, Anubhav. You may please rejoin, okay, for more questions.

Anubhav Mukherjee, Analyst — Preston Capital

Okay, thanks.

Operator

Thank you. Next question is from the line of Dushar Bora from MK Ventures. Please go ahead.

Tushar Bora, Analyst — MK Ventures

Yeah, thank you for the opportunity. Sir, my first question is, let's say, compared to our competitors in the core engineering business, let's say, taking Cummins, India, and Kirlosco Royal Engines as a reference point. Where are we vis-a-vis them in terms of the product range, penetration, and key segments, wherever they are present and leaders? What are the steps you are taking to increase our market share and grow faster than the industry? While you mentioned a lot of initiatives across the overall portfolio, but specifically keeping these two as a competition in mind, if you can just highlight these specific segments.

Parag Sadpute, CEO

Hi, Tushar. Good to have your question. And coming to what you're addressing, yes, we have recognized that we have certain strong areas, and we want to double down on those. And I was answering one of the previous participants about our strength in the MHP and how our focus there has helped to increase our market share there. So that is definitely going to continue to be our focus. We have also started to expand our range in the high horsepower. Again, I mentioned that. So, in just two quarters ago, we launched the 625 and 650 kVA, and we are starting to see good progress on that. So, we will continue to work in this way. Some engines we are developing internally, and in the very high horsepower range, we have got a strong strategic partner who supplies us the engines, And we continue to partner with them so as to offer a complete product program to our channel partners and our customers.

Tushar Bora, Analyst — MK Ventures

Sir, my second question, sir, is that over the last six quarters or so since you have taken over, we've seen a lot of strategy changes. Obviously, we've strengthened the investments in a few of our investing companies and subsidiaries. I think we now have 100% share in Excel. Also, we've seen a lot of, you know, whether it's an extended, accelerated depreciation or review of different segments in different parts of the portfolio. A lot of that has already happened. So, where exactly are we in terms of, you know, portfolio optimization and all these one-offs and strategic write-offs, etc.? Do we expect that we are maybe close to the end of that exercise and the margin profile incrementally, Barring the commodity pressures, will be more stable and aligned with the growth objectives?

Parag Sadpute, CEO

Yeah, I think the answer lies in your question. When we looked at a new strategy and where we really did a full portfolio review and launched Grease.next, which was November last year, that's when we took some of the major portfolio calls. We exited a number of businesses within retail. If you recall, we were trying to really do a lot of things. We exited that. And as a consequence, our retail business has become very, very healthy and returned to being the cash generating engine that it used to be. We exited things like the palm equipment business where the margins were very low. And we have seen the benefit of that within the industrial solutions segment that we have. And we now continue to build on this solid platform. So, we believe all the key portfolio decisions that were to be taken for this stage of our business plan have been addressed, and we can focus then on execution and making sure we continue to grow our market shares. And you can see the results where you can see not just the revenue, but also improvement in margins in some of these businesses.

Tushar Bora, Analyst — MK Ventures

So, just to extend on that, we expect that the right-offs, et cetera, we're more or less done with all of that.

Manish Poddar, CFO

So, Tushar, hi, Banish here. I think we have been absolutely prudent about it. I think, like Parag mentioned, last year we burned the portfolio from farm equipment, and March 26th, we did a bit of a write-up over there in the core business, and now the electric mobility platform has done the similar exercise as well. And, you know, we just wanted to concentrate on specific portfolios, on specific brands, and therefore you see a few more write-offs coming from or the amortizations, accelerated depreciation actually coming from the electric mobility. Do we sincerely believe there's nothing more at this stage for us to do? If there was any, we would have done it right now.

Tushar Bora, Analyst — MK Ventures

Thank you. Just one last question, if I may, on EV side. So, in response to one of the previous participants' questions, I think Vikas mentioned that there's some capacity expansion or, you know, constraints that need to be addressed, whereas I believe from an overall number of units' perspective, we are still maybe in the low 20s or maybe just about 30% utilization. So, what capacity constraints? Is there a constraint in the supply chain ecosystem that has not allowed us to grow maybe faster than what we are already doing? And if so, when do we address that?

Manish Poddar, CFO

Sure. So before Vikas answers that question, just one disclaimer on the previous question on your amortization write-offs and disclaimers. As an accounting exercise, as a business review, this is a standard disclaimer. This is a regular exercise that we are supposed to do on a quarter or a period-end basis. So that exercise continues to happen and will continue to happen as we progress in the future quarters. Vikas, I just wanted to – you please may now respond to this question.

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Vikas Singh, yeah, sure, Manish. Thanks. Hey, Dushar. Hi. Good to connect again. So, I think you need to see it in the context that we have a growth in two-wheeler of about 130 percent year-on-year, and we also have tendency in terms of orders over and above what we are already catering to. So, the question is not really a constraint at our end or a constraint at the external end. The constraint is basically to try and notch up a supply situation which can cater to a much higher level of growth. So, it is basically about expanding the ecosystem, expanding our partner ecosystem, etc., which can allow us to be ready for a higher rate of growth than what we are bringing in today. So, I would put it in that context to clarify. I hope that helps.

Tushar Bora, Analyst — MK Ventures

So, maybe when you say this, you want to extend your partner ecosystem capacities, what numbers do you have in mind, sir? Let's say three to four quarters down the line. Is there a specific number we are working towards so that we don't fall short again of the possible growth chart?

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

So, once again, not possible to give you a forward-looking statement on that account, but I can just tell you that any math that you do over and above 130% growth over the same time last year will be a significant number, and we would only be getting into a much, much stronger domain with that. So, I would just leave it at that for now, Tushar.

Tushar Bora, Analyst — MK Ventures

Not a forward-looking statement, but 10% is your intended range where you want to reach. I'm assuming you will resolve your capacity constraints so that you are able to get there if and when the market allows you to.

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Yeah, we are well on course for that and we would see every month getting better and bridging the gap. So, we don't see that as a challenge to our ambitions going forward. Great.

Tushar Bora, Analyst — MK Ventures

Thank you so much. I'll join back in here.

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Thank you.

Operator

Thank you. Next question is from the line of Zaki Abbas Nasser, an individual investor. Please go ahead.

Zaki Abbas Nasser, Analyst — Individual Investor

Sir, good evening, and I think congratulations to the team for a, I would call it a thumping set of numbers, mass buy, one-off. Sir, we have certain write-offs and amortization. So, would that be a one-quarter kind of a number, or we have more to do going ahead, sir?

Manish Poddar, CFO

Hi, Zaki. Good evening, and thank you for the compliments. As I just mentioned in the previous question, in response to Tushar's question, these have been the one-off write-offs, and these are regular reviews that the company and the team analyzes on a quarter-stroke period and basis. Therefore, we sincerely believe whatever was to be amortized to accelerated depreciated has been done in Q2. And therefore, you see that huge number of 27.3 crores on accelerated depreciation and 32.8 crores on exceptional items, totaling to 60.1 crores. There's nothing more at this stage for any further write-offs or accelerated depreciation.

Zaki Abbas Nasser, Analyst — Individual Investor

And two very interesting developments this quarter. One is ownership of 100% of Excel. The other is introduction of our rare earth motors. Could you throw some light on both these, sir? I mean, I think these are major things. In fact, you all have also given in your presentation that the motors will go into our own EV two-wheelers from Q3 or Q4. Some light on these two developments, sir.

Parag Sadpute, CEO

Sure, Zaki. Let me comment on the XL 100% acquisition, and then Vikas will talk about the rarest-free motors. So, yeah, I mean, Excel, we acquired it a couple, or we started acquiring it two years ago, and we are very happy to make it now a fully-owned subsidiary of Grief Scott & Limited. Like I mentioned in my opening remarks, it gives us an opportunity to really build a very strong auto-components platform. And we have also upgraded Excel in this period. A significant investment has gone in automation of manufacturing. Significant investment has gone in professionalization of the product development and business development. And as a consequence, we have started seeing the growth returning. So like I mentioned, 30% growth this quarter, even faster than what they grew last quarter. So we are very excited with this new platform that we have. And therefore, it was really good to complete the whole transaction and own it 100%. And I will now ask Vikas to talk about the other exciting development you asked about.

Vikas Singh, Analyst — MD, Greaves Electric Mobility Ltd.

Sure, Parag, thanks, and thanks for the questions, Adi. So, I think the Rearer 3 motor is a very, very big development from our side. It's like one of the previous investors mentioned. It's like the LFP battery, which was the first from our side in the sector. The key piece over here is that it's in-house. It's going to be sourced in-house, and it's going to go into both our two-wheeler and three-wheeler solutions. This will happen over the period of the next quarter or two. And I would just like to say at this point in time that besides the cost advantage, this motor also gives much higher performance deliveries as compared to the traditional rare earth motor. And we believe not only will it enhance customer experience and overall vehicle performance, but also as usual help add to our margins and bottom line. So, hope that helps.

Zaki Abbas Nasser, Analyst — Individual Investor

So, fantastic. And in fact, congratulations to the team who developed this motor. I think it's a big development. And Mr. Palak, going on Q3, do you think our gross margins will start improving and the pressure from inputs will start reducing and partly you could pass it on?

Parag Sadpute, CEO

So, I think there was a question also from the previous one. So, I can tell you that answering that question and then coming to your question, Zaki, the impact of those commodities which Manish mentioned, aluminum, copper, PGM, and steel is across our product range. Our ability to pass on this or to subsidize this is different in different businesses. In the automotive business, we have very strong contracts, multi-year contracts, where there is a raw material indexing mechanism, but it comes with a lag. So we start to see the price passing coming in from quarter four this year for the automotive business. In some of the other businesses, including energy solutions and industrial solutions, we sell to our channel partners and our dealers. Here again, we try to minimize the prices that we need to pass on by cost actions, but whatever we have not been able to absorb, we have adjusted the prices in the market. Here, too, the impact of the prices comes with a quarter or four to five months lag. So, we enacted those price changes at the end of Q1, and we hope to see the impact come through in the third quarter and the fourth quarter.

Zaki Abbas Nasser, Analyst — Individual Investor

And one last accounting question, sir. Manish ji, we've put in some money in the rights issue of the electric mobility. After that, what would be our cash on books? And would IPO even be required for the EV two-wheelers? I mean, a suggestion would be that a spin-off could be a better option. So, both companies find their own valuations because valuations, as I see, are getting suppressed because, I mean, both our businesses are valued in a different way. EV, Ather is valued at some seven, eight times or more top line. And on the other side, if you see our competitors, Silvusker, Oil, and Cummins are again valued very richly. So I think we are getting pulled in by our own thing. So it's just a suggestion that spinning off would be a better option.

Manish Poddar, CFO

Sure. Zaki, so thanks for your questions. So I see three questions coming up. Cash, rights, and IPO. So, stroke listing for GML. On the cash side, I think, Chris Cotton and Electric collectively on the core basis, we have got 150 crores of cash and 40 crores of debt, so net 110 crores of cash in hand at this stage. And, of course, you know, core business has been cash generating for quite some time now, and it continues to throw cash for further utilizations in. And just to top it up, we are AA minus, you know, from a credit rating perspective, I almost nil debt on the book. So, you know, that financial leverage, you know, is always available at our disposal. Second part of your question on the rights, I think as we maintain that these 331 pros of infusion from our side and total 530 at GML end, rights issue is good enough to consume the entire cash burn period and the enhanced working capital for the growth that GML is showing and the incremental KPIs that we might need over the years. So, we do not need cash primarily for, you know, for the immediate these 12 to 18 months period at all, and thereafter, it should be cash generating on its own. IPO, you know, spin-off and all that are, of course, these are decisions which are, as I think, there's nothing more for me to add to what I think Vikas mentioned earlier. It's basically for the IPO committee to decide on how and when and how do we execute that.

Zaki Abbas Nasser, Analyst — Individual Investor

So, Kirloskar Oil has given a commentary that a lot of demand and power generation is coming from data centers, AI. What is our thoughts on our share in this space?

Parag Sadpute, CEO

Indeed, that data center area worldwide has been booming and is going to continue to boom in the coming period. Currently, our play in that space is limited, but we have recognized that and we are building capabilities both internally and through a partnership, strategic partnership to have a bigger play in that space. More to come on that as and when we make Can he confirm stride forward?

Zaki Abbas Nasser, Analyst — Individual Investor

But we are present in the segment.

Parag Sadpute, CEO

We do high horsepower engines, but at a limited level.

Zaki Abbas Nasser, Analyst — Individual Investor

Thank you. Thank you, sir. And best wishes for the H2. Thank you, Zaki.

Operator

Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr. Parag Satwate for his closing comments. Over to you, sir.

Parag Sadpute, CEO

Thank you very much. So, thanks, everyone, for joining this earnings call and for all very interesting questions, also some good compliments. Yeah, to conclude on this call, I would like to reconfirm that this quarter has been another quarter of strong business momentum and meaningful progress we have made on the execution of Greaves.next. What gives me pleasure is that our core businesses are growing well, the strategic priorities are gaining traction, And we continue to strengthen products' capabilities across. We also recognize that in the face of input cost pressures, we will put extra emphasis on improving profitability. And this is something which the management takes very seriously. So as a consequence of this, our priorities for the second half of this year are very clear, and we will continue to work on those. Thank you very much for now, and see you at the end of next quarter.

Operator

Thank you very much. On behalf of Briefs Court Unlimited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.