Greaves Cotton, is diversifying beyond IC engines, be it aftermarket, multi-brand EV retail chain, financing, or its own electric vehicles. In an exclusive conversation with Financial Express, Akhila Balachandar, CFO, Greaves Cotton, reveals the company’s game plan going forward.
The global automotive landscape is seeing huge disruption. What are your initial thoughts in this new role?
This is my first role in an automotive company, and it is very exciting time. This is the kind of a decadal change happening and maybe after so many years we now have a completely new range. The automotive industry is moving from mechanical to electronics to mechatronics. How this is going to play out over a period of years and the end ultimately is all about using data.
This is coupled with climate change, moving away from fossil fuel. You see examples of it in Europe, in the US and China obviously has a completely different roadmap. I think for India in addition to shift in automotive, the real opportunity for the China plus one strategy. And that opportunity I think has opened up so many things for the economy, for manufacturing, for India to play a very different role. It’s an inflection point of sorts.
As a CFO, I think the priorities are always very clear – How do you strategise the financial health of the company, ensure CAPEX is available for the right projects at the right time, manage cost, and then also ensure profitable growth?
I think the mantra in today’s digitisation world is how you improve efficiency.
What is your initial thoughts on EV subsidies? How is Greaves Cotton preparing for the future?
I would say the FAME Policy is somewhere there, whether you take GST, changes in Companies Act 2013, I think we it went through that whole process and these new rules and laws will take some more time to stabilise. As far as EV subsidy goes, the general philosophy is that we should be able to run our business sustainably without subsidies. Getting subsidy should be an icing on the cake.
Therefore we will be prepared by the time the subsidy regime comes to an end.
What are your top five priorities for the short- and long-term?
One is the industry and how it’s evolving. The strategic position India is currently in in the global geopolitical scene where it’s a China plus one manufacturing. Third thing really speaking is the ecosystem of startups and entrepreneurs that have. This is something which is very exciting, I think from a strategic direction.
Fortunately, we are sitting on a cash position. We don’t have debt on our books, so we have the strength to take some opportunities and play to our strengths. I think this is one of the top priorities to ensure that we have a meaningful run over next three to five years.
What will be focus of Greaves Cotton for future investments?
We have now five different businesses. One is obviously engines and they’re trying to become as fuel-agnostic as possible.
Second is retail, which is the aftermarket spares and services. Third, is the electric two- and three-wheeler business. Fourth, we have the EV financing business and fifth we have a technology business, but these are enablers to the three core businesses. This is the strategy for diversification that we have embarked on over the last two two-and-a-half years.
This is how we would like to move away from a single-product company to a very well-diversified company.
What about working with start-ups or inorganic growth?
We will identify startups or work for acquisitions, it will be within these five categories and not any new set of categories. The startups that we may look for would be in a position where they are ready to grow into the next phase so maybe have seed B seed C kind of stuff.
