India's Greaves Cotton posts Q2 loss on one-off charge

India's Greaves Cotton posts Q2 loss on one-off charge

India's Greaves Cotton on November 7 reported a second-quarter loss, hurt by a one-time charge relating 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 Sept. 30, compared to a profit 288.8 million rupees last year.

Greaves had in May received a notice from the Indian government which alleged its electric vehicle unit failed to adhere to guidelines of an e-scooter incentive scheme, and directed that it return the subsidies claimed.

Separately, the government in May slashed e-scooter cash incentives without explanation, saying it would pay just up to 15% of the price before taxes, compared to 40% earlier.

Greaves, which also makes engines and powertrains, reported a subsidy-related provision of 4.77 billion rupees. Its overall one-time charge stood at 3.81 billion rupees, mainly due to a gain from selling land.

The company had reported a loss of 50.8 million rupees in the previous quarter as well, as sales of its "Ampere" branded electric scooters took a beating after the subsidy cut.

Quarterly expenses were up 4.5%, outpacing a 4% growth in revenue. While revenue at its biggest segment – engines – rose 20%, its electric mobility segment reported a 37% drop.

Shares closed flat and are down 12.3% since its unit received the government notice proposing that it be de-registered from the incentive scheme.

($1 = 83.2458 Indian rupees)