Greaves Cotton, a prominent player in India’s automotive industry, faced setbacks in the second quarter, reporting a loss of 1.91 billion rupees ($22.9 million) for the period ending Sept. 30. The company’s financial woes were exacerbated by a one-time charge linked to a government incentive for electric scooter sales, as well as increased expenses.
The loss was a stark contrast to the profit of 288.8 million rupees posted in the same period last year. Greaves Cotton’s troubles stemmed from a notice received from the Indian government, accusing its electric vehicle unit of non-compliance with the guidelines of an e-scooter incentive scheme. This led to a directive to return the subsidies claimed. Additionally, the government slashed e-scooter cash incentives without explanation, reducing payments from 40% to a mere 15% of the price before taxes.
Greaves Cotton took a substantial hit, setting aside a subsidy-related provision of 4.77 billion rupees. The company’s overall one-time charge reached 3.81 billion rupees, primarily due to a gain from the sale of land.
By 2:00 pm, Greaves Cotton’s shares were trading 5.05% lower at ₹126.80, reflecting the challenges faced by the company amidst changing government policies and financial provisions.
