Kantilal Chhaganlal Securities has maintained 'Hold' on Greaves Cotton (GC) with target price of Rs 126 as against current market price of Rs 131.5 in its report.

Commenting on the investment rationale, the stock broker said, "In Q4FY15, Greaves Cotton's  revenue has declined by 9.5% to Rs 3938 million on Y-o-Y basis and 8.6% on sequential basis, mainly on account of discontinuation of Infrastructure equipment segment and slower growth in engine segment. Infra equipment revenue stood Rs 19.9 million Vs. Rs 379.8 million in Q4FY14. For FY15, revenue has declined by 2.2%.

In Q4Y15, the company has registered a net profit of Rs 335.7 million (excluding exceptional item of Rs 98.3 million pertaining to discontinued operations) during the quarter which grew by 84% on Y-o-Y basis (without exceptional items). The net profit margin during the quarter. However there will not be any further provisions related to infrastructure business in coming quarters.

Greaves Cotton can gain more from tie-ups with more OEMs, its cost saving and working capital improvement efforts in coming quarters and expected revival in industry and economy, We maintain our "Hold" rating, and revise our estimates and target price to Rs 126 a share which is at 18x P/E (x) on FY17E EPS of Rs 7.0.

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