The leading agro machinery manufacturer Escorts Ltd has recently reported a rise of 24.02% in top-line sales for the Sep-20 quarter at Rs1654.18cr. Moreover, the rise in sales was driven by a spurt in sales across the business with the tractor showing solid traction on the back of a good Kharif season and steady rural incomes.
According to reports, the operating profits for the quarter ended Sep-20 was 175.2% higher on a YoY basis at Rs270.06cr. The net profits for the Sep-20 quarter were higher by 123.8% at Rs272.22cr on the back of sharply higher revenues absorbing fixed costs better. In fact, net profit growth could have been still better if it had not been for the sharply higher tax incidence.
This had an overall impact on the margins of Escorts Ltd, the leading automotive engineering company of India and multinational conglomerate. Moreover, the street was impressed with Escort Ltd's Q2FY21 performance, given the significant beat delivered by the tractor major on all parameters.
The operating profit margins or OPM more than doubled at 16.33%. Similarly, the net profit margins or NPM almost doubled on a yoy basis at 13.74% for the Sep-20 quarter.
Key takeaways from the Sep-20 quarterly results
While the tractor volumes for the quarter were up 23.8% at 24,441 units, there was also all-round growth seen in the company. The railway business also saw a spike of 26.4% to Rs160cr while the construction equipment business was the only one that showed lower volumes due to tepid construction activity. Escorts currently has a 9.8% share of the domestic tractors market.
On the other hand, the leading automotive engineering company will also be starting contract manufacturing on behalf of Kubota Corporation of Japan and that is expected to commence soon.
About Escorts:
Escorts Limited is an Indian multinational conglomerate and automotive engineering company that operates in the sectors of agri-machinery, construction machinery, material handling, and railway equipment. Its headquarters are located in Faridabad, Haryana.
