Escorts Kubota Q1 profit at Rs 147.5 cr

Although the company took price increases across its product portfolio along with cost reduction efforts, steep inflation in commodity prices coupled with adverse product mix impact due to industry shift towards lower horsepower segment adversely impacted operating profit for the quarter ended June 2022. During the quarter profit before tax was also impacted due to lower other income due to temporary mark-to-market losses on treasury Investments.

Standalone financials revenue from operations was at Rs 2,032.1 crore in the quarter ended June 2022, up by 19.0 per cent as against Rs 1,707.3 crore in the corresponding quarter of the previous fiscal. Consolidated net profit was recorded at Rs 140.6 crore in the quarter ended June 30, 2022 as against a profit of Rs 178.5. crore in the corresponding quarter of the previous fiscal. EPS for the quarter ended June 2022 was reported at Rs 13.01 as against Rs 18.13 in the corresponding quarter and Rs 18.56 in the sequential quarter.

Speaking on the results, Nikhil Nanda, Chairman and Managing Director, said, “We are excited to be Escorts Kubota (EKL) now. During the first quarter of the current financial industry in the Agri sector witnessed a positive trend, after three-quarters of degrowth. With the onset of monsoon, and likely record kharif crop production, rural liquidity and farmer sentiments are expected to gradually improve. In our construction business, we have outperformed the industry in our served markets and expect growth momentum to continue with Government’s thrust on infrastructure development. We are witnessing good order booking in our Railway Business and expect a strong fiscal going ahead. With recent Government actions, Inflation may stabilise in the near term and operating leverage may further possibly help in partially diluting the impact on margins in coming quarters.”

Segment-wise performance
Agri Machinery Products: Tractor sales volume at 26,797 tractors for the quarter ended June 2022 went up by 3.3 per cent as against 25,935 tractors in the corresponding quarter of the previous fiscal. Segmental revenues were up by 12.6 per cent to Rs 1,595.8 crore in the quarter ending June 2022 as against Rs 1,416.7 crore in the corresponding quarter of the previous fiscal. EBIT margin for the first quarter ended June 2022 came at 10.6 per cent as against 15.5 per cent in the corresponding period last fiscal.

Construction equipment: Construction equipment sales volume at 966 machines for the quarter ended June 2022 up by 59 per cent as against 606 machines in the corresponding quarter of the previous fiscal. Segmental revenues were up by 74.5 per cent to Rs 246.1 crore in the quarter ending June 2022 as against Rs 141.1 crore in the corresponding quarter of the previous fiscal. EBIT margin for the first quarter ended June 2022 at 1.0 per cent as against a negative 2.3 per cent in the corresponding quarter of the previous fiscal.

Railway equipment: Segment revenue for the first quarter went up by 45.2 per cent to Rs 173.4 crore in the quarter ending June 2022 as against Rs 119.4 crore in the corresponding quarter of the previous fiscal. EBIT margin for the quarter ended June 2022 stood at 13.6 per cent as against 14.6 per cent in the previous year.

The order book for the division, at end of June 2022, was more than Rs 850 crore.