Dolat Capital: Escorts Standing Tall In Tough Times
Farmers transport harvested wheat by tractor on a deserted street during a partial lockdown in Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Dolat Capital: Escorts Standing Tall In Tough Times

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Escorts Ltd. delivered a decent operating performance in Q1 FY21 amid a tough environment. Its Ebitda de-grew 16% YoY to Rs 1.19 billion (versus estimate Rs 1.13 billion).

Ebitda margin improved 125 basis points YoY to 11.3% led by better product mix (higher HP tractor) and cost control initiatives.

Revenue declined 25.4% to Rs 10.61 billion led by 12.7% decline in agrimachinery products, 75% in construction equipment and 53% in railway equipment.

Management stated that the overall rural sentiment is positive because of the record output of Rabi crop and a good early monsoon. Tractor sales grew 22% YoY in June, led by a sharp 60% growth in the southern region.

Despite weak Q1, the management expects lower single digit growth for the tractor industry for FY21.

The company is operating at 50-60% utilization and is expected to scale up to full capacity by mid-August with smoothening of supply chain and labor issues.

Click on the attachment to read the full report:

Dolat Capital Escorts Q1FY21 Result Review.pdf


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