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Escorts Q2 Review - Muted Growth Outlook For Tractor Industry: Axis Securities

Escorts Q2 Review - Muted Growth Outlook For Tractor Industry: Axis Securities

<div class="paragraphs"><p>Farmtrac tractor manufactured by Escorts Ltd. (Source: Company website).</p></div>
Farmtrac tractor manufactured by Escorts Ltd. (Source: Company website).

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Axis Securities Report

Escorts Ltd. reported a good set of numbers in Q2 FY22 (above our estimates), driven by a better tractor mix and a recovery in the railway business in Q2 FY22.

Total revenue stood at Rs 1,661 crore (our estimate: Rs 1,514 crore) against Rs 1,640 crore in Q2 FY21, a marginal growth of 1.4% YoY.

The growth was on account of a 32% YoY revenue growth in the construction equipment and the railway equipment division which was offset by a 14% YoY decline in tractor volumes.

Escorts' Ebitda came in at Rs 210 crore as compared to Rs 301 crore in Q2 FY21, a fall of ~30% YoY.

Ebitda margin stood at 12.6%, a contraction of 571 basis points YoY, on account of the adverse impact of higher commodity prices, negative operating leverage, and volume drop in tractor segments.

Click on the attachment to read the full report:

Axis Securities Escorts Q2FY22 Result Update.pdf

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