Recovery of market share a challenge for tractor major Escorts Kubota

Near term volume growth, margins could add to the concerns

The stock of tractor major, Escorts Kubota, slid over 5 per cent in trade on Tuesday, following a weak June quarter for the 2022-23 financial year (Q1FY23) show and a slew of brokerage downgrades. While the company faced margin headwinds in the quarter, the Street is worried about market share losses and prospects of a weak volume trajectory going ahead. Brokerages have cut their earnings estimates for the company between 7-24 per cent for FY23 and FY24.

Even though Escorts revenues grew 20 per cent in Q1, as compared to QIFY22, its operating and net profit fell by 14 per