Escorts Kubota slipped 5.27% to Rs 1,631.60 after the company's standalone net profit tumbled 20.4% to Rs 147.5 crore on a 20.1% jump in revenue from operations to Rs 2,014.85 crore in Q1 FY23 over Q1 FY22.
The agricultural machinery company said that it increased prices across its product portfolio along with cost reduction efforts, but 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.
The company's profit before tax (PBT) stood at Rs 198.08 crore in Q1 FY23, down 19.5% from Rs 246.14 crore recorded in the corresponding quarter previous year. During the quarter PBT was also impacted due to lower other income due to temporary mark-to-market losses on treasury investments, the company stated.
EBIDTA declined by 15.6% to Rs 201.6 crore in Q1 FY23 from Rs 238.8 crore in Q1 FY22. EBIDTA margin was 10% in Q1 FY23 as against 14.2% posted in same period last year.
In Escorts Agri Machinery segment, tractor sales volume stood at 26,797 tractors for the quarter ended June 2022 went up by 3.3% as against 25,935 tractors in corresponding quarter of the previous fiscal. Segmental revenues was up by 12.6% to Rs 1,595.8 crore in quarter ending June 2022 as against Rs 1,416.7 crore reported in the same period a year ago. EBIT margin for first quarter ended June 2022 came at 10.6% as against 15.5% in the corresponding period last fiscal.
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Construction equipment sales soared 59% to 966 machines for the quarter ended June 2022 from 606 machines sold in the quarter ended June 2021. Escorts Construction Equipment segment revenue was up by 74.5% to Rs 246.1 crore in quarter ending June 2022 as against Rs 141.1 crore in corresponding quarter previous year. EBIT margin for first quarter stood at 1% as against negative 2.3% recorded in the quarter ended June 2021.
The company's Railway Equipment division recorded a revenue for the first quarter of Rs 173.4 crore in quarter ending June 2022, rising 45.2% from Rs 119.4 crore posted in the same period last year. EBIT margin for Q1 FY23 stood at 13.6 % as compared to 14.6 % reported in the previous year. Order book for the division, at end of June 2022, was more than Rs 850 crore.
On consolidated basis, Tractor manufacturer's consolidated net profit dropped 21.1% to Rs 140.64 crore on 19% jump in revenue from operations to Rs 2,032.06 crore in Q1 FY23 over Q1 FY22.
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 current fiscal industry in Agri sector has witnessed positive trend, after 3 quarter of degrowth. With 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 near term and operating leverage may further possibly help in partially diluting the impact on margins in coming quarters."
On 1 August 2022, Escorts Kubota said that its Agri Machinery Segment had sold 5,360 tractors in July 2022, which is lower by 18.3% as compared to 6,564 tractors sold in July 2021. While domestic tractor sales declined by 22.3% to 4,704 in July 2022, tractor exports increased by 28.9% to 656 units in July 2022 over July 2021.
The Escorts Group is an Indian engineering company that operates in the sectors of agri-machinery, construction and material handling equipment, and railway equipment.
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