New Delhi: Buoyed by a robust 76.6% jump in its net profit for the quarter ended 31 March, tractor maker Escorts on Tuesday said it will set up a new production facility within the next two years with a total installed capacity of 50,000 units per annum.
The company reported its net profit for the quarter ended 31 March, 2011, at Rs 73.22 crore as compared to Rs 41.47 crore in the corresponding period last year.
The total net operating income during the second quarter increased by 33.49% to Rs 901.81 crore from Rs 675.56 crore in the year-ago period.
During the January-March period, the company’s tractor sales rose by 20.85 % to 17,672 units from 14,623 units in the same period last fiscal.
“Our agri solution business performed very well during the quarter, besides robust contribution from the construction division. Sales grew very strongly and we have almost reached the peak of our production capacity,” Escorts joint managing director Nikhil Nanda told PTI.
The company currently has four tractor plants that can produce about 95,000 units annually.
When asked about expanding its capacity, Nanda said: “We have decided to set up a new plant and this will be in a new location. The installed capacity of the plant will be 50,000 units and it will be operationalised within next two years”.
He, however, declined to share details such as the location and the planned investment for the proposed unit.
“Besides, we are also investing Rs 165 crore in our agri machinery business, mainly to expand the capacity of higher powered engines and introduce higher HP tractors,” Nanda said.
The company is setting up a machine shop with an annual installed capacity of about 50,000 units to supply parts to the upcoming facility, he added.
He said the company is investing another Rs 50 crore for its construction division to expand the capacity of material handling and earth moving equipments and introduce new products from its Ballabhgarh unit in Haryana.
“With strong demand for infrastructure machinery, we are today focused and have aggressive plans for the construction equipment business. Technology tie-ups are in the pipeline to offer higher value added products to our customers, with an aim to become a one-stop shop,” he said.
Shares of the company were trading 7.90% down at Rs 128.25 in the late afternoon trade on the Bombay Stock Exchange.