BackEscorts Q1 results: Net profit doubles to ₹185 cr; tractor, construction equipment sales up
Unlocking has helped in building demand, easing transport and logistics and improved supply chain across farming community to create a positive industry momentum, said CEO Nikhil Nanda
PremiumTractor manufacturer Escorts registered a two-fold increase in net profit during the quarter ended June 30, 2021. The company posted a 101 per cent rise in standalone net profit at ₹185.2 crore, as opposed to ₹92.2 crore in the year-ago period.
Revenue from operations improved as sales rose during the quarter. The company reported 57.4 per cent increase year-on-year in revenue from operations at ₹1,671.5 crore in Q1 FY22, compared to ₹1,061.6 crore in the Q1 FY21.
EBIDTA for the quarter ended June 30, 2021 at ₹233.2 crore was up by 95 per cent, as against ₹119.6 crore in corresponding quarter ending June 2020. EBITDA margin increased 269 basis points to 14 per cent during the quarter under review.
During the quarter, Escorts' tractor sales grow 42.9 per cent to 25,935 units, against 18,150 tractors in the corresponding period last fiscal. Segment revenue was up by 48 per cent to ₹1,411.4 crore, as against ₹953.5 crore in the corresponding period last fiscal.
"This quarter despite commodity price inflation, with various cost reduction initiatives and operating leverage, EBIT margins improved by 112 bps to 15.6 per cent in quarter ended June 2021 as against 14.5 per cent in corresponding period last fiscal," Escorts said in a regulatory filing.
The company sold 606 units of construction equipment during June quarter this year, up 159 per cent as against 234 machines in the same period last year. Segment revenue was up 168.3 per cent to ₹140.8 crore in quarter ending June 2021 as against ₹52.5 crore in the corresponding period last fiscal. EBIT margin for first quarter ended June 2021 were negative 2.3 per cent as against negative 32.0 per cent in the corresponding period last fiscal.
"Going forward with improved funding availability and government thrust on infrastructure projects, demand is expected to recover to its full potential from October 2021 onwards post the monsoon season," the company stated.
In railway equipment division, segment revenue for the first quarter went up by 117.5 per cent at ₹119.4 crore in quarter ending June 2021 as against ₹54.9 crore in the corresponding quarter. Sales from new products more than doubled and now contribute 63 per cent to total division sales as against 43 per cent last year corresponding quarter.
"Indian Railways is still not running its full operations, due to unprecedented Covid-19 pandemic and have cut down their annual production rate, affecting fresh order tendering and order inflow. Order book for the division, at end of June 2021, was more than ₹300 crore and going forward with government safety measures and vaccination drive picking up at fast pace, we expect that tendering process will get back to pre-Covid level with in current fiscal," the company said.
"Unlocking has helped in building demand, easing transport and logistics and improved supply chain across farming community to create a positive industry momentum and we certainly hope that with sustained government efforts, tractor and agri equipment industry and construction equipment industry will be back on a growth path," said Nikhil Nanda, Chairman and Managing Director, Escorts.
Escorts shares closed at RA 1,220.75 on Thursday, down 13.25 points or 1.07 per cent on BSE.
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