Escorts rises after strong sales in June

Escorts gained 0.87% to Rs 1,231.45 after the company’s tractor sales rose 15.5% to 12,533 units in June 2021 from 10,851 units in June 2020.

Sequentially, Escorts’ total tractor sales zoomed 95.1% in June 2021 compared with 6,423 tractors sold May 2021. The company said it has registered highest ever June sales.

Domestic tractor sales in June 2021 increased by 12.5% to 11,956 tractors as against 10,623 tractors in June 2020. Tractor exports in June 2021 stood at 577 tractors against 228 tractors sold in June 2020, registering a growth of 153.1%.

The company said on-ground situation eased in June as the second wave of pandemic started diluting. Most of the dealerships, except in few pockets, were able to remain open and serve customers, though for limited hours of operation.

Inventory levels, both with the company and with the channel, continued to be at normal levels. Escorts remains optimistic for the rest of the fiscal year, as timely and expected above-normal monsoon, increase in MSP prices, and record direct procurement by Government is leading to a positive build-up of farmer sentiments. The commercial activity also is expected to gain further momentum in the ensuing months. The enhanced pace of mass vaccinations is further going to help the rural sector.

Inflation however continued unabated beyond industry expectations. Escorts assured that it is trying to offset a part of high inflation through internal cost control measures. The company also announced a significant price hike effective 1 July 2021 on all tractors. This is company’s third consecutive price hike in the last nine months. Despite this, inflation continues to put pressure on company’s margins.

Escorts is one of India’s leading engineering conglomerates. The company has diversified business in to three different segments: Escorts Agri Machinery (EAM), Escorts Construction Equipment (ECE) & Railway Equipment Division (RED).

On a standalone basis, the company’s net profit increased 93.2% to Rs 271.3 crore in Q4 FY21 from Rs 140.4 crore in Q4 FY20. Revenue from operations jumped 60.1% year-on-year (YoY) to Rs 2,210.5 crore during the quarter.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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