ICICI Direct's research report on Escorts
Escorts is India’s fourth largest tractor maker (11.3% FY21 market share) and also serves the domestic construction equipment, railways space. FY21 sales mix – tractors 82%, construction equipment 11%, railways 7% Past five year CAGR: 44.9%, 59.8% in EBITDA, PAT; cash positive b/s
Outlook
We retain HOLD rating given muted outlook for core tractor business We value Escorts at revised SOTP-based TP of Rs 1,325 (15x P/E on core FY23E EPS, 30% discount on treasury shares; earlier TP Rs 1,140).
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