Escorts gains as shareholders approve allotment of 94 lakh shares to Kubota

NEW DELHI – gained close to a per cent in early trade on Tuesday after the shareholders approved the preferential allotment of nearly 94 lakh shares to Japan's Kubota Corporation, which is seeking majority control of the Indian partner to become a joint promoter.

The scrip touched a high of Rs 1827.80 against the previous close of Rs 1813.60 on the National Stock Exchange.

In November, Escorts and Kubota Corporation, a global leader in tractors and machinery, announced that they would seek to strengthen their partnership.

Accordingly, Kubota Corporation planned to increase its equity stake in Escorts by subscribing to new equity shares proposed to be issued by the latter to become a joint promoter.

After completing the transaction, Kubota Agricultural Machinery India and Escorts Kubota India will be merged with Escorts.

In July-September, Escorts reported a 23.1 per cent fall in standalone net profit to Rs 176.7 crore on a 1.4 per cent rise in revenue from operations to Rs 1,662.3 crore in Q2 FY22 over Q2 FY21.

Ebitda for the quarter ended 30 September was reported at Rs 210.1 crore against Rs 300.9 crore in the corresponding quarter last fiscal, down 30.2 per cent YoY. Ebitda margin was 12.6% in Q2 FY22 as against 18.3 per cent in Q2FY21.

Tractor sales volume declined 13.8 per cent to 21,073 units in quarter-ended September against 24,441 units in the corresponding period last fiscal. Segmental revenue fell 6.1 per cent to Rs 1,240.9 crore in the quarter ended September against Rs 1,322.2 crore in the corresponding period last fiscal.