Escorts Kubota Q4 Results: Firm posts drop in profit on higher expenses

Indian tractor maker Escorts Kubota Ltd reported a fall in its fourth-quarter profit on Wednesday, hurt by increased commodity prices, and unseasonal rains in March.

The company's net profit decreased 8.3% to 1.85 billion rupees ($22.6 million) in the quarter ended March 31, it said in an exchange filing.

Analysts had on average expected a profit of 1.87 billion rupees, according to Refinitiv IBES.

The company had previously posted six consecutive quarters of declines in profit, with a fall of 28.1% in the year-ago period.

Revenue from operations rose nearly 17% to 21.83 billion rupees. Total expenses, however, rose 20.2% due to a 37% increase in cost of materials consumed.

The company also incurred an additional expense of 244 million rupees due to impairment in investment in its subsidiary Escorts Crop Solutions in the quarter.

"With better crop prices, improved finance availability and good water reservoir levels, we expect demand momentum to continue across geographies in the coming quarters." Chairman and Managing Director Nikhil Nanda said.

Retail sales of tractors were impacted in March due to unseasonal rainfall and crop damage in some regions despite festive season demand, the company said last month.

Shares of the company fell 1.8% after results were announced. The company recommended a final dividend of 7 rupees per share.