STRONG TRACTOR SALES BOOST ESCORTS’ MARCH QUARTER PROFIT

NEW DELHI: Escorts Ltd posted a more than twofold jump in net profit in the March quarter while revenue grew at a robust pace following strong sales of tractors and construction equipment, and a low base.

Profit at the company surged 123% in the three months ended March 31 to ₹285.40 crore from ₹128 crore a year earlier.

Total revenue from operations during the quarter climbed 60.8% to ₹2,229 crore. This was buoyed by a 62% jump in tractor sales to 32,588 units. Sales of construction equipment grew 62.7% to 1,604 units. Operating profit jumped by 88.9% to ₹344 crore, while operating margin expanded by 230 basis points to 15.4% as a result of cost cuts. But a sharp rise in the price of copper and steel pushed up input costs by 51.5%.

To be sure, the growth in revenue and profit is the outcome of a low base in the corresponding period last year when sales of tractors suffered due to a slowdown in the economy and a nationwide lockdown towards the end of the quarter.

Looking forward, the spread of Covid infections in rural areas may hit the tractor business in the first half of this fiscal. But a good monsoon may limit the impact. “Agri machinery industry remained buoyant in Q4 of FY21 owing to positive macroeconomic factors and pent-up demand from first and second quarters of the year. Escorts did well in this space by registering higher share of market in Q4 than our average market share of the year,” said Nikhil Nanda, chairman and MD, Escorts.