Es­corts ltd is a strong buy

The Sunday Guardian - - & Comment Analysis - RA­JIV KAPOOR

ment from the grass­roots. Across the three core busi­nesses in which it op­er­ates, the com­pany brings the best that the world has to of­fer to In­dia and take In­dia’s best ca­pa­bil­i­ties to the world. Es­corts Lim­ited re­ported a profit of Rs 102.7 crore for the quar­ter end­ing 30 Septem­ber 2018, up by 32.4% as against a profit of Rs 77.6 crore in the cor­re­spond­ing pe­riod last fis­cal. Rev­enue from op­er­a­tions was up by 15.4% to Rs 1,398.4 crore for the quar­ter ended Septem­ber 2018 as against Rs 1,211.7 crore in the cor­re­spond­ing pe­riod of the last fi­nan­cial year. All the three seg­ments of the com­pany have done well, with the Es­corts Agri Machin­ery seg­ment re­port­ing trac­tor vol­umes up by 3.3% at 21,039 units and EBIT mar­gins higher by 14.7% for the Septem­ber 2018 quar­ter. In the con­struc­tion equip­ment seg­ment, sales went up by 36.0% at 1,331 units as against 972 units for the se­cond quar­ter of the cur­rent fi­nan­cial year. The rail­way prod­uct divi­sion re­ported rev­enue sales go­ing up by 44.5% at Rs 106 crore, as against Rs 73.3 crore in the cor­re­spond­ing quar­ter of the last fis­cal. Es­corts Agri Machin­ery has been a pi­o­neer in farm mech­a­ni­sa­tion for the last seven decades and com­mit­ted to en­hanc­ing In­dia’s agri­cul­tural pro­duc­tiv­ity by adding value to the farmer’s life. The com­pany pro­vides tech­no­log­i­cally su­pe­rior range of 12 HP to 75 HP trac­tors, Farm­trac and Pow­er­trac. Es­corts has a net­work of over 800 cus­tomer points and four man­u­fac­tur­ing plants in Farid­abad, Haryana. The com­pany’s shared ser­vice plat­forms like crop so­lu­tions and tech­nol­ogy ag­gre­ga­tion have been for­ay­ing well in the cus­tomer de­mand and help mech­a­nis­ing farm­ing na­tion­ally and el­e­vate ad­vanced agri­cul­tural prac­tices. Es­corts has an order book of around Rs 275 crore in the rail­way busi­ness as of date, which al­most ad­dresses the next one year’s rev­enue tar­get for this busi­ness. It is look­ing at about 20%plus growth in the rail­way busi­ness for the cur­rent year and also ex­pect­ing a sim­i­lar growth go­ing for­ward for the next cou­ple of years. The agri machin­ery seg­ment has reg­is­tered a strong growth of 56% with sales of over 8,000 trac­tors till Novem­ber 2018. All the three di­vi­sions are do­ing very well and an­a­lysts and fund man­agers are bullish on the com­pany to per­form strong growth over the next few years. The Es­corts Ltd stock has been quot­ing at Rs 625 on the In­dian bourses and is a strong fun­da­men­tal buy for a price ap­pre­ci­a­tion of 23% in the next one year. Ra­jiv Kapoor is a share bro­ker, cer­ti­fied mu­tual fund ex­pert and MDRT in­sur­ance agent.

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