Escorts hosted a conference call on May 13, 2022. In the conference call the company was represented by by Shenu Agarwal – CEO Agri Division, Ajay Mandhar -CEO Construction Division, and Bharat madan – Group CFO.

Key takeaways of the call

In Q4 FY22, Tractor volume fell 32.8% to 21,895 units and construction Volume fell 19.8% to 1,286 units on YoY basis.

For FY22, Tractor volume fell 11.7% to 94,228 units and construction Volume rose 5.2% to 4,117 units on YoY basis.

Company's domestic tractor Market Share fell by 99 bps in FY22 to 10.3% compared to 11.3% in FY21.

In Q4 FY22, Industry Domestic Tractor Volume fell 25.7% compared to 34.5% fall in escorts domestic tractors. Industry Export Tractor Volume grew 13.1% compared to fall of 2% in escorts exports of tractors. This is primary attributed to delay in cropping cycle in most of the states, high inventory levels and high base of last year.

Agri sector is witnessing some positive tailwinds due to prediction of normal monsoon, healthy reservoir levels and higher crop prices. In April 2022, industry growth was 41 % which is a big booster of confidence.

Construction and Railway sectors have also shown signs of improvement driven by Government spending focus in these sectors. Order book for the railway division, at end of March 2022, was more than Rs 440 crore.

Company has taken about five price hikes due to high inflation in six quarters. Company plans to take one more price hike in Q2 FY23.

Inflation continues to be a big cause of worry. Company hopes inflation to cool down from Q3 FY23 onwards.

In Q4 FY22, EAM segment (Escorts Agri Machinery) contributed 73.2% of total revenue, ECE (Escorts Construction Equipment) segment contributed 17.1%, RED (Railway Equipment Division) segment contributed 9.3% and unallocated 0.3%.

In Q4 FY22, crane contributed 67.9% of total ECE segment revenue, Compactor 7.4%, BHL 13.3% and traded+ spare 11.4%. During the quarter Crane industry went down by 19%, BHL industry down by 40% and Compactors industry down by 23%.

In FY22, crane contributed 65.7% of total ECE segment revenue, Compactor 7.4%, BHL 15.9% and traded+ spare 11%. In FY22 Crane industry went up by 2%, BHL industry down by 28% and Compactors industry down by 12%.

During the quarter conventional orders contributed 67% of total sales in RED segment and NPD (new product development) contributed 33%.

In FY22, conventional orders contributed 64% of total sales in RED segment and NPD (new product development) contributed 36%.

For Q4 FY22, Capacity utilization of EAM segment was around 60%. For FY22, Capacity utilization of EAM segment was more than 75%.

For Q4 FY22, Capacity utilization of ECE segment was around 50%. For FY22, Capacity utilization of ECE segment around 42%.

The company has issued and alloted 93,63,726 equity shares of Rs 10 each to Kubota, by way of prefrential issuance, on Feb 2022. This has led to change in share capital from Rs 122.58 crore to Rs 131.94 crore.

Post the completion of the preferential allotment and open offer, certain Existing Promoters has become effective on April 11. 2022 and accordingly, Kubota Corporation has become a Joint Promoter of the Company effective April 11 , 2022 along with the existing promoters of the Company.