Escorts hosted a conference call on Nov 4, 2022. In the conference call, the company was represented by Mr. Bharat Madan – President Finance, Shenu Agarwal – CEO Agri Division and Investor relations team.

Key takeaways of the call

In Q2 FY23, Domestic tractor volume increased by 12.9% to 21,369 units compared to industry growth of 4.8%. Export tractor volumes up by 8.7% to 2307 units, highest ever in any quarter.

In H1 FY23, tractor volume increased by 7.4% to 50,500 units on YoY basis In Q2 FY23, construction Volume decreased 14.6% YoY to 917 units compared to industry growth of 1.7%.

In H1 FY23, construction Volume increased 12.1% YoY to 1883 units. Demand for construction equipment is likely to be good driven by increasing flow of

Government investments for infrastructure development. This quarter steep inflation in both commodity and other costs resulted in lower EBIT margin.

Domestic Tractor Market Share in Q2 FY23 stood at 9.7% compared to 9% in Q2 FY22.

Domestic Tractor Market Share in H1 FY23 stood at 9.4% compared to 9.9% in H1 FY22.

Adverse product mix also impacted the business due to industry shift towards lower horsepower segment.

EBIT was negatively Impacted by operating leverage and volume drop in both tractor and construction equipment.

In Q2 FY23, company's tractors in strong Region grew by 16.7% YoY compared to industry growth of 12.5% in strong regions.

In H1 FY23, company's tractors in strong Region grew by 17.7% YoY compared to industry growth of 9.4% in strong regions.

In H1 FY23, company recorded highest Ever export Sales of tractors. Export through Kubota channel contributed 20%+ of total Export volume.

Railway business has been garnering good order booking and company expect a strong fiscal ahead. Order book for the railway division, at end of sept 2022, was more than Rs 900 crore.

Management expects overall macroeconomic factors and farmer sentiments to remain positive led by above normal monsoon and onset of an early festive season, which will favorably support Agri business.

In H1 FY23, Farmtrac contributed 41% of Agri Machinery sales and Powertrac 59%.

In H1 FY23, Less than 40 HP contributed 39% of Agri Machinery sales and Greater than 40 HP 61%.

For Q2 FY23, Capacity utilization of EAM (Escorts Agri Machinery) segment was around 90% and capacity utilization of Construction Equipment segment was around 35%.

In H1 FY23, Capacity utilization of EAM (Escorts Agri Machinery) segment was around 90% and capacity utilization of Construction Equipment segment was around 38%.

In Q2 FY23, crane contributed 74% of total ECE segment revenue, Compactor 3.6%, BHL 11% and traded+ spare 11.5%. During the quarter BHL (Backhoe Loader) industry went up 7% and PNC (Pick & Carry Crane) industry up by 1.4%.

In Q2 FY23, company's BHL market share stood at 1.2%, Compactor 5.5% and Crane 38.8%.

In H1 FY23, crane contributed 74.6% of total ECE segment revenue, Compactor 3.9%, BHL 11.4% and traded+ spare 10.1%.

In H1 FY23, company's BHL market share stood at 1.4%, Compactor 5.5% and Crane 40.6%.

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