Escorts hosted a conference call on Aug 1, 2023. In the conference call, company was represented by- Mr. Bharat Madan: Chief Financial Officer, Mr. Harish Lalchandani: CEO Agri Division and Mr. Sanjeev Bajaj: Chief Officer of Construction Equipment Business.

Key takeaways of the call

Board on February 18, 2022 approved selective reduction of share capital of the Company by cancelling and extinguishing 2,14,42,343 Equity Shares, held by the Escorts Benefit and Welfare Trust. During Q1 FY24, the Scheme has been approved by the Tribunal vide its order dated May 25, 2023. Accordingly, this has led to change in share capital from Rs 131.94 to Rs 110.5.

Management indicated that, in the agribusiness, overall sentiments were mixed last quarter as markets with good rainfall and crop prices showed good momentum, and markets with a delayed monsoon had a slightly dampened demand. With all macroeconomic factors remaining positive for Industry, company expect the retail demand to pick up well in the upcoming festive months starting September.

In Q1 FY24, tractor volume remained flat to 26,582 units.

Agri Machinery Business Division in July 2023 sold 5,570 tractors up by 3.9% as against 5,360 tractors sold in July 2022.

Domestic Tractor Market Share in Q1 FY24 stood at 9.7% compared to 9.3% in Q1 FY23.

In Q1 FY24, Tractor exports through Kubota channel represented 32% of total Export volume.

In Q1 FY24, Farmtrac contributed 44% of Agri Machinery sales and Powertrac 56%.

In Q1 FY24, Less than 40 HP contributed 39% to Agri Machinery sales and Greater than 40 HP contributed 61%.

Demand for construction machinery continues to be buoyant and with monsoon peaking in various parts of the country, company expects the momentum to accelerate further from September onwards, led by faster execution of projects.

In Q1 FY24, construction Volume increased 42.1% YoY to 1373 units.

Construction Equipment Business Division in July 2023 sold 465 machines, registering a growth of 54% as against 302 machines sold in July 2022.

Management indicated that, railway business is well aligned on the domestic and international front and expect it to continue to grow.

In Q1 FY24, railway revenue increased 71.8% YoY to Rs 277.7 crore.

Order book for the railway division, at end of June 2023, was more than Rs 950 crore.

During the quarter, conventional orders contributed 30% of total sales in railway segment and NPD (new product development) contributed 70%.

EBITDA margin improved supported by better realization and softening in commodity prices.

For Q1 FY24, Capacity utilization of EAM (Escorts Agri Machinery) segment was around 82% and capacity utilization of Construction Equipment segment was around 50%.

In Q1 FY24, crane contributed 78.8% of total ECE segment revenue, Compactor 4.8%, BHL 9.8% and traded+ spare 6.6%. During the quarter BHL (Backhoe Loader) industry went up 23%, PNC (Pick & Carry Crane) industry up by 59% YoY and Compactors Industry up by 32% YoY.

In Q1 FY24, company's BHL market share stood at 1.4%, Compactor 7.8% and Crane 38.8%.