Escorts hosted a conference call on May 10, 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

In Q4 FY23, tractor volume increased by 13.1% YoY to 24,765 units. In FY23, tractor volume increased by 9.6% to 1,03,290 units on YoY basis.

Domestic Tractor Market Share in Q4 FY23 stood at 10.9% compared to 11.4% in Q4 FY22. Domestic Tractor Market Share in FY23 stood at 10.1% compared to 10.3% in FY22.

During the quarter, EBITDA margin was adversely impacted due to Commodity price inflation and higher other costs. However, management expects margin to improve driven by softening of commodity prices such as casting sheet metals and rubber.

In agribusiness, retail sales were impacted due to unseasonal rainfall and crop damage in certain regions. However, with better crop prices, improved finance availability and good water reservoir levels, company expect demand momentum to continue across geographies in the coming quarters.

In Q4 FY23, Tractor exports through Kubota channel represented 40% of total Export volume. Similarly in FY23, tractor export through Kubota channel represented 30%+ of total Export volume.

In Q4 FY23, Farmtrac contributed 44% of Agri Machinery sales and Powertrac 56%. Less than 40 HP contributed 34% of Agri Machinery sales and Greater than 40 HP 66%.

In FY23, Farmtrac contributed 42% of Agri Machinery sales and Powertrac 58%. Less than 40 HP contributed 37% of Agri Machinery sales and Greater than 40 HP 63%.

In Q4 FY23, construction Volume increased 18.8% YoY to 1528 units. In FY23, construction Volume increased 12.2% YoY to 4620 units.

Company witnessed growth across the construction equipment portfolio towards the second half of FY23 across material handling, earth moving as well as road segment. Management expects demand to remain buoyant due to the continuous focus of the government towards infrastructure projects.

In Q4 FY23, crane contributed 79.7% of total ECE segment revenue, Compactor 5.4%, BHL 12% and traded+ spare 3%. During the quarter BHL (Backhoe Loader) industry went up 30.8% and PNC (Pick & Carry Crane) industry up by 27.4% YoY.

In Q4 FY23, company's BHL market share stood at 1.4%, Compactor 7.2% and Crane 40.2%.

In FY23, crane contributed 77% of total ECE segment revenue, Compactor 5%, BHL 11.6% and traded+ spare 6.4%.

In FY23, company's BHL market share stood at 1.4%, Compactor 6.6% and Crane 39.7%.

In Q4 FY23, railway revenue increased 37.3% YoY to Rs 237.2 crore. In FY23, railway revenue increased 32.3% YoY to Rs 841.9 crore.

Railway business has been consistently growing and the focus on rail network and connectivity will further provide impetus to the segment.

Order book for the railway division, at end of March 2023, was more than Rs 1050 crore.

During the quarter, conventional orders contributed 31% of total sales in railway segment and NPD (new product development) contributed 69%.

In FY23, conventional orders contributed 35% of total sales in railway segment and NPD (new product development) contributed 65%.

For Q4 FY23, Capacity utilization of EAM (Escorts Agri Machinery) segment was around 80% and capacity utilization of Construction Equipment segment was around 60%.

In FY23, Capacity utilization of EAM (Escorts Agri Machinery) segment was around 90% and capacity utilization of Construction Equipment segment was around 45%.