Escorts hosted a conference call on Nov 3, 2023. In the conference call, company was represented by- Mr. Bharat Madan: Chief Financial Officer, Mr. Neeraj Mehra: Head of Farmtrac & Powertrac Sales and Mr. Sanjeev Bajaj: Chief Officer of Construction Equipment Business.
Key takeaways of the call
In Q2 FY24, tractor volume stood at 22,024 units, down by 7.1% YoY. In H1 FY24, tractor volume stood at 48,606 units, down by 3.8% YoY.
In Q2 FY24, company’s domestic tractor volume fell by 4.3% YoY compared to industry de-growth of 5.8% YoY.
Company’s export tractor volume registered fall of 26.7% compared to industry de growth of 32.8%.
In H1 FY24, Farmtrac contributed 44% of Agri Machinery sales and Powertrac 56%.
In H1 FY24, Less than 40 HP contributed 39% to Agri Machinery sales and Greater than 40 HP contributed 61%.
Company had more than 1,230 Exclusive Dealers for EKL Brand of tractor in India at end of September 2023.
In Q2 FY24, construction Volume increased 72% YoY to 1577 units. In H1 FY24, construction Volume increased 56.7% YoY to 2950 units.
Growth momentum in Construction Equipment segment continued driven by government thrust on infrastructure.
In Q2 FY24, railway revenue increased 28.8% YoY to Rs 234.3 crore. In H1 FY24, railway revenue increased 49.7% YoY to Rs 532.1 crore.
Order book for the railway division, at end of Sept 2023, was approx. Rs 870 crore.
Company was able to improve its EBITDA margin led by operating leverage, better realization, improved product mix and softening of commodity prices.
Going forward, management expects macro factors to remain positive.
Management indicated that northern and central markets are growing however, eastern and southern markets fell in Q2 FY24.
For H1 FY24, Capacity utilization of EAM (Escorts Agri Machinery) segment was around 85% and capacity utilization of Construction Equipment segment was around 65%.
During the quarter BHL (Backhoe Loader) industry went up 27.8%, PNC (Pick & Carry Crane) industry up by 73.2% YoY and Compactors Industry up by 63.5% YoY.
In Q2 FY24, company’s BHL market share stood at 1.2%, Compactor 6.1% and PNC (Pick & Carry Crane) 40.4%. Similarly, in H1 FY24, company’s BHL market share stood at 1.3%, Compactor 6.9% and PNC 39.6%.
|