Capitaline

Results 07-Aug-21

Analysis

Escorts

Good operating show on weak base

Net sales (including other operating income) of Escorts for the quarter ended Jun 2021 has increased 56% to Rs 1701.79 crore. Operating profit margin has jumped from 11.2% to 13.9%, leading to 94% rise in operating profit to Rs 236.40 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 49.01% to 63.25%. Purchase of finished goods cost fell from 8.49% to 6.38%. Employee cost decreased from 15.27% to 7.85%. Other expenses fell from 12.80% to 9.28%. Other income rose 60% to Rs 48.82 crore. Provision for interest rose 44% to Rs 3.48 crore. Provision for depreciation rose 18% to Rs 31.95 crore. Profit before tax grew 103% to Rs 249.79 crore. Provision for tax was expense of Rs 60.95 crore, compared to Rs 29.05 crore. PAT was up 101% to Rs 188.84 crore. Share of profit/loss was 617% lower at Rs -10.39 crore. Minority interest increased 117% to Rs 0.26 crore. Net profit attributable to owners of the company increased 93% to Rs 178.19 crore.

Sales of Agri Machinery Products segment has gone up 47% to Rs 1436.30 crore (accounting for 84.66% of total sales). Sales of Railway Equipments segment rose 117% to Rs 119.40 crore (accounting for 7.04% of total sales). Sales of Construction Equipment segment has gone up 168% to Rs 140.82 crore (accounting for 8.30% of total sales).

Profit before interest, tax and other un-allocable items (PBIT) has jumped 89% to Rs 237.43 crore. PBIT of Agri Machinery Products segment rose 59% to Rs 223.32 crore (accounting for 94.06% of total PBIT). PBIT of Railway Equipments segment rose 1125% to Rs 17.40 crore (accounting for 7.33% of total PBIT). PBIT of Construction Equipment segment fell 80% to Rs -3.29 crore (accounting for -1.39% of total PBIT).

PBIT margin of Agri Machinery Products segment rose from 14.41% to 15.55%. PBIT margin of Railway Equipments segment rose from 2.59% to 14.57%. PBIT margin of Construction Equipment segment rose from negative 31.99% to negative 2.34%. Overall PBIT margin rose from 11.56% to 14.00%.

Management comment

Nikhil Nanda Chairman and Managing Director commenting on the results said, ‘While respective states are gradually activating controlled unlocks, we at Escorts, are extremely careful and adhering to all safety guidelines. Well-being & safety of our customers, dealers, suppliers, and our employees remain our topmost priority. We have facilitated vaccination for all our employees and working closely with our distribution base to support vaccinations across dealerships and customers and also in local communities. Unlocking has helped in building demand, easing transport & logistics and improved supply chain across farming community to create a positive industry momentum and we certainly hope that with sustained government efforts, tractor and Agri equipment industry and construction equipment industry will be back on a growth path. While we are witnessing some encouraging developments in the railway equipment space too, it may take some time to come out of the impact of the current environment and regain the pre-Covid business levels. We still need to be well prepared and firm up readiness for any further pandemic hit backs. We are aligned and fully supportive to all national efforts to fight the pandemic, and believe, this shall pass soon.’

Other developments

Promoters’ stake was 36.59% as of 30 June 2021, compared to 40.25% as of 30 June 2020.

Escorts : Consolidated Results
	2106 (3)	2006 (3)	Var. (%)	2103 (12)	2003 (12)	Var. (%)
Sales	1701.79	1089.26	56	7014.42	5810.09	21
OPM (%)	13.9	11.2		16.1	11.4
OP	236.40	121.98	94	1126.76	662.40	70
Other inc.	48.82	30.59	60	160.38	97.60	64
PBIDT	285.22	152.57	87	1287.14	760.00	69
Interest	3.48	2.41	44	13.34	17.23	-23
PBDT	281.74	150.16	88	1273.80	742.77	71
Dep.	31.95	27.08	18	118.28	107.22	10
PBT	249.79	123.08	103	1155.52	635.55	82
EO Exp	0.00	0.00		0.00	9.22	-100
PBT after EO	249.79	123.08	103	1155.52	626.33	84
Taxation	60.95	29.05	110	283.15	153.53	84
PAT	188.84	94.03	101	872.37	472.80	85
Share of profit from JV/Assoc/Investment	-10.39	-1.45	617	-0.74	-1.08	-31
Minority Interest	0.26	0.12	117	0.17	-0.53	-132
Net Profit	178.19	92.46	93	871.46	472.25	85
EPS (Rs)*	#	#		64.6	35.6
* EPS is on current equity (post preferential issue to Koboto & before extinguis of equal share from trust) of Rs 134.83 crore, Face value of Rs 10
# EPS is not annualised due to seasonality of business
Figures in Rs crore
Source: Capitaline Corporate Database

Escorts: Consolidated Segment Results
Segment	% to total	2106 (3)	2006 (3)	Var. (%)	% to total	2103 (12)
Sales
Agri Machinery Products	84	1436.30	976.71	47	82	5732.26
Construction Equipments	8	140.82	52.49	168	11	776.11
Railway Equipments	7	119.40	54.91	117	7	478.96
Others/ Unallocated	0	5.27	5.15	2	0	27.09
Total Sales	100	1701.79	1089.26	56	100	7014.42
Inter Segment Revenue
Net sales		1701.79	1089.26			7014.42

PBIT
Agri Machinery Products	94	223.32	140.74	59	91	1032.55
Construction Equipments	-1	-3.29	-16.79	-80	2	27.81
Railway Equipments	7	17.40	1.42	1125	7	76.75
Total PBIT	100	237.43	125.37	89	100	1137.11
LESS: Interest expenes		3.48	2.41	44		13.34
Unallocable expenses		-5.45	1.33	-510		-31.01
PBT before EO		239.40	121.63	97		1154.78
Less EO
PBT		239.40	121.63			1154.78
Profit from discontinued operations (auto anciliary)
PBT before profit from discontinued operations		239.40	121.63			1154.78
Note: Figures in Rs crore

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