The tractor manufacturer reported an exceptional item during the quarter representing provision for impairment in investment in Escorts Crop Solutions (ECS, a subsidiary company) amounting to Rs 24.40 crore.

EBIDTA reduced 6.2% to Rs 235.8 crore in Q4 FY23 from Rs 251.5 crore reported in Q4 FY22. EBIDTA margin slipped to 10.8% in Q4 FY23 as compared with 13.5% registered in the same period last year.

In Escorts Agri Machinery segment, tractor volumes at 24,765 units went up by 13.1% as against 21,895 units in the corresponding period last year. The segment revenue grew 13.6% to Rs 1,557.5 crore in the quarter ended March 2023 as against Rs 1,370.8 crore in corresponding period last year. EBIT margin for Q4 FY23 came at 9.9% as compared to 15.4% in the same quarter previous year and up by 159 bps against 8.3% in sequential quarter, led by better realization and softening in commodity prices.

Construction Equipment sales volume at 1,528 machines went up by 18.8% as against 1,286 machines in corresponding period last year. The segment revenues increased 20.5% at Rs 384.8 crore in quarter ending March 2023 as against Rs 319.5 crore in corresponding period last year. EBIT margin was up to 8.1% as against 3.6% in corresponding period last year, led by higher volume, better product mix and softening in commodity prices.

The company's revenue for railways product segment came at Rs 237.2 crore, up by 37.3% as against Rs 172.8 crore in corresponding period last year. EBIT margin was up to 14.0% in quarter ended March 2023 as against 13.1% in corresponding period last year.

On yearly basis, the company's net profit decreased 20.72% to Rs 606.98 crore in FY23 as against Rs 765.61 crore in FY22. Revenue from operations stood at Rs 8,344.95 crore, registering a growth of 15.95% year on year.

The profitability was adversely impacted mainly due to commodity price inflation coupled with exceptional item of Rs 97.2 crore on account of impairment of investment in the Joint Venture Tadano Escorts India Private Limited and wholly owned subsidiary Escorts Crop Solutions.

On consolidated basis, the tractor maker's consolidated net profit rose 13.94% to Rs 216.46 crore on 17.96% jump in revenue to Rs 2,290.16 crore in Q4 FY23 over Q4 FY22.

The company's consolidated net profit declined 13.45% to Rs 636.65 crore despite of 15.74% rise in revenue from operations to Rs 8,428.69 crore in FY23 over FY22.

Nikhil Nanda, chairman and managing director of Escorts Kubota, said, "Our efforts are aligned with our mid term business plan for achieving the targeted growth in coming years. In agribusiness, while the 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, we expect demand momentum to continue across geographies in the coming quarters.

We witnessed growth across the construction equipment portfolio towards the second half of this fiscal year across material handling, earth moving as well as road segment. The current market sentiments are positive, and demand is expected to remain buoyant due to the continuous focus of the government towards infrastructure projects. Railway business has also been consistently growing and the focus on rail network and connectivity will further provide impetus to the segment. Our investments in expanding coverage, building capacity, and producing innovative product lines will continue for enhanced customer reach and product experience."

Seiji Fulruoka, deputy managing director of Escorts Kubota, said, “We are committed to offer state of the art technology and solutions to our customers for increased productivity and operational efficiency. Our efforts across domestic and export geographies are well mapped to leverage on opportunities across our core business verticals, and we are hopeful that with our strategic initiatives we will be able to achieve desired growth. Quality and performance will be our topmost priority and we will continue to focus on innovation and enhancing customer experience.”

Meanwhile, the board recommended dividend of Rs 7 per equity share for the financial year 2022-23, other than the shares held by Escorts Benefit and Welfare Trust, subject to the approval of the shareholders.

Escorts Kubota is an engineering conglomerate. The company has diversified business across three different verticals viz., agri machinery, construction equipment & railway equipment division.