Earnings Review
Escorts Kubota Oct-Dec PAT, revenue up nearly 9% on year
This story was originally published at 18:02 IST on 10 February 2025
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--Escorts Kubota Oct-Dec net profit INR 3.23 bln vs INR 2.98 bln year ago
--Analysts saw Escorts Kubota Oct-Dec net profit INR 3.23 bln
--Escorts Kubota Oct-Dec revenue INR 29.35 bln vs INR 27.06 bln year ago
--Escorts Kubota to pay INR 10 per share interim dividend
--Escorts Kubota Apr-Dec net profit INR 9.53 bln vs INR 8.07 bln year ago
--Escorts Kubota Apr-Dec revenue INR 77.57 bln vs INR 74.41 bln year ago
--Escorts Kubota Oct-Dec agri machinery sales INR 24.17 bln vs INR 22.09 bln
--Escorts Kubota Oct-Dec EBITDA INR 3.35 bln, up 3.6% on year
--Escorts Kubota Oct-Dec agri machinery EBIT margin 10.4% vs 12.1% year ago
--Escorts Kubota Oct-Dec construction ops EBIT margin 11% vs 8.1% yr ago
--Escorts Kubota Oct-Dec EBITDA margin INR 11.4%, down 54 bps on year
--Escorts Kubota Oct-Dec tractors segment capacity utilisation 60%
--Escorts Kubota Oct-Dec contruction equipment ops capacity utilisation 95%
By Akshay V. Johnson
MUMBAI – Escorts Kubota Ltd. reported high-single-digit growth in net profit and revenue for the December quarter, led by a 5% on-year growth in tractor volumes. The company's net profit for the quarter was in line with analysts' expectations. The company also reported its highest revenue in the December quarter since at least 2014. However, its revenue for the quarter was below analysts' eatimates.
Escorts Kubota has restated its earnings for the year-ago quarter to account for the amalgamation of its joint ventures, Escorts Kubota India Pvt. Ltd. and Kubota Agricultural Machinery India Pvt. Ltd., with the company.
The company reported a net profit of INR 3.23 billion for the December quarter, up 8.5% from INR 2.98 billion in Oct-Dec 2023, exactly as analysts had estimated. Its revenue for the quarter was INR 29.35 billion, up 8.5% from INR 27.06 billion a year ago. Analysts had estimated the company's revenue at INR 30.76 billion.
Sequentially, the company's net profit was down 1%, but revenue was up 30%. The company's other income for the quarter was up 9% on year at INR 1.09 billion.
During the reporting quarter, the company sold 32,556 tractors, up 5% from 31,155 tractors sold a year ago. Sequentially, Escorts Kubota's tractor sales grew more than 25%. The company exported 971 tractors during the quarter, down 29% from a year ago.
The company reported total expenditure of INR 26.64 billion for the December quarter, up 8.8% on year. Cost of materials consumed, which accounts for 56% of the company's total expenditure, was INR 14.96 billion for the December quarter, up 11.5% on year. The company registered an on-year growth in cost of materials consumed for the first time in five quarters. Its other expenses were up 4.4% on year at INR 2.58 billion. Employee benefit expenses rose 13.8% on year to INR 1.98 billion.
For the nine months ended Dec. 31, the company's net profit was INR 9.53 billion, up 18% on year, and revenue was up 4% on year at INR 77.57 billion.
The company's earnings before interest, taxes, depreciation, and amortisation rose 3.5% on year to INR 3.35 billion, with an EBITDA margin of 11.4%, down 54 basis points from the year-ago quarter. Analysts had estimated the company would report an EBITDA of INR 3.82 billion.
In the agri machinery segment, the company reported a revenue of INR 24.17 billion for the December quarter, up 9.4% on year. The earnings before interest and taxes margin for the segment was 10.4%, down 170 basis points from a year ago.
The tractor segment had a capacity utilisation of 60% during the quarter. The agri machinery segment, which includes the tractor segment, contributed 82% of the company's revenue for the December quarter. For the nine months ended Dec. 31, the company reported a revenue of INR 64.73 billion for the segment, up 5.7% on year.
In the construction equipment segment, the company reported a revenue of INR 5.16 billion for the December quarter, up 4.1% on year. The company's EBIT margin for the segment was 11%, up 390 basis points from the year-ago period. The construction equipment segment had a capacity utilisation of 95% during the quarter. For Apr-Dec, the company reported a revenue of INR 12.76 billion for the segment, down from INR 13.12 billion a year ago.
In the railway equipment segment, the company reported a revenue of INR 2 billion for the December quarter, down 2.2% on year. For the nine months ended Dec. 31, the company reported a revenue of INR 6.56 billion for the segment, down 11% on year. As of Dec. 31, the company's order book in the segment was INR 8.9 billion. On Oct. 23, the company had entered into an agreement with Sona BLW Precision Forgings Ltd. to transfer the existing railway equipment business division as a going concern, on slump-sale basis, for a lumpsum cash consideration of INR 16 billion.
Escorts Kubota has announced an interim dividend of INR 10 per share with a record date of Feb. 14. The company announced the resuts after market hours. On Monday, shares of the company closed at INR 3,303.10 on the National Stock Exchange, up 1%. End
Edited by Rajeev Pai
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