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Informist, Thursday, May 8, 2025

By Shakshi Jain

MUMBAI – Escorts Kubota Ltd. Thursday reported a sequential decline in its net profit for the March quarter, in line with expectations. The decline was largely due to setbacks related to an overseas subsidiary and a domestic joint venture. However, the company's bottom line for the quarter was slightly higher than the Street's estimate.

The agricultural and construction equipment manufacturer's net profit for the quarter was INR 2.98 billion, down 8% sequentially but over 8% on year. Analysts had expected the company to report a net profit of INR 2.45 billion. The adverse impact of the overseas arm and domestic joint venture was about INR 271 million, the company said in a press release.

Escorts Kubota's revenue for the reporting quarter was INR 24.30 billion, lower than the analysts' expectation of INR 25.24 billion. The tractor maker's top line was down more than 17% sequentially but up over 6% on year. 

Total expenses of the company were at INR 22.04 billion for the March quarter. Expenses changed largely in tandem with the company's revenue for the quarter, down by around 17% sequentially and up around 6% on year.

Escorts Kubota reported earnings before interest, taxes, depreciation, and amortisation of INR 2.93 billion for the quarter, down from INR 3.35 billion in the previous quarter. Its EBITDA margin during the quarter was 12.1%, up 70 basis points on quarter.

Tractor volume in Jan-Mar stood at 26,633 units, down from 32,556 units in the December quarter, the company said. The agri machinery segment's revenue was INR 19.75 billion, lower than INR 24.17 billion in the preceding quarter. The segment recorded an EBIT margin of 11.4% during the quarter, compared with 10.4% in the December quarter.

Sales volume of construction equipment totalled 1,719 units during the March quarter, down from 1,989 units in the previous quarter. The segment's revenue fell to INR 4.54 billion during the reporting quarter as against INR 5.16 billion in the December quarter. The segment's EBIT margin contracted 190 basis points to 9.1%. 

FY25 Updates

In the full year, Escorts Kubota's net profit rose nearly 16% on year to INR 12.51 billion. Its revenue during the year grew by 4.7% to INR 101.87 billion.

The company's agri machinery segment recorded sales worth INR 84.47 billion during the year, up from INR 78.97 billion in FY24. The segment's EBIT margin contracted by 50 basis points on year to 10.7% in FY25. Tractor volume for the year was 115,554 units, marginally higher from 114,396 units in the previous year. Capacity utilisation of the tractor segment stood at about 60% during the March quarter and about 70% in the full year. 

Escorts Kubota's construction equipment volumes were at 6,484 units in FY25 as against 7,141 units in the previous year. The segment's full year revenue totalled INR 17.30 billion, down from INR 18.18 billion in FY24. EBIT margin of the segment improved by 70 basis points on year to 9.9% in FY25. Capacity utilisation of the segment was around 30% in the March quarter and about 60% in FY25.  

The company announced a final dividend of INR 18 per share. Wednesday, shares of the company rose 1.8% after the company reported its March quarter earnings, but ended the session 0.3% lower at 3,195.20 on the National Stock Exchange.  End

Edited by Saji George Titus

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