Escorts Kubota Q3 Results Review - Steady; Near Term Outlook Weak Though: Yes Securities

Yes Securities Report

Escorts Kubota Ltd.'s Q3 FY24 results while were steady with no major surprises across parameters. The key positives were-

1. better average selling price and benign raw material led tractors segment Ebit margins expansion to 13.8% (+160 bp QoQ/ +550 bp YoY),

2. favorable mix in railway business (led by spares and exports) led to Ebit margins at 18.4% (+530 bp YoY/ flat QoQ).

Construction equipment business Ebit margins at 8.3% (-190bp QoQ), was a negative surprise led by raw material inflation. The sustenance of margins to be influenced by-

1. weak operating leverage due to further decline in near term tractor volumes and

2. raw material inflation likely to increase QoQ.

The guidance of ~6-7% decline in industry volumes in FY24E (implied decline of 12-13% in q4 FY24) to weigh near term earnings, we remain constructive on growth opportunities for merged entity in tractor, implements, components sourcing and exports over mid-term.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.