Amit Panday
New Delhi: Driven by robust demand for tractors, Escorts Ltd has posted a net profit of INR 271 crore, up 94% year-on-year (YoY), for the March quarter. It’s net profit stood at INR 140 crore in Q4 FY2020.
However, it is to be noted that March last year saw covid-19 led disruptions for more than a week as the nation went into a complete lockdown on account of the pandemic.
The Faridabad-based manufacturer’s revenue from operations were at INR 2,210 crore, up 60% YoY on INR 1,381 crore in Q4 FY20.
Escorts sold 32,588 tractors during the March quarter as against 20,108 units in the year-ago period. The 62% YoY growth in tractor volumes resulted in total segment revenue of INR 1,739 crore, up 64% YoY from INR 1,058 crore revenues posted by the company’s agri machinery business in Q4 FY2020.
“The Ebit (earnings before interest and taxes) margins for the quarter ended March 2021 was at 17%, up by 120 bps, as compared to 15.8% in the corresponding period last year,” the company said in a statement.
Meanwhile for FY2021, the company’s net profit is at INR 874 crore, up 80% YoY. In FY2020, the company’s net profit stood at INR 486 crore as the demand for tractors struggled amid economic slowdown triggered by the liquidity crisis.
The entire country is under the severe impact of the second wave of pandemic. This time it has impacted the rural geographies as well affecting our core customer baseNikhil Nanda, Chairman and MD, Escorts Ltd.
Total revenue from operations for the last fiscal also grew by 20% YoY to INR 6,929 crore, the company reported. Tractor sales were up 24% YoY at 1,06,741 units in FY21 as against 86,018 units in FY20. Total revenue posted by the agri machinery business stood at INR 5,667 crore for the last fiscal, up 28% against INR 4,437 crore in FY20.According to the company, operating leverage, favourable product mix and cost control measures helped in posting the highest-ever Ebit margin at 18.2% in FY21. The same in FY20 was at 13%.
Covid-19 spread in rural a grave concern
While the pandemic impacted the urban areas more than rural areas last year, the virus in the second wave has penetrated deep into the rural areas at a time when the harvest is underway and good monsoons are expected.
“The entire country is under the severe impact of the second wave of pandemic. This time it has impacted the rural geographies as well affecting our core customer base,” warns Nikhil Nanda, chairman and managing director, Escorts Ltd.
Nanda added that the current demand is subdued and various state lockdowns continue to impact the supply chain.
“We believe this is a temporary phase, which shall soon be over. Following all government guidelines, we are making all efforts to ensure that farming communities are well served in the upcoming sowing season,” he said.
He also warned that the second wave would impact the company’s construction and railway equipment businesses.
“While we witnessed some positive developments in the construction and railway equipment space too in Q4, we might see an impact of the current environment on these businesses going ahead,” Nanda said.
Escorts’ construction equipment sales were at 1,604 units, up by 63% YoY. The business posted revenues at INR 322 crore in Q4 FY21, up by 53% YoY.
However, for the full fiscal, the construction equipment sales stood at 3,913 units last fiscal as against 4,042 units in FY20. The company said its construction equipment business posted revenues of INR 776 crore in FY21, down 8% YoY from INR 840 crore in FY20.
The company said revenues from its railway equipment division stood at INR 479 crore in FY21 as against INR 477 crore a year-ago. Escorts’ order book for the railway division stood at more than INR 340 crore as of end-March. These orders would be executed over the next 6-8 months, the company said.
