Higher sales fail to pull Escorts off red

BS 200 SCORECARD

Escorts continued to be in the red, despite a turnaround in its tractor sales that grew a hefty 65 per cent to 13,697 units.

The company has posted a net loss of Rs 3.98 crore for the quarter ended December 2006, an improvement over the net loss of Rs 18.32 crore recorded during October-December 2005.

The company's turnover increased 59 per cent in the December 2006 quarter to Rs 517.8 crore against Rs 326 crore for the same quarter in the previous financial year.

Escorts, however, expects to be back in the black for the year ending September 30, 2007, as its EBITDA (earnings before interest, tax, depreciation and amortisation) was positive at Rs 27.6 crore against Rs 15 crore in October-December 2005.

Shailendra Tandon, chief financial officer, said, "We are working on different cost-saving measures and are also adopting a changed pricing policy, which is expected to help us make net profits in the current quarter (January-March)."

"The government's support to emerging and innovative farm practices across the country and strong exports demand have provided a boost to the agri business and an extra opportunity for Escorts' growth," he added.

Escorts expects a decent 20 per cent growth in its topline "� for products such as tractors, agri machinery, auto components and railway equipment "� for the financial year ending September 30, 2007. It also expects buoyant sales to cut losses.

Executive Director Nikhil Nanda said, "With improved performance and a lean cost structure, we are confident of completing the full year with a net profit."