Escorts hits new high on good Q4 results; stock zooms over 100% in 2017

The stock hit a new high of Rs 681, up 6% on BSE in intra-day trade

Escorts hit a new high of Rs 681, up 6% on BSE in intra-day trade, after reported a standalone net profit of Rs 59.48 crore in March 2017 (Q4FY17) quarter against Rs 18.36 crore in year ago quarter.

EBITDA (earnings before interest, tax, depreciation and amortization) margin at 7.1% during the reporting quarter, up by 173 basis points over the previous year quarter. However, sequentially down by 125 points. Revenue grew 29.5% to Rs 1,044 crore on year on year basis.

Volume growth, increase in share of market and cost reduction initiatives contributed to increase in margins. Increase in commodity prices has partially impacted the performance, Escorts said in a press release.

Material handling has been the biggest gainer in Q4FY17 with growth of 43% followed by compactors with 16.5% and Backhoe loader by 13.8%, it added.

The long term growth fundamentals of tractor industry are strong with lowering of the replacement cycle, but the pace of the central & state Government’s policy roll out would govern the short term industry performance.

The company recorded a one-time gain of Rs 15 crore, received from Escorts Benefit Trust towards surplus left in the Trust after meeting all the liabilities of the Trust towards fixed deposit holders of Escorts Finance Limited. 

Thus far in the calendar year 2017, the stock zoomed 130% as compared to 17% rise in the S&P BSE Sensex.

At 2:16 am; the stock was up 5.5% at Rs 678 on BSE, as compared to 0.5% rise in the benchmark index. The trading volumes on the counter jumped four-fold with a combined 4.67 million shares changed hands on BSE and NSE so far.