Escorts bucks trend as Q1 net profit soars

The result was announced after market hours on Monday, 4 February 2013.

Meanwhile, the BSE Sensex was down 109.23 points, or 0.55%, to 19,641.96.

On BSE, 9.52 lakh shares were traded in the counter as against an average daily volume of 2.76 lakh shares in the past one quarter.

The stock hit a high of Rs 70.85 and a low of Rs 67.55 so far during the day. The stock had hit a 52-week high of Rs 93.30 on 17 February 2012. The stock had hit a 52-week low of Rs 55.45 on 27 July 2012.

The stock had underperformed the market over the past one month till 4 February 2013, falling 11.46% compared with the Sensex's 0.17% fall. The scrip had also underperformed the market in past one quarter, rising 1.83% as against Sensex's 5.31% rise.

The small-cap company has an equity capital of Rs 122.58 crore. Face value per share is Rs 10.

Earnings before interest taxes depreciation and amortization (EBIDTA) saw an increase of 74% to Rs 53 crore in Q1 December 2012 over Q1 December 2011.

EBIDTA margin expanded by 218 basis points to 5.15% in Q1 December 2012 over Q1 December 2011.

Escorts said its revenues expand by 25% to Rs 1028 crore in Q1 December 2012 over Q4 September 2012. The period gone by saw overall operating and financial performance improve significantly. This was reflected in raw material to income margins which came down to 72.5%, a decrease of 222 basis points. EBITDA and net profit margins also grew by 218 and 185 basis points respectively on a year-on-year basis, thus, reflecting improved efficiency and better cost control management. The performance was also augmented by increase in sales, effective product mix and broader product offering, Escorts said in a statement.

Commenting on the results, Rajan Nanda, Chairman Managing Director, Escorts Limited said: "At a time when the agricultural and infrastructure sector are experiencing stiff challenges, Escorts has chosen to mitigate this with a focussed strategy of high profitable and niche products, simultaneously expanding the bottom line while maintaining a healthy top line growth. We have chosen to modify our product mix, undertake technology and brand tie ups globally and by re engineering ourselves to reduce cost and promote efficiency.

Going forward, we expect the economy to sustain and gradually grow with a focus on agricultural and construction, both being inclusive and employment generating in nature. We expect Escorts Ltd., which has a vital stake in both these sectors, to gain substantially."

Nikhil Nanda, Joint Managing Director, Escorts Limited said: "The company has had a sound start to its financial year. With sharp focus on cost discipline, inter group synergies, diversified product portfolio and improved product mix, the company has embarked upon the strategic path to deliver value for all its stakeholders.

Our goal is to sustain profitability through rationalizing our group operations to achieve better operational margins, an improved product mix and better management of costs.

As the year progresses, we look forward to see greater opportunities in the agricultural and capital goods sectors, which will prove to be the backbone of our country's development. The company is aptly poised to make good this opportunity and enhance its market share and brand presence."

Escorts is an engineering conglomerate. The company has diversified business into four different segments. Escorts Agri Machinery (EAM), Escorts Construction Equipment (ECE), Escorts Railway Products (ERP) & Escorts Auto Products (EAP).

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