Escorts gains after entering into JV with Amul Group for manufacturing specialised tractors

Escorts rose 3.74% to Rs 138.70 at 14:50 IST on BSE after the company said it entered into a joint venture with Rajkot-based Amul Group for manufacturing specialty tractor, 'Steeltrac'.

Meanwhile, the BSE Sensex was up 162.81 points, or 0.56%, to 29,042.19.

On BSE, so far 3.64 lakh shares were traded in the counter, compared with an average volume of 2.88 lakh shares in the past one quarter.

The stock hit a high of Rs 140.90 and a low of Rs 134 so far during the day. The stock hit a 52-week high of Rs 174.25 on 29 October 2014. The stock hit a 52-week low of Rs 102.15 on 8 May 2014.

The stock had underperformed the market over the past one month till 10 April 2015, falling 0.63% compared with 0.59% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 5.86% as against Sensex's 5.18% rise.

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

Escorts had joined hands with Amul Industries in 2012 for development and distribution of Steeltrac, a highly successful speciality tractor.

Steeltrac is a specialised tractor which is complimentary to general purpose tractors which can efficiently facilitate operations like inter-weeding for farmers growing row-crops such as groundnut, cotton and sunflower. Steeltrac will additionally revolutionize by mechanizing local, short distance haulage in the country. The market for specialised tractors has been growing tremendously and this strategic investment will further enhance Escorts' commitment towards bringing a wider range of products to Indian farmers, Escorts said in a statement.

Speaking on the alliance, Rajan Nanda, Chairman and Managing Director, Escorts Limited, said, "The Escorts- Amul joint venture is an excellent strategic fit, presenting a unique opportunity to leverage the complementary strengths of our robust product portfolio. There has been an exponential growth in the specialised tractors market and Escorts is glad to be a part of this segment. The market has witnessed a phenomenal growth from zero to approximately twenty thousand tractor units within last four years. Steeltrac extends the Escorts quality assurance to farmers in these niche segments and with the reach of distribution that Escorts has we will expand and lead these segments in the times to come."

Chandubhai K. Santoki, Chairman, Amul Group, said, "Amul is known for providing world class quality products at unmatched cost. For manufacturing specialised-tractors, we have set up a modern production facility at Rajkot with a capacity to produce over 10,000 tractors per year. The Escorts-Amul partnership will go a long way in addressing the farmers with special needs."

Net profit of Escorts declined 21.66% to Rs 35.69 crore on 9.71% decline in net sales to Rs 1042.34 crore in Q3 December 2014 over Q3 December 2013.

Escorts is among India's leading engineering conglomerates operating in high growth sectors of agri machinery, material handling & construction equipment, railway equipment and auto components. The group has earned the trust of over 5 million customers by way of product and process innovations over six decades of its existence. Escorts endeavors to transform lives in rural and urban India by leading the revolution in agriculture mechanization, modernization of automotive & railway technology and transformation of Indian construction

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