Escorts November 2021 total sales tumble 30% Y-o-Y to 7,116 units

Escorts' total tractor sales skid 30% Y-o-Y (year-on-year) to 7,116 units in November 2021 from 10,165 units sold in November 2020.

On a sequential basis, Escorts recorded a 47.34% drop in total sales in November 2021 from 13,514 units sold in October 2021.

Domestic tractor sales in November 2021 was at 6,492 tractors as against 9,662 tractors in November 2020, registering a decline of 32.8% Y-o-Y (year-on-year).

The delayed harvest of Kharif crops owing to the late monsoon rains this year affected the rural cash flows and hence, the retail demand. This is expected to be a temporary phenomenon and cash flows should start improving soon as Kharif harvest gets fully monetized, the company highlighted in its press statement. The industry wholesale in November 2021 was further impacted by post-season channel destocking. However, going forward, all macroeconomic factors remain in favour of the tractor industry while high inflation remains a worry impacting profitability.

Export tractor sales in November 2021 was at 624 tractors against 503 tractors sold in November 2020, registering a growth of 24.1% on a Y-o-Y basis.

Escorts Construction Equipment Segment (ECE) in November 2021 sold 312 machines as against 417 machines sold in November 2020, registering a fall of 25.2% year-on-year and a decline of 32.46% on a month-on-month (M-o-M) basis.

Steep increase in commodity prices and rental rates still remains a concern for the retail customers and this seems to be a major reason in postponement of order finalisation. The southern markets remain in stress due to the extended monsoons and the delay in mobilisation of projects. Escorts will continue to remain positive on construction equipment demand due to the big tail of projects under execution under National Infrastructure Pipeline (NIP) and the new projects awarded by the Federal government.

Escorts reported 23.7% fall in standalone net profit to Rs 173.47 crore on a 1.2% rise in net sales to Rs 1,673.85 crore in Q2 FY22 over Q2 FY21.

Shares of Escorts were trading 0.43% higher at Rs 1,853.60 on BSE. The Escorts Group is an Indian engineering company that operates in the sectors of agri-machinery, construction and material handling equipment, and railway equipment.

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