Escorts tumbles after dismal Q2 outcome

Escorts fell 5.85% to Rs 157 at 9:15 IST on BSE after the company reported net loss of Rs 7.86 crore in Q2 September 2014 as against net profit of Rs 43.63 crore in Q2 September 2013.

The company made the announcement after market hours on Wednesday, 5 November 2014.

Meanwhile, the BSE Sensex was up 12.69 points, or 0.05%, to 27,928.57.

On BSE, so far 89,000 shares were traded in the counter, compared with an average volume of 7.27 lakh shares in the past one quarter.

The stock hit a high of Rs 159 and a low of Rs 153.70 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 outperformed the market over the past one month till 5 November 2014, rising 11.46% compared with 5.07% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 43.50% as against Sensex's 7.75% rise.

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

Escorts' net sales rose 4.96% to Rs 986.61 crore in Q2 September 2014 over Q2 September 2013.

Escorts recorded an increase of 1.2% in tractor volumes to 15,013 tractors in Q2 September 2014 from 14,842 tractors in Q2 September 2013.

Construction equipment volumes also increased 13% to 747 units in Q2 September 2014 over Q2 September 2013.

The company absorbed the additional one-time exceptional expense of Rs 31.4 crore on account of a VRS that covered around 350 employees. As a consequence, the company recorded a loss of Rs 7.90 crore in Q2 September 2014.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 48.06% to Rs 33.5 crore in Q2 September 2014 over Q2 September 2013.

Escorts Agri Machinery volumes went up by 1.2% to 15,013 tractors in Q2 September 2014 over Q2 September 2013. Revenues went up by 5.8% at Rs 803 crore in Q2 September 2014 over Q2 September 2013.

Escorts Construction Equipment volume up by 13% with 747 units in Q2 September 2014 over Q2 September 2013. Revenue increased by 4.6% to Rs 121.50 crore in Q2 September 2014 over Q2 September 2013. This increase is the result of growing product acceptability in the market. The company will continue to develop & offer innovative products and move up the value chain.

Escorts Auto Product revenue up by 17% to Rs 26.8 crore in Q2 September 2014 as against Rs 22.90 crore in Q1 June 2014.

Escorts Railway Products posted strong growth with sales increasing by 11% to Rs 47.30 crore in Q2 September 2014 as against Rs 42.70 crore in Q1 June 2014. Earnings Before Interest & Tax (EBIT) margin up by 580 bps to 9.6% against 3.8% sequentially. The order book position as on 1 October 2014 was Rs 34 crore.

The Escorts Group is among India's leading engineering conglomerates operating in high growth sectors of agri machinery, material handling & construction equipment, railway equipment and auto components.

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