Escorts Profit Up 2 Per Cent To Rs 130 Cr, Payout At 45 Per Cent

Escorts Ltd, flagship company of the Rs 3,500-crore Escorts group, has registered a two per cent growth in net profit in 1997-98 at Rs 129.84 crore.

Escorts had posted a net profit of Rs 127.22 crore in 1996-97.

Escorts' sales rose by 15.7 per cent during the year to Rs 1,275.58 crore from Rs 1,102.35 crore in 1996-97, a company release said here.

The board of directors of the company, which approved the financial results for the last fiscal yesterday in Faridabad, also announced 45% dividend to be payable on an enhanced capital of Rs 68.07 crore.

The total shareholder funds have gone up to Rs 879 crore, which translates into equity reserves ratio of almost 12 times. The company continues to have a low debt-equity ratio.

The earning per share (EPS) for the year is Rs 19.07 on the increased equity. The book value per share improved to Rs 104 from Rs 93 in the previous year.

Escorts Ltd chairman Rajan Nanda said the company would table a capital restructuring plan at a shareholders' meeting on August 14, this year.

He said despite loss of business due to disinvestments, the company managed to register growth in sales and profits.

He informed that during the year the company sold 48,330 tractors as compared to 43,438 in the fiscal 1996-97. The company has now attained a marketshare of 19.3 per cent in tractor sales, he stated.

"We had launched an upgraded tractor model in the 22-40 hp segment and have plans to enter the 60-80 hp segment. The entry into this segment is projected to increase our marketshare to 24 per cent by the year 2002," he claimed. Nanda said the company would complete a total investment of Rs 240 crore this year in modernisation and expansion of agri-business.

He said that during the year 1997-98, Escorts completed its entire restructuring programme. Despite the loss of business value owing to divestments, the company managed to register growth in sales as well as profits.

"The third tractor plant of the company coming up in Pune will be operational in the third quarter of 1999 and along with this Escorts will have a capacity to manufacture 80,000 tractors annually," Nanda informed.

Escorts would be able to self-finance its future business expansion without taking recourse to borrowings, he said.

The company has planned a investment of Rs 67 crore for 1998-99, including a proposal to acquire 49 per cent equity in tractor manufacture and distribution company Long Manufacturing Company of the US.