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Stunted FY20 volume growth to hurt Escorts; net profit may see a 20% fall

The expected pain was reflected in the performance of the company and the sector in the June quarter

Escorts
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Escorts' 76-88 per cent of revenues and profits come from the agri-machinery (tractor) segment

Ram Prasad Sahu
Though the stock of tractor maker Escorts is down by half over the last year, the downward trend is unlikely to reverse any time soon given the muted June-quarter performance and a cautious outlook for the sector. Mitul Shah of Reliance Securities believes that delayed monsoon, the deficit in a few regions, lower water levels at reservoirs and high base over the previous year are the major hurdles for the tractor industry over the medium term. After three years of strong growth, analysts expect the tractor industry to post a fall of 7-10 per cent each in FY20 and FY21.

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Topics : Escorts

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First Published: Jul 31 2019 | 12:27 AM IST

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