Escorts Q1 results FY22: Net profit at 185.2 cr
Tractor manufacturing major Escorts recorded a two-fold jump in net profit during the quarter ended June 2021. The firm posted a 101% increase in standalone net profit at Rs 185.2 crore against Rs 92.2 crore in the previous year. Revenue from operations developed as sales surged during the quarter. The company recorded a 57.4% rise year-on-year in revenue, from operations, at Rs 1,671.5 crore in Q1 FY22, against Rs 1,061.6 crore in the Q1 FY21.
EBITDA for the quarter ended June 2021, at Rs 233.2 crore was increased by 95%, compared to Rs 119.6 crore in the corresponding quarter ending June 2020. EBITDA margin rose 269 basis points to 14% during the quarter under review. During the quarter, Escorts' tractor sales increased 42.9% to 25,935 units, compared to 18,150 tractors, in the corresponding period last fiscal. Segment revenue grew by 48% to Rs 1,411.4 crore, compared to Rs 953.5 crore in the same period last fiscal.
In a regulatory filing, Escorts said that this quarter, despite commodity cost inflation, with several cost reduction initiatives and operating leverage, EBIT margins improved by 112 bps to 15.6% in the quarter ended June 2021 compared to 14.5% in the same period last fiscal.
Escortssold 606 units of construction equipment during the June quarter this year, which surged 159% compared to 234 machines in the corresponding period last year. Segment revenue was increased 168.3% to Rs 40.8 crore in the quarter ending June 2021 compared to Rs 52.5 crore in the same period last fiscal. EBIT margin for the first quarter ended June 2021 was negative 2.3% compared to negative 32.0% in the same period last fiscal.
The company told the media that moving forward with enhanced funding availability and government thrust on infrastructure projects, demand is likely to reach its full potential from October 2021 onwards post the monsoon season.
In the railway equipment division, segment revenue for the first quarter rose by 117.5% at Rs 119.4 crore in the quarter ending June 2021 compared to Rs 54.9 crore in the same quarter. Sales from new products more than doubled and now contribute 63% to total division sales compared to 43% last year corresponding quarter.
The company told the media that Indian Railways is not running its entire operations yet, due to the unprecedented Covid-19 pandemic and have reduced their annual production rate, impacting fresh order tendering and order inflow. The order book for the division, at the end of June 2021, was above Rs 300 crore. Moving forward with government safety measures and vaccination drives picking up at a fast pace, they expect the tendering process to get back to the pre-Covid level within the current fiscal.
Nikhil Nanda, Chairman and Managing Director, Escorts, told the media that unlocking has assisted in strengthening demand, facilitating transport, logistics and enhanced supply chain across the farming community to form a positive industry momentum. They hope that with sustained government efforts, the tractor, agri equipment industry, and construction equipment industry will be back on a growth track.
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