Escorts Kubota recorded 50.4% fall in net profit to Rs 87.6 crore despite a 12.2% rise in revenue from operations to Rs 1,883.5 crore in Q2 FY23 over Q2 FY22.
The company's profitability was adversely impacted due to unabsorbed inflation, both in commodity and other costs and an exceptional item of Rs 72 .8 crore on account of impairment of investment in the joint venture Tadano Escorts India.
EBIDTA fell by 32.6% to Rs 152.7 crore in Q2 FY23 from Rs 226.7 crore in Q2 FY22. EBIDTA margin was 8.1% in Q2 FY23 as against 13.5% in Q2 FY22.
Profit before tax before exceptional items in Q2 FY23 stood at Rs 191.5 crore, down by 19.4% from Rs 237.4 crore in Q2 FY22.
In the Agri Machinery division, tractor volumes at 23,703 units in quarter ended September 2022 went up by 12.5% as against 21,073 units in the corresponding period last fiscal. Segment revenue was at Rs 1,454.9 crore in quarter ended September 2022, up 15.7% YoY. Steep inflation in commodities prices, resulted in lower EBIT margin at 8.4%, as compared to 14.9% in corresponding period last fiscal.
Construction equipment sales volume for the quarter ended September 2022 was 917 machines as against 1,074 machines in corresponding period last fiscal, down 14.6% YoY. Segment revenues came at Rs 241. 9 crore in quarter ending September 2022, down 3.1% YoY.
Revenue of the Railway Products division was Rs 182 crore in quarter ending September 2022, up by 7% as against Rs 170.2 crore in the corresponding quarter. Order book for the division, at end of September 2022, was more than Rs 900 crore.
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Nikhil Nanda, chairman and managing director, said: "There has been a positive momentum across businesses, and we expect it to continue. Overall macroeconomic factors and farmer sentiments remain positive led by above normal monsoon and onset of an early festive season which will favorably support Agri business.
With increasing flow of Government investments for infrastructure development, the demand for construction equipment is likely to be good. Our broad product line in railway business has been garnering good order booking and we expect a strong fiscal ahead. We also hope that various government actions will help in stabilizing inflation to support the economy at large, propelling country's overall growth and development."
The Escorts Group is an Indian engineering company that operates in the sectors of agri-machinery, construction and material handling equipment, and railway equipment.
The scrip fell 1.15% to end at Rs 1991.30 on the BSE today.
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