Escorts Kubota shed 1.08% to Rs 1,984 after the company's standalone net profit slipped 7.5% to Rs 186.4 crore despite a 14.82% rise in revenue from operations to Rs 2,263.67 crore in Q3 FY23 over Q3 FY22.
The company's profitability was adversely impacted due to unabsorbed commodity price inflation coupled with an exceptional item of Rs 53.1 crore on account of impairment of investment in the joint venture Tadano Escorts India.
Profit before tax stood at Rs 241.40 crore in the quarter ended 31 December 2022, down 10.2% from Rs 268.82 crore posted in Q3 FY22.
EBIDTA tumbled 31.7% to Rs 190.3 crore in Q3 FY23 from Rs 278.6 crore reported in Q3 FY22. EBIDTA margin reduced to 8.4% in Q3 FY23 as compared with 14.1% registered in the same period last year.
In Escorts Agri Machinery segment, tractor volumes stood at 28,025 units in the quarter ended 31 December 2022, up by 10.7% as against 25,325 units in the corresponding period last fiscal. Segment revenue was up by 12.4% at Rs 1,708 crore in Q3 FY23 as against Rs 1,519.3 crore posted in the Q3 FY22. In this quarter unabsorbed inflation in the commodities prices and adverse product mix has resulted in lower EBIT margin at 8.3%, as compared to 15.7% recorded in last year same period.
Construction Equipment sales rose 5% to 1,209 machines in the quarter ended 31 December 2022 from 1,151 machines sold in the corresponding quarter previous year. Segment revenues went up by 10.7% at Rs 306.1 crore in Q3 FY23 as against Rs 276.5 crore in Q3 FY22. EBIT margin turned positive at 2.2% as compared with 2.5% reported in corresponding period last fiscal.
The company's Railway Products division reported highest ever quarterly revenue of Rs 249.3 crore in Q3 FY23, recording a growth of 43.4% as against Rs 173.9 crore posted in the same period a year ago. EBIT margin stood at 13.1% in Q3 FY23 from 14.3% reported in Q3 FY22.
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On consolidated basis, Tractor manufacturer's consolidated net profit fell 6.89% to Rs 180.82 crore despite a 14.67% jump in revenue to Rs 2,291.35 crore in Q3 FY23 over Q3 FY22.
Nikhil Nanda, chairman and managing director of Escorts Kubota, said, There has been positive & continuous growth across businesses, arid we feel government spending on core sectors will favour demand across industry segments. We have recently announced our mid-term business plan and all our strategic efforts are directed in achieving the targeted growth. In agri business, rural sentiments continue to remain favourable owing to improved rabi sowing assisted by good monsoon this year.
He further added, We are witnessing improved demand across products in our construction business too as the infrastructure projects are now moving at a fast pace and expect this demand to continue for the balance period of this fiscal year. Railway business is consistently growing on order book, and we look at a good performance ahead. We will continue to invest in new products, innovative & digitised processes, and wider global distribution for enhanced customer coverage. While inflation impact on margin may take some time to normalise, the overall macroeconomic factors remain favourable for overall economic growth.
Seiji Fulruoka, deputy managing director of Escorts Kubota, said, Our mid-term business plan has mapped opportunities across our core business verticals, and we are hopeful that with our strategic initiatives & operational efficiency across segments, we will be able to achieve desired growth. We will continue to develop product mix and integrate innovation for enhanced customer experience and leverage on growing demand. Enhanced focus on farming prosperity and infrastructure development will always be one of our main focus and we will continue to contribute in the space through our technology offering.
Escorts Kubota is an engineering conglomerate. The company has diversified business across three different verticals viz., agri machinery, construction equipment & railway equipment division.
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