Escorts rallied 16.89% to Rs 303.80 at 15:21 IST on BSE after the company announced the divestment of its OEM & export business of auto product division to Badve Engineering, Pune in an all cash deal.
The announcement was made during market hours today, 11 August 2016.Meanwhile, the S&P BSE Sensex was up 81.37 points or 0.29% at 27,856.25.
Heavy volumes accompanied the stock's rally. On BSE, so far 27.93 lakh shares were traded in the counter as against average daily volume of 4.13 lakh shares in the past one quarter. The stock hit a high of Rs 311.85 so far during the day, which is a also its record high for the counter. The stock hit a low of Rs 255.20 so far during the day. The stock had hit a 52-week low of Rs 112.70 on 12 February 2016. The stock had outperformed the market over the past one month till 10 August 2016, surging 18.46% compared with 2.39% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rallying 50.27% as against Sensex's 7.77% rise.
The mid-cap company has equity capital of Rs 122.58 crore. Face value per share is Rs 10.
Escorts announced the divestment of its OEM & export business of auto product division to Badve Engineering, Pune in an all cash deal as part of the planned strategic reorientation of the business to focus on core verticals in the agri machinery, construction equipment and railway equipment. The auto products business comprises an extensive product basket catering to OEMs (original equipment manufacturers) and replacement market in India and overseas markets for all vehicle categories including motorcycles, scooters, passenger cars, commercial vehicles, and multi-utility vehicles, Escorts said in a statement.
Dipankar Ghosh, CEO of Escorts Auto Products and Escorts Railways Products said that the transfer of OEM and Export business to Badve Engineering would help Escorts to focus on its core areas.
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Escorts' net profit jumped 33.5% to Rs 46.96 crore on 9.4% growth in net sales to Rs 1047.35 crore in Q1 June 2016 over Q1 June 2015.
The Escorts Group is among India's leading engineering conglomerates operating in high growth sectors of agri machinery, construction equipment, railway equipment and auto components.
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