Escorts Ltd today reported a marginal drop in its 2000-01 net profit at Rs 107.39 crore, against Rs 112.35 crore registered during the last fiscal. The company has cited a 10 per cent decline in tractor sales during the year as one of the reasons for the profit slump.
Sales turnover for the year, on the other hand, increased marginally to Rs 1,578.84 crore from last year's Rs 1,570.01 crore. The board of directors, which adopted the audited results here today, recommended a dividend of 45 per cent for the year.
Escorts chairman Rajan Nanda said: "The tractor industry sales are down this year by almost ten per cent despite a bumper crop. It is a problem of plenty, but not borne out by higher profits for the farmer.
In fact, there is some concern on whether the government will be able to continue offering support prices to farmers when the food reserve godowns are overflowing. However, having been in the agricultural machinery business for 56 years we see the slackening of demand for our tractors as a temporary phenomenon."
Escorts said it sold 45,000 tractors in 2000-01 and ended the fiscal with a 19.4 per cent market share.
Nanda said his company was now targeting a 23 per cent marketshare based on its enhanced product offering, which is likely to give it growth in volumes of up to 10 per cent.
Export of tractors is also gaining momentum. "We sold 2,176 tractors overseas during the year under review, up 29 per cent from the previous year. We expect to sell 2,500 tractors to the export market in the current year."
Escorts reported its leading subsidiaries have done well during the year, among them being Escotel, its cellular service company which achieved cash break-even last year.
Healthcare will remain a prime area of thrust. Escorts Heart Institute & Research Centre Ltd (EHIRCL) plans to create more cardiac centres in North India. It has already concluded a joint venture agreement for a hospital in Amritsar.
