The shares have delivered solid returns in the last three year too with 182% rise and gained about 130% in the last three years.
Escorts Kubota offers agricultural machinery, construction and material handling machines, and railway equipment, serving customers worldwide.
It has a market capitalisation of about Rs 31,400 crore and an EPS of 67.18 on a trailing twelve month (TTM) basis. The stock is currently trading at a PB of 3.73.
According to the shareholding pattern available with the exchanges, promoters own majority of the stake at 67.64%, while the rest of 30.40% lies with the public shareholders.
Among the public shareholders, mutual funds own about 8.13% stake in the company, while foreign portfolio investors have 5.19% stake. The company is backed by Rekha Jhunjhunwala with 1.62% stake
Escorts reported an almost 93% jump in first-quarter profit, led by the increased demand for its construction and railway equipment. Net profit for the quarter through June was Rs 283 crore ($34.4 million), compared with Rs 147 crore a year earlier.It posted a more than two-fold jump in the profit before tax at its railway division, while the construction equipment segment posted a multi-fold jump.
What should investors do?
Escorts’ first quarter results were a strong beat on consensus estimates across line items, highlighted by the 320 bps EBITDA margin expansion quarter-on-quarter on operating leverage in non-farm businesses, softer commodities and better realizations.
Emkay Global said while near-term tractor growth may be moderate, Escorts retains healthy prospects over the medium term on the back of planned portfolio and distribution actions in domestic tractors and increased exports.
The brokerage has a target price of Rs 3,020 per share, which is an upside of 6% from current levels.
(With data inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
