During the quarter ICRA upgraded the long term rating assigned to the bank facilities of Escorts. The rationale provided by ICRA was as follows:
- The improvement in the operational performance of Escorts driven by robust volume growth in its agri machinery division and recovery in construction equipment business in the current fiscal.
- Sustained improvement in cost structure, on the back of cost reduction exercise across various business segments. The company’s volume growth in the agri machinery business has been supported by favourable farm sentiments on account of healthier southwest monsoon and estimates of a likely strong growth in crop production.
Here are a few excerpts from an interview given by Bharat Madan, CFO, Escorts:
- At least for next three-four months looks like the momentum should sustain itself. The Rabi crop is expected, the harvesting will start and crop is expected to be well.
- June is pretty sure we are looking at the double digit growth of industry.
- We are probably at one of the lowest levels for quite some time now so we do not expect any issues really on the delay in inventory front.
- Improvement in our share of market in 41 to 50 HP category so beyond 50 HP there is still not really a major traction happening.
- Tamil Nadu, Karnataka had not done well which is why we are seeing the de-growth happening there. So, our growth so far has been about 23% and we expect that for the full year basis we should be able to maintain that growth.
- New launches – there are some products in the pipeline which will be coming up in the next six to eight months.
- FY17, we expect we maintain about 23% level growth for Escort. April to June, we still see it will be double-digit growth.
- We expect to do about 1000 plus numbers in exports
Escorts reported sales of 7,079 units in March, 2017 against 5,403 units during the same time last year resulting in a growth of 31%.
- Domestic Sales stood at 7,014 units against 5,327 units
- Exports stood at 65 units against 75 units a year ago.
Note: Sales numbers presented here are manufacturer reported sales numbers i.e. factory dispatches to dealerships. They are NOT retail sales figures to end customers.
Love it or hate it, do leave us with your reviews in the comment section below!