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Escorts Kubota falls after CLSA downgrades stock to 'sell'

The brokerage firm has cut earnings estimates by 24-26 percent over FY23-24 on a 7 percent lower volume forecast

August 02, 2022 / 03:01 PM IST
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Escorts Kubota share price fell more than 5 percent intraday on August 2 after the company's tractor sales declined in July.

Escorts Kubota said that its agri machinery segment sold 5,360 tractors in July 2022, down 18.3 percent from 6,564 units sold in July 2021. While domestic tractor sales declined 22.3 percent to 4,704 in July 2022, exports were up 28.9 percent to 656 units over July 2021.

Escorts Kubota reported a 28.1 percent fall in consolidated net profit to Rs 190.92 crore on a 15.7 percent decline in revenue from operations to Rs 1,878.51 crore in Q4 FY22 over Q4 FY21.

The company said in a regulatory filing that its profit for the quarter was impacted by lower operating profit. Inflation in commodity prices and the industry's shift towards lower horsepower segments adversely impacted operating profit.

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At 11.51 am, the stock was trading at Rs 1,630.70, down Rs 91.70, or 5.32 percent, on BSE. It touched an intraday high of Rs 1,658.95 and an intraday low of Rs 1,604.50.

The scrip was trading with volumes of 56,266 shares, compared to its five -day average of 16,523 shares, an increase of 240.54 percent.

Global research and broking firm CLSA has downgraded Escorts stock to "sell", with a revised target price of Rs 1,612. The brokerage house said the "big miss on margin led to a negative surprise", a CNBC-TV18 report said.

The brokerage firm has cut earnings estimates by 24-26 percent over FY23-24 on a 7 percent lower volume forecast and 400 bps cut in EBITDA margin.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​

Sandip Das
first published: Aug 2, 2022 12:12 pm

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