Escorts Kubota (ESCORTS) Q1 24/25 earnings summary

Executive summary

• Standalone operating revenue for Q1 FY25 was INR 2,292.5 crore, down 1.5% year-over-year, with consolidated revenue at INR 2,416.2 crore, slightly lower than last year.

• Net profit reached a record INR 289.6 crore (standalone), up 2.4% year-over-year; consolidated net profit was INR 293.1 crore, up 1.1%.

• EBITDA margin improved to 14.3% (standalone), up 22 bps year-over-year, driven by better product mix, price realization, cost control, and softer commodity prices.

• Agri Machinery remained the largest segment, contributing 73% of Q1 FY25 revenue.

• Board approved unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, with review by the Audit Committee and Board on August 1, 2024.

Financial highlights

• Standalone EBITDA was INR 327.1 crore, up 0.1% YoY and 23.0% QoQ; margin 14.3%.

• Standalone revenue from operations for Q1 FY25 was INR 2,292.54 crore, down from INR 2,327.74 crore in Q1 FY24 and up from INR 2,082.47 crore in Q4 FY24.

• PAT stood at INR 289.6 crore, up 2.4% YoY and 19.6% QoQ.

• Consolidated revenue was INR 2,310.0 crore, down 1.9% YoY; consolidated PAT was INR 293.1 crore, up 1.1% YoY.

• Basic EPS (standalone) for Q1 FY25 was INR 26.69, up 15.1% YoY.

Outlook and guidance

• Domestic tractor industry expected to grow mid-single digits (5-6%) in FY25, supported by positive rural sentiment, good monsoon, and government initiatives.

• Construction equipment demand anticipated to improve post-monsoon, with double-digit growth expected from October onwards.

• Export recovery expected towards year-end, especially in Europe; North America and Brazil entry dependent on new product development and greenfield facility, likely in 3-4 years.

• Second half of FY25 expected to be stronger due to seasonal factors and business integration.

• The company is awaiting regulatory approval for a Scheme of Amalgamation involving two subsidiaries, which has already received shareholder and creditor approval.