Posted On - 17 May 2021
The company, led by Nikhil Nanda, chairman and managing director of Escorts, reported a 128 per cent year-on-year increase in net profit due to substantial growth in the tractor, construction equipment and railway machinery segments. Escorts Ltd. jumped more than two-fold in net profit for the March quarter, while revenue was boosted by solid sales of tractors and construction equipment.
The profit of the Faridabad-based company has increased by 123 per cent to Rs 285.40 crore in the three months ended March 31 from 128 crores a year ago. Total revenue from operations increased by 60.8 per cent to Rs 2,229 crore during the quarter. This was a 62 per cent jump in tractor sales to 32 thousand 588 units. Sales of construction equipment increased by 62.7 per cent to 1,604 units. Operating profit increased 88.9 per cent to Rs. 344 crore, while the reduction in operating margin cost increased 230 basis points to 15.4 per cent. But a sharp rise in the price of copper and steel increased input costs by 51.5 per cent during the quarter.
Nikhil Nanda, chairman and managing director of Escorts, said that the agricultural machinery industry accelerated Q4 of FY 2021 due to positive macro-economic factors and growth in demand from the first and second quarter of the year.
Escorts have done well in this segment by registering a higher market share in the fourth quarter than the average market share of the year. Escorts reported an increase of 84.77 per cent to Rs 871.63 crore in net profit for the financial year ended March 31, indicating a substantial recovery after unprecedented losses in the fiscal first quarter due to strict lockdown.
Revenue for the year increased by 18.73 per cent to Rs 7,014.42 crore after a 24 per cent increase in tractor sales. Nanda said the company saw some positive growth in the fourth quarter's construction equipment and railway equipment sector. Still, the second wave of transition could lead to a decline in these businesses going forward.
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