Escorts Kubota shares plunge after tractor maker trims industry volume guidance

Escorts Kubota shares plummeted on Friday, continuing to fall for the fourth session in a row, after the Haryana-based company projected a 6-7 per cent fall in industry volumes in the tractor segment for the current financial year. The Escorts Kubota stock weakened by as much as Rs 282.3, or 9.6 per cent, to Rs 2,647.5 apiece on BSE.

The guidance was in stark contrast to the company’s earlier projection of no change on a year-on-year basis, and suggested a fall of 12-13 per cent for the industry in the quarter ending March.  

The agricultural equipment maker also reported its financial results for the October-December period that were largely in line with analysts’ expectations. 

Escorts Kubota Q3 results

In the final 30 minutes of trade on Thursday, Escorts Kubota reported a 48.8 per cent year-on-year jump in standalone net profit to Rs 277.3 crore for the October-December period.

Its revenue grew 2.5 per cent to Rs 2,320.4 crore for the fiscal third quarter, according to a regulatory filing. 

According to Zee Business research, Escorts Kubota was estimated to register a quarterly net profit of Rs 272 crore and revenue of Rs 2,385 crore.   

Escorts Kubota’s margin, a key measure of profitability, stood at 13.5 per cent for the fiscal third quarter. Zee Business analysts had estimated the tractor maker’s margin for the period at 13.6 per cent.

What analysts say on Escorts Kubota after the tractor maker’s Q3 earnings 

CLSA maintained a ‘sell’ rating on Escorts Kubota after the agricultural machinery maker’s results but raised its target for the stock to Rs 2,013 from Rs 2,002.

The brokerage’s target implies a 31.3 per cent fall from the previous close. 

JPMorgan kept its ‘underweight’ call on Escorts Kubota but raised its target to Rs 1,935 per share from Rs 1,900 per share. 

Macquarie continued with its ‘neutral’ rating on Escorts Kubota with a target of Rs 2,960. 

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