India’s Escorts Kubota Reports Fall in Q4 Profit on Higher Expenses

Following the announcement of the financial results, shares of Escorts Kubota fell by 1.8%. In light of the performance, the company proposed a final dividend of 7 rupees per share. As per the exchange rate of $1 equalling 81.7800 Indian rupees, the financial figures mentioned in the article are denoted in Indian rupees.

Indian tractor manufacturer Escorts Kubota Ltd recorded a decline in its fourth-quarter profit, citing increased commodity prices and unseasonal rains in March as contributing factors. The company reported a net profit drop of 8.3% to 1.85 billion rupees ($22.6 million) for the quarter ending on March 31, as disclosed in an exchange filing.

This figure fell slightly short of analysts’ average expectations of 1.87 billion rupees, according to Refinitiv IBES. Escorts Kubota had previously experienced six consecutive quarters of profit decline, with a 28.1% decrease in the corresponding period of the previous year.

Despite the profit setback, the company saw a positive trend in revenue from operations, which rose by nearly 17% to 21.83 billion rupees. However, total expenses increased by 20.2% primarily due to a 37% surge in the cost of materials consumed. Furthermore, Escorts Kubota incurred an additional expense of 244 million rupees related to an impairment in its subsidiary, Escorts Crop Solutions, during the quarter.

Chairman and Managing Director Nikhil Nanda expressed optimism regarding future demand, stating, "With better crop prices, improved finance availability, and good water reservoir levels, we expect demand momentum to continue across geographies in the coming quarters." The company had experienced a decline in retail sales of tractors in March due to unseasonal rainfall and crop damage in certain regions, despite festive season demand, as reported in the previous month.

Also Read: Tractor Sales Report: Escorts Kubota April 2023 Tractor Sales Declined by 9.1 Percent

Following the announcement of the financial results, shares of Escorts Kubota fell by 1.8%. In light of the performance, the company proposed a final dividend of 7 rupees per share. As per the exchange rate of $1 equalling 81.7800 Indian rupees, the financial figures mentioned in the article are denoted in Indian rupees.

source-The Print

Also Read: Tractor Sales Report: Escorts Kubota March Tractor Sales Up By 2.3%