- Operating Revenue: INR2,082.5 crores, down by 4.6% Y-o-Y for Q4 FY '24.
- Tractor Volume: 21,253 units, down by 14.2% Y-o-Y for Q4 FY '24.
- Construction Equipment Volume: 1,798 units, up by 17.7% Y-o-Y for Q4 FY '24.
- Railway Equipment Revenue: INR213.4 crores, down by 10.1% Y-o-Y for Q4 FY '24.
- EBITDA: INR265.9 crores, up by 12.8% Y-o-Y for Q4 FY '24.
- EBITDA Margin: 12.8%, up by 197 basis points Y-o-Y for Q4 FY '24.
- PBT Before Exceptional Item: INR323.7 crores, up by 19.3% Y-o-Y for Q4 FY '24.
- Net Profit: INR242.1 crores, up by 30.5% Y-o-Y for Q4 FY '24.
- Annual Operating Revenue: INR8,776.7 crores, up by 5.2% Y-o-Y for FY '24.
- Annual Tractor Volume: 95,858 units, down by 7.2% Y-o-Y for FY '24.
- Annual Construction Equipment Volume: 6,548 units, up by 41.7% Y-o-Y for FY '24.
- Annual Railway Equipment Revenue: INR950.4 crores, up by 12.9% Y-o-Y for FY '24.
- Annual EBITDA: INR1,168.8 crores, up by 49.8% Y-o-Y for FY '24.
- Annual EBITDA Margin: 13.3%, up by 396 basis points Y-o-Y for FY '24.
- Annual PBT Before Exceptional Item: INR1,389.8 crores, up by 54.0% Y-o-Y for FY '24.
- Annual Net Profit: INR1,037.2 crores, up by 70.9% Y-o-Y for FY '24.
- CapEx: INR175 crores for FY '24.
- Book Value Per Share: INR833.8 as of March 31, 2024.
- Net Cash and Investment: More than INR6,000 crores as of March 31, 2024.
- Final Dividend: 180%, i.e., INR18 per equity share for FY '24.
- Consolidated Turnover: INR8,849.6 crores, up by 5% Y-o-Y for FY '24.
- Consolidated EBITDA Margin: 13.2%, up from 9.2% Y-o-Y for FY '24.
- Consolidated Net Profit: INR1,049.1 crores, up by 64.8% Y-o-Y for FY '24.
- Domestic Tractor Market Share: Increased to 10.3% from 10.1% Y-o-Y for FY '24.
- Domestic Tractor Volume: 90,239 units, down by 5.3% Y-o-Y for FY '24.
- Export Tractor Volume: 5,619 units, down by 30% Y-o-Y for FY '24.
- Construction Equipment Segment Revenue: INR1,709.7 crores, up by 45% Y-o-Y for FY '24.
- Construction Equipment EBIT Margin: 9.3%, up by 640 basis points Y-o-Y for FY '24.
- Railway Division EBIT Margin: 18.9%, up by 510 basis points Y-o-Y for FY '24.
- Railway Division Order Book: Approximately INR950 crores as of March 31, 2024.
Release Date: May 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Escorts Kubota Ltd (BOM:500495, Financial) achieved its highest-ever operating revenue at INR8,776.7 crores, up by 5.2% Y-o-Y.
- The construction equipment division saw its highest-ever volume at 6,548 units, up 41.7% Y-o-Y.
- EBITDA for the year reached its highest-ever at INR1,168.8 crores, up by 49.8% Y-o-Y.
- The company reported its highest-ever net profit at INR1,037.2 crores, up by 70.9% Y-o-Y.
- The railway equipment division achieved its highest-ever yearly revenue at INR950.4 crores, up 12.9% Y-o-Y.
Negative Points
- Tractor volumes decreased by 7.2% Y-o-Y to 95,858 units.
- The domestic tractor industry saw a decline of 7.4% Y-o-Y.
- Export volumes for tractors decreased by 30% to 5,619 units.
- Operating revenue for Q4 FY '24 was down by 4.6% Y-o-Y.
- Railway equipment revenue for Q4 FY '24 decreased by 10.1% Y-o-Y.
Q & A Highlights
Q: Can you explain the significant increase in margins for the construction equipment division?
A: Bharat Madan, CFO: The margin increase is due to a combination of factors: industry growth driven by government infrastructure projects, softening commodity prices, and better realizations. The cost pressures from previous quarters have eased, and the market has absorbed the impact of emission changes.
Q: What gives you confidence in the second half growth for the tractor industry despite a subdued first half?
A: Neeraj Mehra, Chief Officer, Agri Machinery Business Division: The positive outlook on rainfall and monsoon forecasts gives us confidence. While the first quarter may be subdued, we expect industry pickup post-August/September.
Q: What are the plans for the new plant in Rajasthan, and will it affect the overall CapEx guidance?
A: Bharat Madan, CFO: We are still negotiating land acquisition and fiscal incentives with the state government. The project will be phased over four to five years, and the overall CapEx guidance remains around INR40 billion.
Q: Can you update on the progress of the NBFC setup and the current state of retail finance?
A: Bharat Madan, CFO: We have applied for an NBFC license and expect to receive it within this fiscal year. Neeraj Mehra, Chief Officer, Agri Machinery Business Division: Retail finance is comfortable, with no significant challenges expected going forward.
Q: What is the outlook for the construction equipment business, and how do you plan to improve market share?
A: Sanjeev Bajaj, Chief Executive, Construction Business: We expect short-term pressure due to elections and monsoons but anticipate demand to pick up post-monsoon. We are focusing on high-end segments and micro-marketing to improve market share.
Q: What are the reasons for the degrowth in the agri equipment industry?
A: Neeraj Mehra, Chief Officer, Agri Machinery Business Division: The primary reasons are erratic and deficient rainfall, lower reservoir levels, and slow commercial hauling and mining activities.
Q: How do you plan to leverage the synergies between Escorts and Kubota channels?
A: Neeraj Mehra, Chief Officer, Agri Machinery Business Division: We are exploring synergies between channels and products, focusing on geographical advantages to grow market share in both northern and southern regions.
Q: What is the current status and future outlook for the railway equipment business?
A: Ankur Dev, Chief Officer, Railway Equipment Business Division: Despite quarterly variations, we achieved double-digit growth for the year. We expect to maintain this growth trajectory with a stable EBIT margin.
Q: What is the potential for component exports to Kubota Global, and how will it impact revenue?
A: Bharat Madan, CFO: The potential is significant, especially with the China plus one strategy. We expect substantial growth in component exports as localization progresses, contributing significantly to revenue.
Q: What are the plans for the farm implement business, and how do you see its growth?
A: Bharat Madan, CFO: The farm implement business is growing, with a focus on expanding the product portfolio. We expect significant growth, especially with Kubota's strong presence in this segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
