Numbers for Escorts Limited (Escorts) in Q4FY18 exceeded consensus estimate on PAT front, while they just met estimates at the revenue level. Standalone revenue in Q4FY18 was up 40% yoy at Rs1,436cr, in-line with consensus estimate. EBITDA was up 134% yoy at Rs174cr, lower than street estimate of Rs179cr. PAT came in at Rs113cr, up 89% yoy. This was slightly better than consensus estimate of Rs109cr.
Within segments, revenue of construction equipment (contributing 19% to total revenues) was up 45% yoy led by a 49% yoy volume growth. Company’s market share in construction industry was up 35bps sequentially to 8.6% vs. 8.35 in Q3FY18. Revenues for Agri-Machinery, which includes tractors were up 36% yoy, while tractor volumes were up 57% yoy. Railway order book grew 6% yoy to Rs350cr as on March 31, 2018. Revenue from the railway division was up 14% yoy.
EBIT margin improvement was seen across all segments – Agri Machinery (15% margin, expansion of 507bps yoy), Construction equipment (5% margin, expansion of 301bps yoy) and Railway equipments (16% margin, expansion of 509bps yoy).
During the quarter, Escorts made investment of Rs3.5cr in Escorts Securities Limited and Rs3.5cr in Escorts Crop Solutions Limited.
Debt metrics showed significant improvement. Total debt on books of the company reduced from Rs263cr as on March 31, 2017 to Rs50cr as on March 31, 2018. External credit rating was upgraded from A in FY17 to A+ in FY18.
Led by strong financial performance of the company, total institutional shareholding increased to 29.5% as on March 31, 2018 from 20.3% as on March 31, 2017.
The Board of Directors of the company declared a dividend of Rs2 per share for FY18 (vs. Rs1.50 per share for FY17).
Escorts Ltd is currently trading at Rs. 960.15, up by 2.1 points or 0.22% from its previous closing of Rs. 958.05 on the BSE.
The scrip opened at Rs. 968 and has touched a high and low of Rs. 970 and Rs. 948.80 respectively. So far 31,37,046 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.
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