Escorts Kubota Ltd Management Discussions

Global Economy

Global economic growth remained resilient at 3.4% in 2025, supported by accommodative financial conditions, selective fiscal support, and strong technology-led investments, particularly in artificial intelligence. This resilience was achieved despite elevated uncertainty arising from shifting trade policies, geopolitical developments, and evolving macroeconomic conditions through the year.

Growth trends remained uneven across regions. The United States maintained relatively strong momentum, supported by domestic demand and productivity gains, while the Euro Area experienced subdued industrial activity and continued to face energy-related pressures. Chinas growth moderated amid structural adjustments and softer domestic demand, whereas emerging markets and developing economies demonstrated resilience, supported by stable financial conditions and adaptive policy responses. Overall, global activity remained steady, although the underlying momentum reflected a balance between supportive demand conditions and emerging structural headwinds.

Trade dynamics played a central role in shaping the macroeconomic environment. Elevated tariff measures, with effective rates in the United States remaining around 18-19%, contributed to persistent policy uncertainty and influenced global trade flows. While the immediate impact on growth remained contained, supported by front-loading of imports, supply chain diversification, and trade rerouting; the medium-term effects are becoming more visible. As supply chains realign and trade structures evolve, efficiency losses and gradual cost pass-through are emerging, contributing to a modest drag on productivity.

Inflation remained elevated but showed early signs of moderation, with global headline inflation estimated at 4.1% in 2025. While goods inflation began to firm up in certain economies, services inflation remained relatively sticky, and currency movements added complexity to price pass-through. As the year progressed, underlying pressures strengthened due to gradual cost transmission, labour market conditions in select regions, and persistent policy uncertainty.

Monetary policy settings began to ease selectively during the year, with central banks initiating measured rate reductions as inflation moderated, while maintaining a cautious stance. Policy actions remained data-dependent, with further easing contingent on sustained disinflation and well-anchored inflation expectations. Financial conditions remained broadly supportive, although the transmission of policy changes to credit and investment cycles continued to be gradual.

Commodity markets remained relatively stable through most of the year. While the global commodity environment remained relatively balanced during most of the year, emerging geopolitical developments began to reintroduce volatility into commodity prices, inflation expectations, and global supply chains.

Supply chains continued to recalibrate amid evolving trade dynamics and policy uncertainty. The initial disruption from higher tariffs was mitigated by the agility of the private sector through sourcing diversification, import front-loading, and trade reconfiguration. Over time, however, these adjustments are leading to structural inefficiencies, increasing operational complexity and input costs. The gradual pass-through of these costs is contributing to a more persistent inflationary bias while moderating productivity gains. At the same time, supply chain dynamics are increasingly influenced by technology investments, labour market shifts, and commodity price movements, creating a more complex operating environment.

The projected trajectory reflects continued divergence in global growth patterns, with advanced economies expected to experience relatively moderate expansion, while emerging markets maintain comparatively stronger, though gradually stabilising, growth momentum.

Looking ahead, the global economic environment remains subject to multiple risks. Trade policy uncertainty and elevated tariff levels continue to influence investment decisions and cross-border trade flows, while geopolitical tensions, particularly in energy-producing regions, may contribute to commodity price volatility and supply disruptions. In parallel, the gradual realignment of supply chains is expected to introduce structural inefficiencies, influencing cost structures and productivity over time. Additionally, climate-related factors, including evolving El Ni?o conditions, may impact agricultural output, food prices, and energy demand, particularly in climate-sensitive regions. These developments could add to inflation volatility and affect demand conditions across economies.

(Source: IMF World Economic Outlook)

Indian Economy

Amid a volatile global environment, the Indian economy remained among the fastest-growing major economies in FY 2025-26, with real GDP growth estimated at 7.6% compared to 7.1% in FY 2024-25. The growth was supported by robust domestic demand, sustained public capital expenditure, and a gradual recovery in private investment activity. The growth structure remains consumption-led, with private consumption accounting for a significant share of overall economic activity, supported by stable inflation, improving real incomes, and steady employment conditions.

Investment activity remained firm during the year. Gross Fixed Capital Formation recorded healthy growth, reflecting sustained investment momentum in infrastructure, manufacturing and allied sectors. Strong public capex has continued to play a catalytic role in crowding in private investment.

From a sectoral perspective, services continued to be the key growth driver, while manufacturing and construction recorded steady expansion supported by domestic demand recovery, policy support, and improving capacity utilisation. The agriculture sector remained stable, supported by favourable production conditions and healthy output levels, which in turn supported rural demand.

Financial sector stability remained supportive of economic activity, with healthy balance sheets and improved credit conditions aiding investment and consumption. Structural reforms, including supply-side measures, improved compliance, and production-linked incentives, continued to support manufacturing and formalisation of the economy.

[Source: PIB - MOSPI]

Inflation Dynamics

Inflation in India moderated significantly during FY 2025-26, with headline CPI inflation averaging around 2%-3% for most of the year, before settling at 3.4% in March 2026. Inflation remained significantly lower compared to previous years, supported by easing food and fuel prices during the first half of the fiscal year.

Food inflation showed a sharper correction during the year, turning negative in several months of FY 2025-26 due to strong agricultural output and improved supply conditions, before normalising towards year-end. By March 2026, food inflation had risen to around 3.9%, reflecting partial price recovery.

Overall, the inflation environment remained contained for most of the year, supporting real income stability and consumption demand, particularly in rural areas. The year witnessed a clear trend of low inflation in the first half followed by gradual normalisation towards the end of the fiscal year.

[Source: PIB - MOSPI]

Fiscal Position and Public Investment

The fiscal position remained stable during FY 2025-26, supported by strong revenue mobilisation and continued focus on capital expenditure. Goods and Services Tax (GST) collections remained robust, with gross collections at approximately _22.27 lakh crores, reflecting sustained expansion in formal economic activity and improving compliance.

A key policy development during the year was the rationalisation of GST rates on agriculture-related equipment, including tractors and farm machinery, with rates reduced from 12% to 5%, improving affordability and supporting mechanisation demand in rural areas.

Public capital expenditure remained elevated to support infrastructure development across roads, railways, logistics and rural connectivity.

[Source: PIB - Ministry of Agriculture & Farmers Welfare]

Sectoral Performance

Agriculture remained a stabilising force in the economy, supported by favourable monsoon conditions and healthy production levels. Rural demand conditions remained supported by stable output, improved price realisation in select crops, and sustained government support through income transfer schemes and rural infrastructure development.

The industrial sector demonstrated steady recovery during the year. Manufacturing activity strengthened on the back of improved domestic demand, better capacity utilisation, and easing input cost pressures. Construction activity remained robust, supported by continued government capital expenditure in roads, railways, energy, and urban infrastructure.

Mining and utilities sectors remained stable, ensuring consistent supply-side support to overall industrial growth. The production-linked incentive framework and infrastructure push continued to provide structural support to industrial expansion.

The services sector remained the dominant contributor to overall economic growth, driven by financial services, trade, transport, communications, and digital services. Strong performance in financial intermediation and business services, along with sustained expansion in technology-led services, reinforced Indias position as a global services hub.

The external sector remained resilient despite global volatility. Foreign exchange reserves remained at comfortable levels, providing strong import cover and reinforcing external stability.

[Source: RBI Minutes of Monetary Policy]

Outlook

Indias macroeconomic outlook remains resilient, supported by strong domestic demand, sustained investment activity, and stable inflation conditions. Growth is expected to moderate to around 6.9% in FY 2026-27, reflecting base normalisation and evolving global uncertainties, while remaining structurally supported by domestic consumption and investment activity. Inflation is expected gradually moving towards a more normalised range of around 4.4% in FY 2026-27, in line with medium-term targets.

The growth outlook continues to be underpinned by resilient household consumption, supported by stable inflation and improving real incomes, along with sustained public capital expenditure and gradual recovery in private investment cycles. Continued infrastructure spending and policy support for manufacturing are expected to provide medium-term growth visibility.

Industry Overview

Global Tractor Industry

The global tractor market represents a core segment of agricultural machinery, with tractors serving as essential equipment across land preparation, sowing, harvesting, and transport activities. The market continues to be structurally supported by rising mechanisation in agriculture and ongoing adoption of advanced farming technologies with IOT such as GPS-enabled systems, precision farming tools and telematics-based monitoring.

In 2025, the industry continued to reflect a steady demand environment, supported by sustained agricultural mechanisation across key regions. Demand remained particularly strong in Asia-Pacific, were large-scale agricultural activity and increasing adoption of mechanised farming practices continued to drive volumes. Mature markets such as North America and Europe were characterised by replacement-led demand and higher adoption of technology-enabled tractors.

A key structural characteristic of the industry remains its linkage with agricultural productivity requirements. With increasing emphasis on improving farm efficiency and reducing labour dependency, tractors continue to play a central role in modern farming systems globally.

The market is also increasingly shaped by product preferences, with utility tractors and mid-range horsepower segments (40-100 HP) forming a significant share of global demand, driven by their versatility across farming applications.

Outlook

The global agricultural tractor market was valued at USD 67.53 billion in 2025 and is projected to reach USD 105.54 billion by 2033, growing at a CAGR of 5.8% between 2026 and 2033. Growth is being driven by increasing farm mechanisation, expansion of commercial farming operations, and the need to enhance agricultural productivity and operational efficiency. Rising labour shortages and wage pressures across several regions are accelerating the shift from labour-intensive practices to mechanised farming. In parallel, the adoption of advanced technologies such as GPS guidance, automation systems, smart sensors, and precision farming tools is transforming tractor capabilities, enabling higher productivity, improved resource utilisation, and lower operating costs. As agriculture becomes increasingly commercialised and technology-driven, demand for modern, high-performance tractors is expected to remain strong across both developed and emerging markets.

Key Growth Drivers

Government Support and Subsidies

Government subsidies and policy support continue to drive agricultural machinery demand by improving affordability and accelerating mechanisation. In India, direct subsidies for farm equipment and rising distribution of subsidised machinery have supported tractor adoption, aided further by improving rural credit access. Globally, development financing support, including World Bank Group commitments to agriculture and food systems, is also strengthening investment in farm productivity and mechanisation.

Rising Need for Agricultural Productivity

The need to improve agricultural productivity to meet rising global food demand remains a key structural factor shaping the market. With increasing population pressures and declining arable land per capita, mechanisation has become essential to enhance yield efficiency and reduce dependence on manual labour.

Technology Integration in Farm Equipment

The adoption of precision agriculture technologies such as GPS guidance, telematics, IoT-based monitoring, and semi-autonomous operations is reshaping tractor functionality. This shift is improving efficiency, reducing input costs, and enhancing farm-level decision-making.

Shift Towards Sustainable and Fuel-efficient Solutions

Environmental regulations and increasing fuel efficiency concerns globally are driving interest in hybrid and electric tractors. Although still at an early stage, this segment is expected to gain relevance over the medium term.

Expansion of Non-agricultural Applications

Tractors are increasingly being deployed beyond agriculture, particularly in construction, infrastructure development, forestry and municipal services, adding a diversification layer to demand.

Indian Tractor Industry

India remains the largest tractor markets globally in terms of sales volume. Domestic tractor demand has remained strong, supported by the scale and structure of Indian farming and the continued need for productivity enhancement. The Indian tractor industry recorded a strong performance in FY 2025-26, with wholesale volumes reaching an all-time high and crossing the one-million-unit mark for the first time. The growth was supported by favourable monsoon conditions, improved rural liquidity, and sustained policy support to the agriculture sector, including reduction in GST on tractors and key farm inputs, which improved affordability.

Demand remained broad-based across regions, supported by higher farm cash flows, easy availability of financing, and continued mechanisation of agricultural operations. Replacement demand also contributed to volumes, aided by tractors entering the replacement cycle from earlier strong production years. In addition, increasing deployment of tractors in non-agricultural applications such as haulage and rural infrastructure activities supported incremental demand.

Structurally, the industry continues to benefit from rising mechanisation needs driven by labour shortages and the need to improve productivity. The market is witnessing a gradual shift towards higher horsepower tractors, alongside growing adoption of custom hiring models, which is improving access to mechanisation among small and marginal farmers.

Outlook

Indian Tractor Industry

The Indian tractor industry is expected to witness a phase of moderated growth in the near term following the exceptionally strong performance recorded in FY 2025-26. Demand fundamentals, however, remain structurally favourable, supported by increasing farm mechanisation, rising rural income levels, higher MSPs, improved access to financing, and continued government focus on strengthening the agricultural ecosystem. Softer interest rate expectations and sustained rural sentiment are also expected to support demand across key markets.

At the same time, evolving weather patterns, particularly emerging El Ni?o conditions, remain a key monitorable for the sector due to their potential impact on monsoon patterns, farm output, and rural cash flows. In addition, geopolitical developments, supply chain disruptions, currency volatility, and rising input costs may create short-term pressure on industry growth and farmer affordability. However, the long-term outlook for the Indian tractor industry remains positive, supported by low mechanisation penetration relative to global benchmarks and the increasing adoption of mechanised farming practices across agricultural and non-agricultural applications.

Agri Solutions Industry

The agri solutions industry in India, comprising farm implements and allied agricultural machinery, represents a_key component of the broader mechanisation ecosystem beyond tractors. The segment includes equipment such as rotavators, seed drills, super seeders, straw reapers, cultivators, and harvesting solutions, which are increasingly used across critical farming operations including land preparation, sowing, crop residue management, and harvesting.

Agricultural mechanisation in India continues to progress through policy support and structural interventions. Under the Sub-Mission on Agricultural Mechanisation, a cumulative 25,000+ Custom Hiring Centres (CHCs) have been established, improving access to farm machinery through shared and rental-based usage models and enhancing affordability for small and marginal farmers. This transition is supported by a broader improvement in agricultural productivity enablers. The Government has expanded seed availability and quality assurance systems through 6.85 lakh seed villages, while over 25.55 crores soil health cards have been issued to promote balanced nutrient management and improved farm output efficiency. These initiatives contribute to higher cropping intensity and increased requirement for mechanised farm operations across agricultural cycles.

Financial and institutional support has further strengthened the adoption environment. Agricultural credit flows reached _28.69 lakh crores in FY 2024-25, while PM-KISAN has cumulatively transferred over _4.09 lakh crores to more than 11 crores farmers, supporting rural liquidity and investment capacity in farm inputs and machinery.

At the structural level, India continues to demonstrate a transition towards higher irrigation intensity, with the gross irrigated area rising from 41.7% to 55.8% of gross cropped area, supporting multi-cropping patterns and increasing the demand for mechanised farm operations.

Outlook

Agri Solutions Industry

The outlook for the agri solutions industry remains structurally positive, supported by continued expansion of mechanisation access, rising cropping intensity, and increasing adoption of shared usage models through CHCs. Demand is expected to remain supported by ongoing improvements in agricultural productivity systems, institutional credit availability, and rural income support mechanisms.

In the near term, demand will continue to be influenced by monsoon performance, crop price realisation, and rural liquidity conditions, which typically result in cyclical variations. However, the medium-term trajectory remains anchored in structural drivers of mechanisation penetration and efficiency improvement across farming operations.

[Source: PIB - Ministry of Agriculture & Farmers Welfare, PIB - Ministry of Finance ]

Diesel Engine Industry

The Indian diesel engine industry continued to witness steady demand in FY 2025-26, supported by applications across construction, agriculture, industrial operations and backup power generation. Industry growth remained driven by infrastructure development, increasing mechanisation and continued demand for equipment-based power solutions across sectors. At the same time, the industry is undergoing a structural transition led by stricter emission norms, evolving efficiency requirements and improving fuel quality standards.

The implementation of tighter emission regulations has accelerated the adoption of advanced combustion technologies, electronic controls and fuel-efficient engine systems, while also increasing product development and compliance costs. The industry is also witnessing higher investments in technologies aimed at improving fuel economy, reliability and operational efficiency. However, rising input costs, elevated R&D expenditure and the gradual emergence of electric and hybrid alternatives in select applications continue to remain key challenges for the sector.

Outlook

Diesel Engine Industry

Looking ahead, the diesel engine industry in India is expected to grow moderately but consistently, supported by infrastructure and industrialisation, while being increasingly shaped by tighter regulations, energy transition policies, and the gradual diffusion of hybrid and electric technologies.

[Source: Renub Research]

Service & Spare Parts Industry

The service and spare parts ecosystem in the agricultural equipment industry is structurally driven by the expanding base and utilisation intensity of farm machinery in India. Demand in this segment is inherently recurring in nature and arises from the need for regular maintenance, replacement of wear-and-tear components, and ensuring operational reliability of equipment used across agricultural cycles. Higher utilisation of agricultural machinery across land preparation, sowing, harvesting and allied activities naturally leads to greater wear and tear of components, thereby driving recurring demand for spare parts, lubricants and maintenance services. The cyclical nature of agricultural operations further reinforces periodic service requirements, particularly during peak sowing and harvesting seasons.

The segment continues to remain fragmented, with a mix of OEM-backed authorised service networks and a wide base of independent local service providers. However, increasing equipment sophistication, greater focus on machine uptime, and rising preference for reliability and performance consistency are gradually supporting a shift towards more organised and OEM-led service ecosystems.

Outlook

Spare Parts & Service Industry

The outlook for the spare parts and service industry in FY 2026-27 remains stable, supported by the expanding installed base of agricultural equipment, increasing machine utilisation, stable rural income and credit conditions, and the gradual formalisation of service and maintenance networks. In addition, the rising technological complexity of farm machinery is expected to drive greater demand for OEM-grade servicing and genuine spare parts. However, near-term demand patterns may remain influenced by fluctuations in farm income, monsoon outcomes, and input cost cycles.

[Source: PIB - Ministry of Finance, Economic Survey]

EKL Business Overview

Agri Machinery Products Segment

The Agri Machinery Products segment is the core operating and revenue engine of Escorts Kubota Limited. This business provides a comprehensive ecosystem that supports mechanisation across the entire farm value chain from land preparation and sowing to harvesting, post harvest operations, and allied power solutions. In FY 2025-26, the segment continued to demonstrate structural resilience and growth, driven by a confluence of favourable agrarian conditions, policy support, and rising mechanisation intensity in Indian agriculture, while simultaneously expanding its footprint beyond tractors into implements, diesel engines, and organised after market services.

At the strategic level, the segment is structured around two broad sub segments:

Tractor Business

Forms the traditional backbone of the Companys agri machinery portfolio.

Non-Tractor Business

Comprising Agri Solutions, Engine business, and Service & Spare Parts, which together are being positioned as a key growth pillar to diversify the segments revenue mix and reduce dependence on pure tractor cycle volatility.

EKL Tractor Business

The Tractor Business Division was the largest contributor to the Agri Machinery segment during FY 2025-26, operating in a broadly stable market that remained increasingly differentiated across regions and product segments. The business demonstrated robust volume growth, supported by strong domestic demand and an expanding export footprint, even as the Company managed input cost and margin pressures through product mix optimisation and operational efficiency.

Volumes and Market Position

- Total tractor sales reached 1,33,670 units in FY 2025-26, an increase of 15.7% YoY over 1,15,554 units in FY 2024-25.

- Domestic sales accounted for 1,26,994 units (up 14.9% YoY), reflecting healthy demand across multiple geographies, supported by favourable monsoon conditions, higher water availability, and improving rural credit access.

- Exports grew sharply by 33.8% YoY to around 6,676 units, signalling an expanding international presence under the Farmtrac, Powertrac, and Kubota brands, particularly in South Asia, Africa, and select CIS markets.

Particulars	FY 2024-25	FY 2025-26
(in Nos.)
EKL Total Tractor	1,15,554	1,33,670
Sales
Domestic Sales	1,10,563	1,26,994
Export Sales	4,991	6,676
Industry Domestic	9.40 lakh	11.60 lakh
Volume

[Source: Company disclosures; TMA]

Product Mix and Segmentation

- The product portfolio spans light, utility, and mid-range tractors across key horsepower categories, aligned with industry demand trends where the above 40 HP segment contributed nearly 66% of total tractor sales in FY 2025-26, driven primarily by the 41-50 HP category.

- The company has focused on technology enabled tractors, including models with improved fuel efficiency, higher drawbar pull, and enhanced operator comfort, which helped capture share in the mid-range and higher horsepower segments.

Key Drivers

- Favourable monsoon and farm income conditions improved cropping intensity and investment appetite for mechanisation.

- Policy support and GST-related benefits on tractors and farm inputs enhanced affordability, while easy financing and strong dealer network performance improved distribution effectiveness.

- Replacement cycle demand also contributed, as tractors sold in earlier high-demand years entered their typical replacement window, supporting incremental wholesale volumes.

Challenges

- The business remains cyclical and sensitive to monsoon patterns, farm income volatility, and input cost fluctuations.

- Intense competition in the tractor segment, both domestic and global, requires continuous investment in technology, branding, and financing incentives to maintain volume leadership and margin stability.

Products and New Launches

The Tractor Business continued to operate through its multi-brand portfolio comprising Kubota, Farmtrac and Powertrac tractors, catering to a broad spectrum of customer requirements-ranging from small landholding farmers to large-scale commercial agricultural operators.

During FY 2025-26, the product strategy focused on making existing platforms more efficient, durable and versatile, rather than adding new products. Engineering integration with Kubota remained a key enabler in enhancing product quality, particularly in terms of fuel efficiency, transmission optimisation and operator ergonomics.

The Farmtrac Promaxx series remained a major contributor in the 30-50 HP category, which continues to represent the most structurally significant segment of the Indian tractor market. This range has gained traction in both agricultural and non-agricultural applications, especially in regions where mechanisation intensity is higher and tractors are deployed across multi-purpose usage cycles.

Expanding our Product Range through New Launches

During FY 2025-26, a series of product launches was undertaken across different tractor series to strengthen the overall portfolio and address diverse application needs.

The Shaurya series under Powertrac 1. was introduced in the 39-52 HP range, developed for wetland and paddy applications in southern markets, overall portfolio and address diverse application needs.

The MU 4201 tractor under Kubota 2. technology was also added, integrating Japanese engineering to improve efficiency, reliability, and productivity for Indian agricultural conditions.

3. ^{The Farmtrac PROMAXX series was}launched in the 31-50 HP segment in FY 2024-25, enhancing performance, comfort, and versatility across multiple farming applications.

Outlook

Tractor Business

The outlook for the Tractor Business Division remains positive, supported by continued product interventions, channel strengthening initiatives and sustained market development efforts. Escorts Kubota has undertaken multiple product launches across brands, with additional launches and product upgrades planned over the coming quarters. The Company has also strengthened channel development, retail conversion and market responsiveness across regions, while addressing key product gaps, including the introduction of paddy-special tractors for southern markets.

These initiatives are expected to support gradual market share improvement and strengthen growth prospects despite a relatively stable industry outlook for FY 2026-27, with industry growth expected to remain broadly flattish within a range of around (-2%) to (+2%). While geopolitical developments, supply chain disruptions, input cost pressures and evolving weather patterns, including emerging El Ni?o conditions, remain key challenges, the Company continues to focus on product innovation, localisation and agri mechanisation solutions to strengthen long-term competitiveness.

Non-Tractor Business

In FY 2025-26, the Non-tractor vertical-comprising Agri Solutions, the Engine business, and Service & Spare Parts contributed approximately 20% to the Agri Machinery segment. Despite its relatively smaller share, it holds significant strategic importance.

Agri Solutions Business

The Agri Solutions business is focused on implements and allied machinery that extend the utility of the tractor platform across the farm value chain. The segment offers a broad portfolio of rotavators, harvesters, sprayers, rice transplanters, bailers, loader backhoes, and other special purpose machines under the Farmpower and Kubota brands, supporting operations from land preparation to sowing, spraying, harvesting, and post-harvest material handling.

EKLs Product Range

The Agri Solutions portfolio covers a wide range of farm mechanisation equipment required across key stages of farming, including rotavators, seed drills, MB ploughs, straw reapers, super seeders, rice transplanters, and harvesting solutions.

Rotavators	Straw Reaper + Super
Rotary tillage implements	Seeder + MB Plough
with multi-blade	Integrated implement set
rotors for efficient soil	for stubble management,
pulverisation across diverse	zero till sowing, and primary
field conditions.	tillage in residue-eco
	friendly-field operations.
KNP-6W 6-row	MistTrac 600 Tractor
Walk-Behind Model	60 HP-class utility tractor
6-row walk-behind	with advanced fuel
planter-cum-cultivator for	efficiency, high torque, and
precise row-spacing and	digital ready architecture for
reduced manual labour in	farm and non-farm use.
small-farm operations.
KA6 6-row Model	Trailed Orchard Sprayer
6-row tractor mounted	Trailed boom-type sprayer
planter with adjustable row	with high-capacity tank and
width and depth control for	adjustable boom for precise
high throughput sowing of	pesticide and nutrient
cereals and legumes.	application in orchards.
Paddy Harvester Ride-on	Rice transplanters
Model	Mechanical rice
Ride-on paddy harvester	transplanters ensuring
combining cutting,	uniform plant spacing and
threshing, and grain	depth for improved yield
collection in a single	and labour efficiency over
pass with operator	manual transplanting.
comfort features.

New Launches

During FY 2025-26, product innovation was focused on improving field efficiency, reducing operational time and enhancing compatibility across diverse soil and cropping conditions. Closer alignment with Kubotas global platforms further strengthened reliability, durability, and performance consistency.

Within the Agri Solutions business, 1. we expanded the portfolio with the launch of the PRO588i-G combine harvester, enhancing harvesting efficiency and grain quality through advanced technology.

We further strengthened the offering 2. with the introduction of KA6 and KA8 rice transplanters, improving precision planting, operational efficiency, and ease of use in paddy applications.

A notable trend during the year was the increasing preference for multi-utility and higher productivity implements, reflecting the growing complexity of crop cycles and increasing emphasis on time-sensitive farming operations.

Outlook

Agri Solutions Business

Looking ahead, growth in the Agri Solutions Business will be driven by rising implement-tractor ratios, expanding coverage of technology-enabled implements (including precision-seeding and residue-management solutions) and targeted expansion into high-value-crop and orchard related applications, such as trailed orchard sprayers and specialised tillage and harvesting tools. The Company also expects to benefit from continued government-backed mechanisation schemes, improved access through Custom Hiring Centres, and a growing preference for complete mechanisation packages over standalone tractor purchases, which should support both volume growth and value-per-tractor in the Agri Solutions portfolio.

Engine Business

The Engine business forms part of the Companys broader Agri Machinery Products Segment, catering to internal requirements as well as select OEM applications across agriculture, construction equipment and power generation segments. The business primarily supplies diesel engines for genset applications, compact construction equipment, material handling equipment and allied machinery platforms.

During FY 2025-26, the business benefited from continued infrastructure activity, stable demand from equipment-led applications and ongoing transition toward tighter emission-compliant technologies. Demand was supported by replacement requirements in backup power solutions, construction-linked equipment usage and continued mechanisation across end-use sectors. The business also remained focused on improving fuel efficiency, reliability and compliance with evolving emission standards.

Outlook

Engine Business

The outlook for the Engine business remains steady, supported by continued infrastructure development, increasing equipment usage across agriculture and construction-related applications, and stable demand for backup power solutions. Growth is expected to be driven by ongoing transition toward emission-compliant engines, improving equipment utilisation and continued demand from OEM partners. However, input cost volatility, evolving regulatory requirements and gradual adoption of alternative technologies in select applications may continue to influence the operating environment over the medium term.

Service & Spare Parts

The Service & Spare Parts business is an inherently recurring and utilisation-driven component of the companys after-market ecosystem, supported by the installed base of tractors, implements, engines and allied equipment.

Product Range

The division continues to offer a comprehensive range of OEM-certified spare parts and service solutions, such as tractors, engines and farm equipment systems.

Category	Components/Solutions
Engine Systems	Filters, pumps, engine assemblies
Transmission &	Gear parts, clutch systems
Powertrain
Hydraulics	Hydraulic pumps, cylinders
Consumables	Lubricants, oils, service kits
Aftermarket	Genuine spare parts, service kits,
Solutions	maintenance packages

During FY 2025-26, the Company focused on strengthening the availability of spare parts in rural markets, improving service turnaround time and enhancing customer engagement through a more structured service ecosystem. The transition towards organised OEM-led servicing has continued to gain momentum as farmers increasingly prioritise reliability, uptime assurance and durability.

The Company has been expanding its authorised service centre network and enhancing spare parts logistics, with plans to establish a consolidated spares warehouse to improve stock availability, reduce lead-times, and strengthen the efficiency of the after-market supply chain. Short-term demand remains linked to monsoon-linked agricultural activity, farm income cycles, and periodic maintenance requirements, while the medium-term outlook is supported by the expanding tractor and implement base, higher utilisation of machinery, and the companys focus on organised, OEM-delivered service and genuine spare parts distribution.

Outlook

Service & Spare Parts

The outlook for the Service and Spare Parts Business remains stable and structurally positive, supported by an expansion in the installed equipment base, rising utilisation intensity, and increasing complexity of modern agricultural machinery requiring specialised maintenance solutions.

SCOT Analysis - Agri-Machinery Business

	Strengths		Opportunities
Heritage and Brand Equity	Over eight decades of presence in agri and construction machinery have built strong farmer and dealer trust, reinforcing Escorts Kubota as a leading domestic OEM and preferred supplier of reliable, high-uptime equipment.	Expanding Global Footprint for Agri Machinery Government backed	With Kubota backing and an improving product mix, the Company has scope to expand overseas sales of tractors, implements, and agri- linked engine solutions into emerging market geographies. Ongoing government schemes for
Strong Global Ecosystem Support	Integration with Kubotas global eco- system enhances technology access, manufacturing capabilities, supply chain efficiencies, and market reach.	Agri-Mechanisation and Infrastructure Push	mechanisation, custom hiring centres, and large scale infrastructure projects support sustainable demand for trac- tors, implements, and agri-linked engines.
Broad Distribution and Service Network	A well-established dealer cum service network enables deep rural pen-	Technology-led and	By investing in precision
	etration and efficient after market support, improving accessibility and uptime for farmers and contractors.	Digital-Ready Agri Machinery	enablement, telematics, and digital-service platforms, the Company can improve tractor and implement utilisation, uptime, and after market
Integrated Product Ecosystem	The Companys integrated offering of tractors, implements, engines, and service and spare parts strengthens value capture across the farm-value chain and supports higher lifetime value per customer.	Non-Tractor Growth within Agri Machinery	value capture. The Agri Solutions, Engine business, and Service & Spare Parts divisions offer a meaningful path to diversify Agri Machinery revenue beyond trac- tors, helping to stabilise earnings over the cycle.
Management Execution	The ability to manage supply chain complexity, regulatory compliance cycles, and seasonal demand has helped sustain production and meet market requirements without major disruption.	Rising Rural and Semi urban Affluence	Improving farm income visibility and greater access to formal credit are likely to support demand for higher horsepower and feature-rich machinery across agri and allied applications.
	Challenges		Threats
Policy and Subsidy Uncertainties	Shifts in agricultural subsidy designed infrastructure-incentive structures can create short term uncertainty and in- fluence demand timing and intensity.	Intensifying Price based Competition	Competitive responses focused on promotions, financing incentives, and bundled-product deals may compress margins even as overall volumes grow.
Supply Chain and Input-Cost Volatility	Dependence on critical raw materials and imported components, along with global supply chain headwinds, can strain cost management and pressure margins.	Monsoon and Climate-related Risks	Erratic rainfall patterns and extreme weather events can disrupt cropping cycles, affect farm-incomes, and delay tractor and implement purchases in key seasons.
Intensifying Domestic Competition	The agri-machinery and implement space remains highly competitive, with both global OEMs and regional players increasing product-mix and fi- nance oriented offers, leading to price sensitivity and margin pressure.	Geopolitical and Trade-level Disruptions	Evolving trade-regime dynamics and regional tensions can impact component-supply flows and overseas-market-access conditions, affecting both imported content and export-oriented growth.
Regulatory and Emission Compliance Burden	The ongoing shift to tighter emission and safety norms (e.g., TREM-V) requires continuous R&D and product life cycle investments, raising development and validation costs.

Construction Equipment Industry Overview

The Indian construction equipment industry witnessed a year of moderation in FY 2025-26 following the exceptionally strong performance recorded in FY 2024-25, which had benefited from pre-buying activity ahead of the transition to revised emission norms. Industry performance during the year was impacted by extended monsoon conditions, slower project mobilisation during the first half, and broader demand normalisation after the sharp growth witnessed in the previous year.

As a result, the served industry across cranes, backhoe loaders, mini excavators, and compactors declined by approximately 7% year-on-year. The decline was primarily led by a 13% reduction in crane volumes and 10% decline in backhoe loader volumes, while mini excavators and compactors continued to demonstrate resilience, recording growth of 38% and 5%, respectively.

Outlook

Construction Equipment Industry

Despite near-term moderation, the long-term outlook for the industry remains favourable, supported by sustained government focus on infrastructure development, urbanisation, mining activity, industrial expansion, and logistics infrastructure. Increasing emphasis on faster project execution, advanced construction technologies, and mechanisation is expected to support medium-term demand across key equipment categories. The mini excavator segment is expected to witness strong long-term growth, with industry size projected to increase nearly threefold by 2030.

At the same time, geopolitical developments and supply chain disruptions continue to remain key monitorable for the sector. Volatility in commodity prices, particularly base metals such as steel, copper, aluminium, and magnesium, along with rising energy and processing costs, may continue to exert pressure on input costs and project economics in the near term. Nevertheless, improving infrastructure visibility and continued public capital expenditure are expected to support long-term industry fundamentals.

Construction Equipment Business Segment

The Construction Equipment (CE) Business of Escorts Kubota Limited plays an important role in its diversified portfolio, contributing to Indias infrastructure development through a range of backhoe loaders, cranes, compactors, and material handling solutions under the E-Kubota brand. The business operates from its manufacturing facility at Faridabad, Haryana, which is equipped with multi-shift production capability and is equipped to deliver products aligned with evolving emission and performance standards. The past year saw the construction equipment industry undergo a transition phase shaped by regulatory change and cyclical demand moderation, particularly due to the implementation of CEV Stage V emission norms. The shift led to temporary pricing adjustments across the industry, influencing near-term retail demand as customers adjusted to higher acquisition costs and OEMs realigned inventory levels across dealer channels.

At the same time, infrastructure execution activity remained strong, supported by sustained government capital expenditure across roads, railways, urban infrastructure and logistics development. However, the conversion of demand into equipment sales remained gradual, as purchases were aligned with project execution timelines and impacted by channel inventory adjustments after the transition to new emission standards.

Performance Overview

During FY 2025-26, Escorts Kubota Limiteds Construction Equipment business operated in a relatively subdued industry environment while maintaining focus on operational discipline, product development, and long-term competitiveness. The business recorded sales volume of 5,794 machines during the year, reflecting a decline of 10.6% year-on-year amid softer industry demand and delayed project activity during the first half of the year. As market conditions gradually stabilised, industry demand improved sequentially during the latter part of the year. Looking ahead, the business remains focused on improving operational efficiencies, strengthening market competitiveness, expanding product offerings, and leveraging long-term infrastructure opportunities, while closely monitoring commodity inflation, geopolitical developments, and supply chain risks.

Product Portfolio and Developments

The Construction Equipment Business offers a comprehensive portfolio comprising backhoe loaders, cranes, compactors, and related material handling equipment under the E-Kubota brand. The portfolio caters to diverse infrastructure applications, ranging from road construction and earthmoving to urban infrastructure development.

The Company continued to strengthen its product portfolio during the year with the introduction of the Kubota U22-3 mini excavator for urban and confined-space applications. In addition, the Company showcased the Hydra 12 mining crane, BLX75 backhoe loader, and the Hydra 72 crane

Outlook

Construction Equipment Business

Looking ahead, the business remains focused on improving operational efficiencies, strengthening market competitiveness, expanding product offerings, and leveraging long-term infrastructure opportunities, while closely monitoring commodity inflation, geopolitical developments, and supply chain risks.

concept featuring a 72-foot boom and enhanced safety systems, reinforcing its continued focus on engineering innovation and portfolio expansion.

The Company also strengthened its position in strategic product categories during the year, maintaining leadership in the mini excavator segment while gaining market share in cranes. Export presence continued to expand across Africa, Southeast Asia, and SAARC markets, with exports increasing from nearly 3-3.5% of segment revenue earlier to approximately 5-6%, with the Company targeting further growth over the medium term.

SCOT Analysis - Construction Equipment Business

	Strengths		Opportunities
Affordable and Skilled Labour Availability	The industry benefits from a relatively large pool of affordable and increasingly skilled labour, supported by ongoing training and upskilling initiatives, which helps OEMs and contractors manage workforce cost pressures and meet growing project execution requirements.	Improved Financial Assistance and Credit-Easing	Government backed credit-enhancement schemes, infrastructure finance frameworks, and easier access to project finance are helping contractors and developers better manage working-capital and capital expenditure cycles, supporting more stable equipment demand.
Government Incentives & NIP-led Infrastructure Push	The National Infrastructure Pipeline (NIP) and continued government CAPEX in roads, railways, urban infrastructure, housing, and logistics are underpinning long-term demand for construction equipment, providing a stable macro backdrop for the CE sector.	Renewable Energy and Green Infrastructure Expansion PLI like and	Massive investments in renewable energy projects (solar, wind, transmission corridors) are driving demand for specialised earthmoving, compaction, and material-handling equipment, particularly in remote and under developed terrain. Production-Linked and infrastructure-
Abundant Natural Resources & Raw-Material Access	Indias access to key raw materials and compo- nents, coupled with a growing domestic manu- facturing ecosystem, supports cost efficient and timely production of construction equipment, including earthmoving and road construction machinery.	Infrastructure -linked Manufacturing Incentives	linked schemes are encouraging domestic manufacturing, technology-upgrades, and export expansion, which support the CE sectors shift toward higher-value, more complex equipment platforms.
Robust R&D and Technology- Upskilling	The CE industry has been investing in R&D and product engineering, particularly to meet CEV Stage V emission standards, improve fuel efficiency, and introduce telematics and digital service platforms, which enhance product	Rising Private and Public Investments in Infrastructure	Increased participation from both domestic and foreign investors in highways, logistics parks, metros, and industrial corridors is expanding the project pipeline, thereby sustaining mid-to-long term demand for construction equipment.
	quality and customer value perception.	Education and Healthcare -Related Infrastructure Push	Government-led expansion of schools, universities, hospitals, and medical infrastructure projects is driving incremental demand for urban scale and compact construction equipment, including mini excavators and specialised cranes.
	Challenges		Threats
Rising Labour and Input-Cost Pressure	Increasing demand for skilled labour, alongside volatile input costs and component price inflation, is putting pressure on project cost structures and OEM margins, even as social-stability-linked wage-norms rise.	Demand-Side Cyclical Volatility	Demand for CE remains closely tied to project-execution and credit-cycle-linked triggers, so any slowdown in capex, delays in awarding projects, or fiscal-policy-shifts can lead to sudden demand-dips and inventory-overhangs.
High Capital Intensity and Project-Cycle Risk	Large-scale infrastructure projects require significant upfront capital, and any delays in project award, execution, or financing can lead to cyclical demand dips and inventory overhangs for CE OEMs.	Intensifying Price- based Competition and Capacity- Addition Pressure	The sector has seen entry and expansion of both domestic and global OEMs, leading to aggressive pricing, higher discounting, and the need to add new production capacity, which can compress margins and capital-efficiency.
		Geopolitical and	Dependence on certain regions for critical
Regulatory and Transition-Related Uncertainty	The rollout of CEV Stage V norms, along with evolving safety and emission related requirements, has increased compliance costs and project timeline uncertainty, requiring continuous product life cycle and validation investments from OEMs.	Supply-Chain Disruptions Environmental and	components and inputs, along with evolving trade-regime dynamics, can disrupt supply-flows, increase landed-costs, and affect both domestic-production and export-performance. Growing focus on sustainability and emission
		Climate-Linked Regulatory Risks	compliance may accelerate the shift toward hybrid and alternative fuel-based equipment, pressuring OEMs with legacy platform heavy portfolios to invest early in new-propulsion- technology platforms.

Human Resources

As of March 31, 2026, Escorts Kubota Limited had a workforce of 15,897 employees across permanent, fixed term, and contractual roles. The year witnessed a continued phase of organisational integration following the merger of legacy entities, with a focused effort on building a cohesive workforce aligned to One EKL philosophy. This integration has enabled the Company to leverage diverse capabilities, strengthen cross-functional collaboration and align human capital with a shared strategic vision. This transition has been supported by an enhanced Human Resources framework, with a strong emphasis on capability building, leadership development and employee engagement. The Company, during the year, further continued to advance a high-performance and learning-oriented culture through structured interventions in training, skill enhancement and functional excellence. Talent development programmes were progressively aligned to address and incorporate evolving technological requirements across manufacturing, engineering and customer-facing functions. Employee well-being continued to remain a key priority, with sustained efforts aimed at promoting workplace safety, inclusion and long-term engagement. The Company remains committed to fostering a work environment that is agile, performance-driven and aligned with its broader long term innovation and sustainability objectives.

Community Engagement and CSR

As a responsible corporate citizen, Escorts Kubota continues to consider community engagement an integral part of its long-term value creation strategy. During FY 2025-26, the Company advanced its CSR initiatives with focused interventions in healthcare, education, skill development and environmental sustainability. These initiatives aim to make a tangible difference in the communities where the Company operates, while also contributing to broader socio-economic development.

A detailed overview of these initiatives is presented in the CSR section of the Integrated Annual Report.

Investor Relations

Escorts Kubota maintains open dialogue and provides top-tier investor services that align with industry standards. With investor relations desks in both India and Japan, the Company ensures that communication with its investor community is effective and insightful. Under the guidance of the Chairman & Managing Director, Deputy Managing Director, Whole-time Director and Chief Financial Officer and the Investor Relations Team, global investors engage meaningfully with the Company.

To help investors make well-informed decisions, Escorts Kubota makes critical company information readily available on stock exchanges and its official website, www.escortskubota.com. The Investor Information section serves as a comprehensive hub, offering shareholders access to director profiles, shareholding patterns, financial reports, press updates and unclaimed dividend details. Interactive earnings calls, along with transcripts and audio recordings, are also made available for convenient access. The Company prioritises timely communication by promptly sharing important developments with stock exchanges and updating its website with any information that could impact quarterly earnings or revenue. Investors can access a wide range of information, including regulatory filings, quarterly reports, investor presentations, and details of scheduled analyst interactions. A shareholder handbook addressing frequently asked questions is available in the Governance section, along with regular updates on unpaid dividends. For queries or feedback, please write to investor.relation@escortskubota.com

Information Technology

Strengthening the Digital Core. Advancing Intelligent Enterprise Capabilities

During FY 2025-26, Escorts Kubota Limited (EKL) continued to strengthen its digital foundation with a focus on enterprise stability, scalability, security, and long term value creation. Building on the transformation milestones achieved in the previous year, IT initiatives were directed towards consolidating gains, improving governance, and supporting sustained business performance.

A key priority during the year was enhancing operational resilience. Core enterprise platforms across ERP, manufacturing, supply chain, sales and dealer systems were further stabilised and optimised to support scale, performance and audit readiness. The unified IT landscape across EKL, EKI, KAI and group entities enabled improved data integrity, transparency and consistency across operations.

Cybersecurity and digital risk management remained a strong focus area. Security controls, monitoring frameworks and access governance were meaningfully strengthened across networks, applications and endpoints, reinforcing business continuity and safeguarding sensitive information in line with global security and compliance standards. FY 2025-26 also saw continued progress in data, analytics and automation. Enhancements to enterprise reporting, forecasting and operational analytics improved decision support across functions. Select process automation and intelligent workflows reduced manual effort, improved accuracy and accelerated turnaround times. Foundational work was undertaken to enable a structured and responsible adoption of advanced analytics and artificial intelligence, with a clear focus on governance and business value.

The dealer and customer ecosystem remained a key area of engagement. Upgrades to the Dealer Management System and connected digital platforms supported improved dealer collaboration, service effectiveness and data-driven decision-making across sales and after-sales operations. In parallel, IT governance, delivery discipline and cost optimisation were further strengthened. Improved prioritisation, vendor rationalisation and standardised delivery frameworks enhanced alignment between technology investments and business objectives, while improving predictability and returns.

At the infrastructure level, continued investments were made to enhance network performance, system availability and disaster recovery readiness across plants, offices and subsidiaries, ensuring reliable and secure digital operations. Overall, FY 2025-26 IT initiatives reflect EKLs continued commitment to building a secure, resilient and future ready digital enterprise. The technology roadmap remains closely aligned with the Companys strategic priorities, supporting operational excellence, innovation and sustainable long-term value creation.

Internal Control Systems

The Companys robust internal control framework monitors operations, safeguards assets, prevents fraud, maintains accurate accounting controls, ensures compliance with applicable laws and regulations, and promotes overall productivity.

The Company upholds high standards of corporate governance, with internal audits conducted by both the in-house internal audit team and independent auditors, including Ernst & Young (EY). These audits, along with regular management reviews, are overseen by the Audit Committee to ensure that transactions are properly recorded and that operational efficiency is not compromised.

The internal control system is further strengthened by well-defined policies and procedures that reinforce accountability, transparency, and reliability in financial reporting. This diligent approach not only safeguards the Companys assets and financial integrity but also enhances stakeholder trust.

Risk Management

The Company has established a robust risk management framework to effectively identify, assess, monitor and mitigate potential risks that could impact its operations. A dedicated Risk Management Committee is in place, which, in collaboration with the senior management, prioritises key risks based on their severity and likelihood and develops appropriate mitigation strategies. The Company risk management framework facilitates early identification and resolution of potential risks through regular assessments and a probability-based methodology, ensuring stability in business operations.

At the Board level, EKL has implemented a comprehensive Risk Management Policy that enables the proactive identification and mitigation of key risks. By evaluating risks based on their likelihood, the Company is able to devise effective mitigation strategies in advance, navigating uncertainties with greater confidence and agility.

Strong governance practices provide an additional layer of resilience, enabling the Company to effectively manage financial, operational, and strategic risks.

For more information, refer to the Risk section of the Integrated Annual Report on Page 86.

Discussion on Financial Performance with Respect to Operational Performance (FY 2025-26)

During FY 2025-26, Escorts Kubota Limited delivered a steady operating performance, supported by stable demand across its core agricultural and construction equipment businesses. Continued emphasis on cost discipline, operational efficiencies, and benefits derived from ongoing integration initiatives contributed positively to overall performance. The year also reflected improved clarity in the Companys business structure following the resolution of earlier amalgamation-related impacts, allowing sharper managerial focus on its primary operating segments.

On October 23, 2024, the Board of Directors approved the sale/transfer of the division engaged in the manufacturing, assembly, sales, servicing, research, and development of railway equipment products, including parts (RED Business), through a slump sale in accordance with Section 2(42C) of the Income-tax Act, 1961. Subsequently, on June 1, 2025, the Company successfully completed the transfer of the RED Business to Sona Comstar, upon fulfilment of all conditions precedent as stipulated in the Business Transfer Agreement (BTA). The Railway Equipment Division (RED) was classified as a discontinued operation.

The financial statements have been prepared in compliance with Indian Accounting Standards (Ind AS) prescribed under the Companies (Indian Accounting Standards) Rules, 2015, as amended. Comparative figures include prior-period adjustments arising from the amalgamation. The results of operations relating to the Railway Equipment Division, disposed of during the year, have been disclosed as discontinued operations in accordance with Ind AS 105, ensuring improved transparency and comparability of continuing operations.

Consolidated Financial Performance

Consolidated revenue from continuing operations stood at _11,540.3 crores, up 12.7% YoY reflecting stable growth over the previous year, supported by consistent demand across core business segments and selective price realisation improvements.

EBITDA stood at _1,496.4 crores, reflecting benefits from operational leverage and improved product mix, partially offset by elevated input costs, particularly in raw materials and traded goods.

Profit before tax and exceptional items from continuing operations at _1,787.2 crores, driven by steady operating performance and controlled costs. Profit after tax from continuing operations at _1,366.4 crores, owing to stable operational execution and improved cost management. Earnings per share from continuing operations a _124.2. Consolidated Net Profit after tax including discontinued operations came at _2,394.1 crores as against _1,265.0 crores in the previous year. Earnings per share (EPS) for year ended March 2026 at _217.61 as against _115.04 in the previous year.

Segmental Performance

Agri Machinery Segment

The Agri Machinery segment remained the main contributor to revenue, supported by steady tractor demand, improving rural sentiment and replacement-led demand in select markets.

Segment revenue stood at _9,779.6 crores, registering a 15.8% year-on-year growth compared with _8,447.2 crores in the previous year. The performance was supported by a stronger product mix, enhanced operational efficiencies, and targeted pricing actions. As a result, the EBIT margin for the year ended March 2026 improved to 12.6%, an expansion of 190 basis points over 10.7% recorded in the previous year.

The segment continues to benefit from long-term structural drivers, including increasing mechanisation of agriculture, the need for improved productivity and a gradual shift towards higher-horsepower tractors.

Construction Equipment Segment

The Construction Equipment segment recorded revenue of approximately _1,685.9 crores during the year, compared with _1,730.1 crores in the previous year. The segment witnessed stable demand conditions, supported by sustained infrastructure activity and continued public capital expenditure in roads, railways, and urban infrastructure, although some variability was observed in project execution timelines.

EBIT margins stood at 7.9% for the year ended March 2026, as against 9.9% in the previous year, reflecting margin pressures during the period. Infrastructure-led demand continues to remain a key structural driver for the segment, particularly across government-led capital expenditure programs.

Dividend

Reflecting the Companys strong financial performance and continued commitment to shareholder value creation, the Board has recommended a final dividend of 330% for FY 2025-26, equivalent to _33.0 per share. Including the special dividend of _18.0 per share already paid during the year, the total dividend payout for FY 2025-26 amounts to _51.0 per equity share of face value _10 each.

Balance Sheet Strength

The Company continues to maintain a strong and conservative balance sheet, characterised by minimal leverage and a robust net worth base. The debt-equity ratio remains close to zero, reflecting a self-sustaining growth model supported by internal accruals.

Working capital efficiency remained stable throughout the year, backed by disciplined inventory and receivable management. This financial strength provides the Company with greater flexibility to navigate cyclical demand variations and pursue strategic growth opportunities.

Outlook

The Companys financial performance during FY 2025-26 reflects steady execution despite a mixed demand environment, supported by disciplined operations and benefits from structural integration.

Going forward, the Companys performance will continue to be shaped by the following:

- Rural demand trends and agricultural income cycles

- Infrastructure investment momentum

- Commodity price movements

- Global macroeconomic and trade conditions While near-term visibility relies on external factors, the Companys strong balance sheet, diversified product portfolio, and continued focus on operational efficiency are expected to support sustained performance over the medium term.

Key Ratios

	Standalone		Consolidated
In K Crore (Unless otherwise stated)
	FY 2026	FY 2025	FY 2026	FY 2025
Revenue from Operations	11,472.78	10,186.96	11,540.26	10,243.88
Material Costs	7,994.23	7,216.24	8,035.20	7,255.14
PAT	1,380.95	1,110.03	1,366.42	1,124.06
Revenue Growth	12.62%	4.69%	12.66%	4.49%
EBITDA	1,512.96	1,177.84	1,496.52	1,165.30
Operating Profit Margin	13.19%	11.56%	12.97%	11.38%
Net Profit Margin	12.04%	10.90%	11.84%	10.97%
Basic EPS	125.52	100.96	124.2	102.23
Trade Receivables(Avg Basis)	1,307.02	1,421.57	1,267.20	1,379.88
Trade Receivable Days	42	51	40	49
Trade Payables (Avg Basis)	1,900.54	1,629.10	1,916.61	1,645.14
Purchases	8,050.61	7,602.18	7,999.66	7,633.53
Trade Payable Days	86	78	87	79
Inventory	1,401.26	1,343.89	1,472.26	1,398.99
Inventory Turnover	64	68	67	70
EBIT	1,824.44	1,393.62	1,807.66	1,382.96
Interest Expense	18.91	27.03	20.43	29.17
Interest Coverage Ratio	96.48	51.56	88.48	47.41
Debt	-	-	36.21	2.25
Equity	12,399.76	10,380.22	12,368.89	10,362.90
Debt Equity Ratio	-	-	0.29%	0.02%
Networth	12,399.76	10,380.22	12,368.89	10,362.90
Return on net worth/Equity	11.14%	10.69%	11.05%	10.85%
No of Shares O/S	11,18,77,754	11,18,77,754	11,18,77,754	11,18,77,754
Share Price- NSE	2,764.03	3,271.00	2,764.03	3,271.00
Share Price- BSE	2,738.65	3,245.50	2,738.65	3,245.50
M Cap (As per BSE)	30,639.40	36,309.93	30,639.40	36,309.93
Revenue Multiple	2.67	3.56	2.66	3.54
PE Multiple	21.82	32.15	22.05	31.75

Note: Balance sheet items include discontinued operations; all other items pertain to continuing operations unless otherwise specified.

DISCLAIMER Certain statements in the Management Discussion and Analysis regarding the Companys objectives, projections, estimates, expectations, or predictions may be classified as forward-looking statements. Actual results may differ from those expressed or implied. Key factors that could impact the Companys operations include the availability and pricing of raw materials, cyclical demand and pricing in the Companys main markets, changes in government regulations and tax policies, and economic developments in India and other countries where the Company operates, along with other incidental factors. These projections may also be influenced by external macroeconomic factors beyond the Companys control, including, but not limited to, raw material availability and pricing, fluctuations in cyclical demand, market pricing trends, regulatory changes, taxation policies, and broader economic developments In line with the Securities and Exchange Board of Indias 2018 amendment to the Listing Obligations and Disclosure Requirements, Escorts Kubota is required to report any material changes in sector-specific financial ratios. The following section provides an overview of these changes alongside key financial metrics.