Escorts Kubota, a leading player in the agricultural machinery and construction equipment sectors, has reported impressive financial results for the fiscal year 2024 (FY24). The company’s net profit soared by 64.8% year-on-year (YoY) to Rs 1,049.5 crore, compared to Rs 636.6 crore in FY23. Operating revenue also saw a notable uptick, rising 5% YoY to Rs 8,849.6 crore from Rs 8,429.7 crore in the previous fiscal year.
The stellar performance was largely fueled by robust sales in the construction equipment segment, which witnessed a remarkable surge of 42.2% YoY in volumes, reaching 6,548 units in FY24. This translated into a staggering 45% YoY increase in segment revenue, reaching a record high of Rs 1,709.7 crore compared to Rs 1,179 crore in FY23. The segment’s EBIT margin witnessed a substantial improvement, climbing to 9.3% in FY24 from 2.9% in FY23, attributed to higher volumes, a favorable product mix, and effective price adjustments.
Despite a decline in sales volume in the core agri-machinery business, including tractors, the robust performance of the construction equipment segment helped offset this weakness and contributed to an overall positive earnings picture for Escorts Kubota.
In the fourth quarter of FY24 (Q4FY24), the momentum in the construction equipment segment continued to drive growth. Sales volume surged by 17.5% YoY to 1,798 units, while segment revenue witnessed a substantial increase of 23.8% YoY to Rs 476.6 crore compared to Rs 384.8 crore in Q4 FY23. The EBIT margin for the construction equipment segment in Q4FY24 stood at 10.7%, reflecting a significant 264-basis-point increase from 8.1% in the corresponding quarter of the previous year.
Escorts Kubota stands out as a diversified company with a strong presence in multiple segments. While its core business revolves around agricultural machinery, particularly tractors, the company has successfully expanded into the construction equipment sector, offering a wide range of essential equipment such as cranes, loaders, vibratory rollers, and forklifts. This diversification strategy has contributed to Escorts Kubota’s resilience and strong financial performance amidst challenging market conditions.