Escorts Ltd - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 1,153 ; MCap: Rs. 14,127 crore)

Escorts reported steady operational performance in Q4FY21, with all key readings being largely in line with our estimates.

Q4FY21 Earnings Summary

- Total operating income for Q4FY21 came in at Rs. 2,211 crore, up 60.1% YoY vs. our estimates of Rs. 2,178 crore. Within its segments, gross revenue from agri equipment machinery (EAM) i.e. tractors stood at Rs. 1,739 crore (I-Direct estimate Rs. 1,741 crore). Tractor ASP for the quarter stood at Rs. 5.33 lakh/unit, up 1.9% QoQ. Tractor sales volume for the quarter stood at 32,588 units, up 62.1% YoY. FY21 revenues from EAM division of Rs. 5,667 crore (up 27.7% YoY) tracked 24.1% rise in volumes to the best ever level of 1.07 lakh units

- Gross Revenue from construction equipment grew by 53.3% YoY to Rs. 322 crore in Q4FY21 while railway equipment division posted revenue growth of 35.6% YoY to Rs. 146 crore. Volumes in the construction equipment rose by 62.7% YoY to 1,604 units. Present Railway order book of > Rs. 340 crore is expected to be executed over the next 6-8 months

- EBITDA in Q4FY21 stood at Rs. 345 crore (up 77.3% YoY) with attendant EBITDA margins at 15.6% (down 245 bps QoQ; I-Direct estimate: Rs. 338 crore, 15.5%). While gross margins deteriorated more than expected (by 280 bps QoQ), other expenses fell as a percentage of sales by 30 bps sequentially. Tractor division EBIT margins fell by 310 bps on QoQ basis to 17% despite the unit running at ~100% capacity utilisation during the quarter and product mix in terms of hp range remaining unchanged

- Consequent standalone PAT in Q4FY21 came in at Rs. 266 crore, up 89.6% YoY (I-direct Estimate: Rs. 255 crore), aided slightly by lower than usual tax rate. PAT for the year stood at Rs. 873 crore, up ~80% YoY.

- On the B/S front, Escorts generated CFO of Rs. 1,122 crore in FY21, up from Rs. 817 crore in the previous year mainly on account of sharp improvement in profitability. FCF generated for the year amounted to Rs. 1,008 crore vs. Rs. 635 crore in FY20

- Escorts declared dividend of Rs. 7.5/share for FY21, including special onetime dividend of Rs. 2.5/share

We would be coming out with a detailed report soon.

Shares of ESCORTS LTD. was last trading in BSE at Rs.1164.75 as compared to the previous close of Rs. 1169.25. The total number of shares traded during the day was 108655 in over 5677 trades.

The stock hit an intraday high of Rs. 1183.65 and intraday low of 1137.25. The net turnover during the day was Rs. 125848207.

Source : Equity Bulls

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