ESCORTS: Disappointing result with loss of market share & margins (ESC IN, Mkt Cap USD2.9b, CMP INR1722, TP INR1575, 9% Downside, Neutral) Expects industry to grow in low-mid single digit in FY23 ESCORTS' 1QFY23 performance was severely impacted by weaker mix and a sharp increase in steel prices. It lost market share of ~140bp YoY as the company focused on balancing market share and margins. While 2HFY23 outlook is still unclear, visibility on margins recovery is high though market share re...
Three Directors at Escorts Limited sold after exercising options/sold 8,500 shares at between 1,315.000INR and 1,365.000INR. The significance rating of the trade was 55/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
ESCORTS: Above our estimate; a strong showing in Tractors, but the cycle is turning (ESC IN, Mkt Cap USD2.2b, CMP INR1224, TP INR1270, 4% Upside, Neutral) Single-digit growth in FY22 implies a residual decline in single-digit Operating performance in 1QFY22 was driven by strong growth in the Tractor business (benefitting from the mix). The demand outlook is turning murky, which raises uncertainties over the next 12-15 months, though Kubota JV, leaner cost structure, recovery in the Railw...
The independent financial analyst theScreener just downgraded the general evaluation of ESCORTS (IN), active in the Commercial Vehicles & Trucks industry. As regards its fundamental valuation, the title loses a star(s) and now shows 1 out of 4 stars. Its market behaviour is also negatively reassessed and may be considered as moderately risky. theScreener believes that this double requalification keeps the title under pressure and justifies an overall rating downgrade to Neutral. As of the analys...
US Dollar Breakdown Bullish For Risk Sentiment Global indexes including the MSCI ACWI and ACWI ex-US are following in the MSCI EM index's footsteps by breaking to new highs. This is bullish and signals a new leg higher is underway. Additionally, the US dollar is showing signs of a breakdown, something we view as a positive for global risk sentiment as long as the decline continues to be orderly. Overall our outlook remains bullish and we suggest buying any dips. · US Dollar (DXY) Brea...
EM Outperforming; Favor EM over EAFE With many global markets crumbling last week, one might assume that EM would have underperformed -- but that is not what transpired. What we saw was a decline in the US dollar which, along with improving coronavirus metrics in China, led to EM outperformance. Reiterating our 12/20/19 EM Strategy, we continue to believe EM is a better place to be than EAFE, supported by new highs in the EM vs. EAFE ratio and our ongoing belief that the US dollar is likely not...
Escorts: Beat driven by gross margin expansion; Outlook improving (ESC IN, Mkt Cap USD1.3b, CMP INR748, TP INR782, 5% Upside, Neutral) Recovery largely priced in and expected 4QFY20 onwards Escorts’ 3QFY20 performance is a reflection of stability in volumes, benefit of mix improvement and cost savings, all of which should sustain in the coming quarters. According to management, FY21 outlook has turned positive with estimated low single-digit growth. We upgrade our EPS estimates by ~9%/5...
ESCORTS: In-line; recovery in festive season drives inventory reduction (ESC IN, Mkt Cap USD1.1b, CMP INR648, TP INR700, 8% Upside, Neutral) Operating deleverage hurts margins: Escorts' (ESC) revenue declined ~5% YoY to INR13.2b (our estimate: INR13.5b), led by lower volumes in Tractor (-6% YoY) and Construction Equipment (CE; -21% YoY) segments. Railway revenue grew ~20% YoY. Tractor realizations declined 2.8% QoQ (+1.7% YoY) to ~INR504k due to a weaker mix. EBITDA margin of 9.6% (our estim...
ESCORTS: Tractor cycle uncertain, inventory reduced (ESC IN, Mkt Cap USD0.8b, CMP INR471, TP INR520, 10% Upside, Neutral) Operating deleverage hurts margins: Revenue declined ~6% YoY to INR14.2b (our estimate: INR13.9b). Volumes were down by ~14% YoY in Tractors and by ~21% YoY in Construction Equipment (CE). However, Railway revenue grew ~34% YoY. Tractor realizations improved ~6% QoQ (+8% YoY) to ~INR519k, driven by higher spares revenue and ~1% price hike in Apr'19. EBITDA margin of 10...
Escorts: EBITDA in-line; tractor industry to grow 5-8% in FY20 (ESC IN, Mkt Cap USD1.1b, CMP INR649, TP INR724, 12% Upside, Neutral) Tractor margin at seven-quarter low: ESC's revenue grew 14% YoY (+1% QoQ) to INR16.3b (in-line) in 4QFY19. Tractor, Construction Equipment (CE) and Railway businesses grew by 12.5%, 10% and 36% YoY, respectively. Tractor realization declined 2.5% QoQ (+5.5% YoY) to INR490k (our estimate: INR497k) due to a weak product mix relative to 3QFY19. EBITDA margin of 11...
Escorts: Margin beat on operating leverage; market share gain continues (ESC IN, Mkt Cap USD1.2b, CMP INR674, TP INR754, 12% Upside, Neutral) Operating leverage offsets mix/RM pressure: ESC's revenue increased 37% YoY (+18% QoQ) to INR16.5b (est. INR16b). Tractor/construction equipment (CE)/railway businesses grew 36%/44%/34% YoY, led by volume and realizations growth. Tractor segment realization grew 0.2% QoQ (+1.2% YoY) to INR502k (est. INR497.1k) largely led by price hikes as mix worse...
ANNUAL REPORT THREADBARE (ART) | ESCORTS FY18: Performance improves across all segments ESCORTS (ESC) FY18 annual report highlights another year of robust operating performance with EBITDA surging 79% to INR5.5b on healthy growth across business segments. Consolidated revenue grew 22% to INR50.6b, while EBITDA margins expanded 347bp to 11%. Agri equipment business continued its growth trajectory with revenue growing 18% to INR40.1b and EBIT margins expanding 330bp to 13.6% on better volumes....
Escorts: Above estimates, cost control, operating leverage drives margin (ESC IN, Mkt Cap USD1b, CMP INR626, TP INR715, 14% Upside, Neutral) Overall performance above estimate: ESC’s revenue increased 15.4% YoY (-7.5% QoQ) to INR14b (est. INR12.8b). Tractor, construction equipment and railway businesses grew by 7%, 51% and 45%, respectively, led by volume and realizations growth. Tractor segment realizations grew 3.2% QoQ (+3.7% YoY) to INR495.9k (est. INR475.8k) largely led by price hike...
Escorts: A better-than-expected quarter, EBITDA margin hits multi-quarter high (ESC IN, Mkt Cap USD1.6b, CMP INR907, TP INR988, 9% Upside, Neutral) Performance exceeds expectations: ESC's revenue increased 29.9% YoY (+5.2% QoQ) to INR15.1b (est. of INR14.2b). Tractor, construction equipment and railway businesses grew strongly by 25%, 50% and 35%, respectively, led by healthy volume growth. Tractor segment realization grew 3.5% QoQ (-10.4% YoY) to INR480.6k (est. of INR467.7k), largely le...
Escorts: Healthy progress across segments, upgrade to Neutral (ESC IN, Mkt Cap USD1.5b, CMP INR951, TP INR982, 3% Upside, Neutral) Revenue, EBITDA, PAT in-line: ESC's revenue increased 40.5% YoY (+19.2% QoQ) to INR14.4b (in-line). Tractor, construction equipment and railway businesses grew strongly by 36.4%, 44.5% and 14.2%, respectively, led by healthy volume growth. EBITDA margin was flat QoQ at 12.1% (est. of 11.6%), as the benefit of lower staff cost (-110bp QoQ) was partially offset ...
Escorts: Strong quarter; expect the trend to continue in 4Q (ESC IN, Mkt Cap USD1.5b, CMP INR813, TP INR714, 12% Downside, Sell) Revenue in-line; strong beat on EBITDA and PAT: ESC’s overall revenue increased 12.2% YoY to INR12b (est. of INR12.4b) in 3QFY18. Construction equipment and railway equipment businesses registered strong growth of 21.7% and 24.2% YoY, respectively. Tractors business grew by 6.6% YoY. EBITDA margin expanded 350bp YoY to 12% (est. of 9.9%), led by a 230bp decline in ...
Escorts: Early onset of festive season boosts 2Q; 2HFY18 to remain subdued; Valuations captured in price(ESC IN, Mkt Cap USD1.4b, CMP INR760, TP INR688, -9% Downside, Downgrade to Sell)Strong quarter driven by early onset of festive season: ESC’s overall revenue increased 23.3% YoY to INR12.1b (est. of INR11.9b) in 2QFY18. Construction equipment and tractor businesses registered strong growth of 23% and 22% YoY, respectively. EBITDA margin expanded 470bp YoY to 11.6% (est. of 9%) in 2QFY18, le...
Escorts: Strong monsoon, early festive season to lay growth foundation(ESC IN, Mkt Cap USD1.2b, CMP INR669, TP INR732, 9% Upside, Neutral)Steady growth despite GST transitional hiccups: Overall revenue increased 11% to INR11.6b (est. of INR11.2b) in 1QFY18 from INR10.5b in 1QFY17, led by strong growth of 20% YoY in Construction Equipment and 10% YoY growth in Tractors. EBITDA margin shrunk 20bp YoY from 8.6% to 8.4% (est. of 8.3%), led by gross margin contraction of 70bp. EBITDA increased 8% YoY...
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