Escorts Kubota’s Agri Machinery Business Division shall be increasing the prices of its tractors from June 2023. The price hike is to offset the impact of cost inflation partially. The price increase would vary across models/variants and geographies, the company said.
Moreover, Escorts Kubota, in a statement, added that its Agri Machinery Business Division sold 9,167 tractors in May 2023. The company said that this is its highest-ever May sales as it registered a growth of 8.9 percent as against 8,421 tractors sold in May 2022.
Domestic tractor sales in May 2023 were at 8,704 tractors registering a growth of 13.5 percent against 7,667 tractors sold in May 2022. Overall, the macroeconomic factors and farmer sentiments remain positive, resulting in a positive sales trend across most geographies.
Export tractor sales in May 2023 were at 463 as against 754 tractors sold in May 2022. Escorts Kubota, going forward, expects the current momentum to continue in the near term led by normal rainfall forecast, adequate reservoir levels, better liquidity and consumer credit availability.
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On May 10th of this year, Escorts said that its domestic tractor market share slipped 47 bps YoY to 10.9 percent in Q4 and there has been some impact of unseasonal rains. The company expects Q1 to be flat. In April of this year, the company’s total sales also fell by 9.1 percent with exports seeing a slump of more than 51 percent YoY.
Escorts Kubota saw an above-estimated performance during the March quarter of this year. Its operating profit declined 6.2 per cent from last year to Rs 236 crore while its margin dipped 270 bps YoY. The company will have to adopt an aggressive pricing strategy to regain its lost market share, which will weigh on margin recovery, Kotak Institutional Equities said in a brokerage note last month.
Escorts Kubota Ltd is one of India’s leading engineering conglomerates with diversified business into three different segments – Escorts Agri Machinery (EAM), Escorts Construction Equipment (ECE) and Railway Equipment Division (RED).
(Edited by : Vivek Dubey)
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