Result Update: Escorts Ltd - ACCUMULATE - TP Rs.710 - Kotak

Escorts 1QFY18 results came on expected lines. Revenue for the quarter stood at Rs11.4bn, 11% growth YoY (company restated its 1QFY17 numbers), EBITDA margin came in at 8.5% versus 8.7% in 1QFY17 and adjusted net profit in the quarter was Rs626mn versus Rs565mn in corresponding quarter last year. Good monsoon is expected to translate into robust tractor volume growth in FY18. Company indicated strong revenue growth in the construction equipment and railway equipment segment in the company years. EBITDA margin is expected to improve further from cost cutting initiatives across segments, employee cost saving from VRS, higher capacity utilization, turnaround at construction equipment division and product mix change. We retain ACCUMUALTE rating on the stock with unchanged price target of Rs710.

Shares of ESCORTS LTD. was last trading in BSE at Rs.677.8 as compared to the previous close of Rs. 692.85. The total number of shares traded during the day was 226625 in over 3679 trades.

The stock hit an intraday high of Rs. 696 and intraday low of 674.5. The net turnover during the day was Rs. 155217084.

Source : Equity Bulls

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