Q3FY21 Result Update - Escorts - ICICI Direct

Escorts reported robust Q3FY21 results. Total operating income for Q3FY21 came in at Rs. 2,017 crore, up 23.5% YoY tracking 25.7% YoY growth in tractor volumes to 31,562 units. Within segments, gross revenue from tractors was at Rs. 1,653 crore (up 28% YoY) while construction equipment (CE) revenues grew 13% YoY to Rs. 245 crore) and railway equipment division (RED) reported 5.7% YoY revenue decline to Rs. 117 crore. EBITDA margins came in at 18% (down 30 bps QoQ), with savings in employee costs and other expenses nearly negating gross margin contraction. Consequent standalone PAT in Q3FY21 came in at Rs. 280.6 crore, up 83.3% YoY.

Valuation & Outlook

Sales, PAT CAGR in FY21E-23E is seen at ~15%, 11%, respectively. We believe present valuations adequately capture topline growth prospects and await (a) margin alleviation signs and (b) firm plans for cash utilisation before turning positive again. We maintain HOLD rating on Escorts and value it at Rs. 1,500 on SOTP basis (unchanged from previous target price; assign 17x P/E on core 23E EPS & 25% holding company discount to treasury shares).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Escorts_Q3FY21.pdf

Shares of ESCORTS LTD. was last trading in BSE at Rs.1383.8 as compared to the previous close of Rs. 1330.4. The total number of shares traded during the day was 216399 in over 9101 trades.

The stock hit an intraday high of Rs. 1423.8 and intraday low of 1308. The net turnover during the day was Rs. 299105064.

Source : Equity Bulls

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