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Escorts Ltd.

BSE: 500495 | NSE: ESCORTS |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE042A01014 | SECTOR: Auto - Tractors

BSE Live

Sep 24, 12:31
1486.15 -19.25 (-1.28%)
Volume
AVERAGE VOLUME
5-Day
128,035
10-Day
157,709
30-Day
119,921
45,367
  • Prev. Close

    1505.40

  • Open Price

    1520.00

  • Bid Price (Qty.)

    1486.00 (50)

  • Offer Price (Qty.)

    1486.10 (28)

NSE Live

Sep 24, 12:31
1486.00 -22.40 (-1.49%)
Volume
AVERAGE VOLUME
5-Day
2,379,234
10-Day
1,984,209
30-Day
1,857,832
547,189
  • Prev. Close

    1508.40

  • Open Price

    1514.80

  • Bid Price (Qty.)

    1486.00 (549)

  • Offer Price (Qty.)

    1486.05 (17)

Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2012 2011 2010

Chairman's Speech

Dear Shareholder, The year 2007-08 has been one of the most significant for Escorts India. The seeds sown this year past will have fruits that will be harvested for a long time to come. Before we reflect on our momentous successes, we must take note of the environment in which we operated. The year 2007-08 was marked with severe economic strains of rampaging inflation, unprecedented fuel costs, tightening interest rates by the central bank in the first half and virtual cessation of farm loans in the second. If these were not enough, the farm economy slowed down and the government failed to increase support prices. In that mix, tractor prices which had to firm up to account for inflationary prices slid later in the year. Sales slowed through the year, first, due to higher prices and later due to poor credit availability from public sector banks and the limited capacity of NBFCs, cooperative banks and regional banks to make up the deficit. The final straw came in the form of the global meltdown that made the rupee weaker, imports costlier and dampened exports. For the farming community, the year was significant for both the right and the wrong reasons. The government sought to ease the pain of many farmers by waiving their loans. That said, it failed to provide an adequate enough mechanism for the fallout for the banking community. In fiscal 2008-09, priority sector lending has failed to meet one third of its targets. Consequently, farm credit has gone through a huge squeeze in the past nine months. However, some semblance of normalcy is reappearing as it has become evident that it is rural India which is the most resilient in these recessionary times. Despite this grim economic setting, your company has ended the year with a strong, profitable showing, putting behind the years of struggle. For Escorts, the return to profits was a clear demonstration of your companys restored health and success of the revamp. Your company announced a profit of Rs. I1.87 crore on the back of a slew of strategies that has delivered higher domestic market share, improved earnings from a lower market base, structural reorganisation and greater cost and operational efficiencies. Escorts Limited has proven through its performance in fiscal 2007-08 that the efforts to strengthen the fundamentals of the company, sharpen focus on core strengths, build value for customers and drive operational efficiencies have put the company on a profitable track. Of the many initiatives that were undertaken, the biggest contributor has certainly been the initiatives in revamping the economics of the business by focussing on cost compression. A slew of initiatives has resulted in a saving of over Rs. 100 crore by eliminating waste, working more efficiently, right-sizing the work force, reduction of held stock and negotiating better prices from our suppliers. AGRI MACHINERY BUSINESS Despite industry slowdown in tractor sales, Escorts Limited maintained its overall sales performance. Domestic sales in particular demonstrated strong growth and Escorts captured incremental growth beyond the industrial volume of the market by adding niche products to the portfolio as also going up the value chain. The cost compression and rationalization exercise coupled with structural organization and improving operational efficiencies is reaping rewards for the company. The results are already encouraging and validate the entire exercise. Your company wants to expand its horizons to become a complete farm solutions provider from just being a tractor manufacturer. Our aim will be to develop solutions that will enhance agricultural productivity and improve quality of life in rural India. Your company has aggressive plans of further increasing the market reach and subsequently market share by offering price competitive models of global quality. This, backed by spare-parts & after sales service support deliveries, will help us deliver to our customers an overall satisfaction and success package for a long-term win-win relationship. Escorts is further increasing the market reach and subsequently the market share by offering price competitive models of global quality norms in terms of technology, performance and durability. Better marketing, innovative products, robust financial systems and controls, dealership penetration and greater emphasis on export markets will be the key pillars on which our growth strategies will be based. The agri machinery business registered strong growth in profitability. Right through the year, despite difficult market conditions, Escorts increased its market share. In the current economic situation, the agriculture sector with its relative insularity from the buffets of global financial collapse can provide India the necessary growth engine. CONSTRUCTION EQUIPMENT BUSINESS - ECEL The Construction Equipment Business has been recording a handsome y-o-y growth in its gross revenues in the financial year ending 31st March 2007. The company topped it up further by registering an impressive 50% topline growth in the current year that ended on 31st March 2008. As one of the major milestones in its transformation journey, ECEL has just moved into its state-of-the- art and intelligent manufacturing & assembly facility in Ballabgarh, which spans a covered area of over 250,000 sq. ft., spread over 15 acres land. This factory is equipped with contemporary capabilities and processes to facilitate a three-time increase in its production capacity for its existing as well as new, high quality products. ECEL has set its sights to an ambitious growth plan over the next five years, thanks to a slew of new product introductions as well market expansion strategies, which shall pan out from the beginning of calendar year 2009. However, given the recent global financial and economic turmoil, the tremors of which are being felt on the Indian economy, ECEL too faces growth challenges in the FY 2008-09 and the shorter term. In the first half of FY 2008-09, ECEL also had to contend with an unprecedented hike in the input costs, driven by steel. ECEL has been particularly impacted by the economic downturn and slowing down of the construction industry. Combined with the higher depreciation costs arising from its new plant, the impact is that much more. However, ECELs product quality, cost of production are of global standards and will drive business volumes with the recovery of the core sectors. ENGINEERING DIVISION The Engineering Division of your company comprises of Railway Equipment Division (RED) and Auto Suspension Products Division (ASPD). During the year 07-08 Indian Railways grew by approximately 10 % which gave our Railway Business a significant increase in our order book and billing. During this period your company could grow business in Air Brake, Brake blocks, Shock absorbers, couplers etc. and as a result of this RED business has grown by 24% over last year, while export business grew by 100 %. The Rudrapur plant which started production in the year 2005-06, contributed significantly to this growth. Indian Railway has embarked upon many ambitious projects of environmental protection and one of them is introduction of Bio-Degradable toilets in passenger coaches. The Auto Suspension business, automotive market in India in 2007-08 remains static compared to 2006- 07. Our main customer in 2 wheeler segment has seen significant reduction in motorcycle production, affecting our domestic sales adversely. During the 2nd half of the year 07-08 prices of all Raw Materials increased by 20 % affecting our material cost. However, with initiatives on cost reduction from suppliers and price increase from customers, we could negate the effect of inflation considerably. Your company has taken many steps during 07-08 in developing new products, new customers and new markets both in Auto Suspension as well as in Railway business. On the strength of these initiatives we are confident of increasing our sales and contribution of Engineering Division significantly during 08-09, global meltdown not withstanding. IN CONCLUSION By enabling people to drive this change, we are well on our path to making Escorts a lean and efficient organisation. What we have today is a company that is strong enough to battle market headwinds. Today, we are far more focussed. We are constantly evolving and innovating, creating new products to suit market demands. On the back of our performance, better fundamentals and strong marketing drive, we commit to make your company even more profitable in the year closing September 2009 and with a better topline. I am hopeful that this year your companys overall performance on operating levels would exceed our best past years. Rajan Nanda Chairman and Managing Director