you are here:

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

Oct 25, 15:05
1495.95 29.25 (1.99%)
Volume
AVERAGE VOLUME
5-Day
91,277
10-Day
76,562
30-Day
105,460
112,215
  • Prev. Close

    1466.70

  • Open Price

    1485.00

  • Bid Price (Qty.)

    1494.65 (1)

  • Offer Price (Qty.)

    1495.75 (12)

NSE Live

Oct 25, 15:05
1494.85 31.55 (2.16%)
Volume
AVERAGE VOLUME
5-Day
1,291,622
10-Day
1,154,755
30-Day
1,395,536
823,846
  • Prev. Close

    1463.30

  • Open Price

    1475.00

  • Bid Price (Qty.)

    1494.65 (22)

  • Offer Price (Qty.)

    1495.95 (10)

Annual Report

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

Chairman's Speech

Dear Shareholders, The country, economy and industry are at a cusp where the only certainty is the inevitability of change. Food security has emerged on top of the agenda even as food inflation has stayed rampant. Industrial production has dipped dramatically and the green shoots of revival have yet to create a carpet of hope for investments and return to growth. However, the proactive cross-sectoral initiatives of the government hold out promise for the year ahead. We are fortunate at Escorts to have been able to read the tea leaves and forge strategies that have kept us profitable through a very difficult year. Even as I share with you some of our larger ambitions in the context of continued overall optimism over the future of India, I would like to first thank you for your support this year for the major realignment in the way your Company does business. The combined strength of the Group implies greater flexibility to deal with downturns and to stay profitable in the toughest of market situations. Restructuring for Growth The restructured Escorts Limited will be the transformation driver for your Company and will bring significant benefits to customers, shareholders and wider stakeholders. In FY 2012-13, the Company has embarked on the process of becoming a large, collaborative engineering enterprise with seamless sharing and transfer of manufacturing best practices between divisions. The years ahead will demonstrate the necessity and gains from the merger of the Group companies. As a strategic business initiative, we merged our construction equipment division with the parent Company to synergize our efforts at tapping the emerging market opportunities. Clearly, Escorts Construction Equipment business is in the right sector at the right time with the right set of products. Your Company has invested over the years in the construction equipment business and, as a part of the merged entity, we expect the impending construction take-off in a far more emphatic manner. The last fiscal was challenging and Escorts battled successfully against the market dynamics both in the tractor and construction industry. Escorts has decided to take the path of driving growth by opening up markets and capturing market share while keeping a tight rein on costs. Co-creating the Future Indian economy is poised to take the leap and propel us into the league of developed countries. We as business groups have the responsibility to strategise on how to produce profitably and tap the global markets. We must resolve to occupy areas of innovation that can distinguish us from the crowd and seek to provide technologically advanced solutions. The Escorts approach to business has helped us serve our loftier ambitions of contributing to the livelihoods of our customers. Long term success of any business requires a happy and sustainable society with an appetite for growth. Escorts products facilitate increased returns and a better quality of life for all our customers. This is our small but tangible contribution to the emerging India of 21st century. As we resolve to take Escorts onto a new growth trajectory, we also become part of the national endeavour towards an Indian renaissance. In recent years, aggregate demand from the Indian market has become significant by global standards and is projected to sustain rapid growth over the next two decades or more. India now stands as an important source of growth for manufacturers. Today, while economy wakes to the necessity of customising their designs to meet the Indian requirements, we at Escorts have already taken the lead by co-creating the future with our customers. In times when global supply chain patterns are making strategic shift towards Asia, we at Escorts have renewed our trust and commitment with our suppliers to etch out business opportunities outside the Indian market. The continued market faith finds resonance in the organisational strength of the Company. We believe, businesses are created and sustained with the sweat and passion of fellow travelers. In pursuance, we have engaged proactively with our employees. We cherish their energetic and imaginative contribution towards the Company and its business goals. Drivers of Change Turning to the overall picture, our progress will be as fast and as sure as those that we walk with. The Working Group of the 12th Plan has correctly pointed out that it is almost impossible to sustain 8 per cent growth in economy and 4 per cent growth in agriculture sector if crop sector remains stagnant. One cannot be vocal enough in endorsing the view of the Planning Commission that the crop sector needs to continue to remain at the centre of public measures like institutional reforms, infrastructure creation, generation and dissemination of improved technology, price and trade policy, spreading use of modern inputs, increasing credit, enhancing irrigation facilities, etc. Our entrepreneurial propulsion towards value generation gets defined within the macro and micro economic indicators of the country and the world at large. Recent moves towards allowing FDI in retail sector will allow the farmers to participate more effectively in the growth story of India. With direct corporate sourcing of farm produce from farmers becoming a distinct possibility, India''s rural landscape could be up for another wave of economic transformation. We, as providers of farm mechanisation solutions, see new opportunities in this unfolding saga. We now act with the conviction that India is on the cusp of a gigantic leap forward in agriculture and we are prepared to be a partner to the farmer in every facet of his powered machinery usage. The immediate prognosis for the farm sector, though, isn''t very bright with projections of a decline in overall sales due to lower kharif output in this fiscal. However, over the longer term, tractor sales are expected to continue to grow at 8 to 10 per cent. A number of reasons seem to support this projection, particularly the continued support to agriculture credit, rising MSPs and good crop output. Farm incomes are expected to continue to deliver strong growth as improvement of irrigation facilities, government support and strengthening of the commodity market takes place. The government''s emphasis on increasing agricultural credit has been crucial in boosting the demand for tractors since almost 75 per cent of tractors are bought on credit. We believe that the growth in the sector will be far more spread out, vertically across HP and horizontally across regions. Consequently, Escorts growth strategies have focused both on introducing higher HP tractors and mini-tractors for specialised needs even as we are aggressively creating a market for ourselves in the South. In addition, there is increasing use of tractors for non-farm activities and today accounts for around 30 per cent of the demand for tractors. I draw your attention to the approach being taken by the agri machinery division which is introducing new products every six months, which not only brings value to the customers but will significantly increase Escorts'' market share. The Company is today rolling out in the market a lot of what we had planned over the years. Escorts today is focused on building profitability by taking a higher share of the top end of the tractors market by launching higher HP tractors. Further, we are creating significant presence in the South while shoring up our portfolio in the North and West. We see the current phase as one of investment and expansion and we believe that we shall reap the rewards on the upturn of the market as the industry grows. Our focus is on building a national market base, providing customers a range of crop solutions and implements, PTO and haulage applications for tractors, product upgrades and improvements as well as targeted marketing for non-agriculture usages. At the crux of our approach to the market is the increasing demand for farm mechanisation and the accessorised deployment of tractors for non-farm uses. We believe multi-domain growth drivers along with cost compression measures will enable Escorts to deliver profitable growth. The year 2012 has continued to be a difficult one for the construction industry. The sluggishness in economy, policy inertia and lacklustre infrastructure projects have all impacted the much awaited boost in the country''s infrastructure landscape. Infrastructure plays a key role in stimulating economic growth but unfortunately the roads sector has experienced difficulties in implementing national highway projects, the project closure of the four Ultra Mega Power Plants is unclear, and in the port projects too, the award rate has been around 50 per cent of the planned rate. The government is taking cognizance of this and in its 12th Five Year Plan envisages an increase in investment in infrastructure to $1 trillion, taking annual investment in infrastructure from the current level of 6% of GDP to over 10%. With the government re-emphasising and providing the requisite impetus to infrastructure projects, we are bullish that the construction equipment industry will grow at a healthy pace. With the expected return of the construction boom, Escorts Construction Equipment business has been introducing new application-based, high-end machines. Our focus is on innovative and optimal design, engineering, productivity and efficiency for enhanced products catering to customers'' current and future needs. The potential of Indian market for lifting, loading and handling solutions is huge and we are capitalising on our engineering strength by developing products that suit the local application. In the recent years, our focus has been to enhance load capacities, reach and transmissions. The construction equipment industry is witnessing a shift towards using safer and more advanced technology. To meet these needs we have introduced innovative and international standard safety features in our products. Introducing safety features in our entire range of products forms the central theme for all future product enhancements. Our outlook on Indian Railways is positive. Correction of rail passenger tariffs should ease the pressure on availability of funds for growth and maintenance, resulting in a more vibrant business sentiment. The Indian Railways modernisation has the potential to add around 2% to GDP growth. Under the government''s Vision 2020 plan of Indian Railways, radical modernisation process has been envisaged as part of the 12th Five Year Plan. Setting up of dedicated Railway Safety Authority, introduction of high-speed trains, new generation locomotives/coaches, installation of green toilets, capacity augmentation, manufacturing state-of-the-art railway technologies, components and equipment for global markets are some of the key points of the plan. At Escorts, we are keen to help build a safer, a more reliable and a more comfortable Indian Railways by bringing in high technology, safety critical products available worldwide at Indian prices through innovation, technology partnerships, frugal engineering and quality excellence. We also look forward to tap world markets in SE Asia, Middle East and African countries, hitherto untapped by Escorts. The auto component industry witnessed a moderate growth of 16 per cent in 2012, affected largely due to the rising fuel prices and high interest rates. Low-cost, ample production capacity, world-class technology and international quality standard products are factors that offer Indian auto component manufacturers an edge. At Escorts, we have already positioned ourselves to meet the future demands by harping on global standard products and technology. We expect a surge in domestic demand for auto products too due to recent reform measures by the government and existing under penetration of vehicles. We are prepared to cash the new opportunities while continuing to tap the export market. Our strategy is to target newer markets, enrich our product range, reduce costs, and restructure the business. The Company won the Best Supplier award in 2012 from one of its key customers, an indicator of our in-house design and development capabilities that we can leverage to assure our global customers of our potential. The performance of last year shows the success of strategies that your Company has adopted including launch of new products, deepening of sales and distribution network and robust brand building. This good performance is despite the market conditions which have toughened further. In the year ahead, your Company will continue an even more aggressive approach to expanding its product portfolio, strengthening its current product propositions and increasing its market share by being more aggressive in markets where it has had limited presence. This, we believe, is just a beginning as we take a futuristic leap to further accelerate our efforts for building a stronger Escorts, that connects the lives of customers and communities at large. Investing in the Future The Escorts vision and values are the guiding force of our endeavours. We see ourselves not as just a supplier of products but as a service provider to our customers. Our successes are made possible by our ability to view the market from our customer''s eyes. For us, lifetime value of our customer based on inherent value exchange is the growth driver and not just the price based profit motive. Our customers have reaffirmed our faith in our value system by becoming champions for the products they have bought and experienced. Escorts has always believed in being a customer-centric Company for realising its aim of becoming one of the top engineering companies of India. We have worked towards contributing our bit to India''s growth story and bringing in quality change in the lives of people. Our true reward is the confidence and trust of our customers which keep us driving and motivated for bringing the best for them. But, at the same time, I thank all our stakeholders with whose support the journey so far has been so comfortable. As we enter the new fiscal, I am confident that we have the right combination of people, products and processes to take Escorts to the next level of performance and growth. As always, we are grateful to all our shareholders for the immense confidence you have placed in us and we are committed to continue to build and strengthen the Escorts brand. Rajan Nanda Chairman and Managing Director