Farm machinery and construction equipment major Escorts Ltd on Friday reported a 24 per cent decline in consolidated net profit at Rs 173.47 crore in the second quarter ended September impacted by lower tractor sales and high raw material costs.
The company had posted a consolidated net profit of Rs 227.22 crore in the same quarter last fiscal, Escorts said in a regulatory filing.
Consolidated revenue from operations in the quarter under review stood at Rs 1,673.85 crore as against Rs 1,654.18 crore in the corresponding period a year ago, it added.
Cost of materials consumed during the period stood at Rs 1,314.43 crore as compared to Rs 991.37 crore in the same quarter a year ago.
In the latest second quarter, Escorts said its tractor sales were at 21,073 units as against 24,441 units in the corresponding period last fiscal, down 14 per cent.
The agri machinery segment posted a revenue of Rs 1,240.9 crore in quarter ended September 2021 as against Rs 1,322.2 crore in corresponding period last fiscal, it added.
"This quarter steep inflation in commodities prices and lower volume, resulted in lower EBIT (Earnings Before Interest and Taxes) margin at 15.1 per cent, as compared to 20 per cent in the corresponding period last fiscal," the company said.
On the other hand, the construction equipment sales volume in the second quarter rose by 30.8 per cent at 1,074 machines as against 821 machines in corresponding period last fiscal. Segmental revenues came at Rs 249.2 crore as against Rs 156.9 crore in the corresponding period last fiscal.
The railway products division revenue grew by 6.2 per cent at Rs 170.2 crore as compared to Rs 160.2 crore in the corresponding quarter a year ago, it added.
Commenting on the performance, Escorts Chairman and Managing Director Nikhil Nanda said,"Industry is constantly changing and adapting to the fast-changing environment. There is a positive sentiment across industry, and we feel, tractor and agri equipment industry is clawing back to a sustained momentum and growth path."He further said,"We are witnessing encouraging developments in construction and railway equipment segment too and are hopeful of a wider recovery soon. We still maintain our preparedness with all safety protocols and guidelines and are well aligned with the national efforts."