Farm machinery and construction equipment major Escorts Ltd on May 13 reported a 28.5 percent decline in its consolidated net profit at Rs 190 crore for the fourth quarter ended March 2022 (Q4FY22).
The firm said decline in profit and revenue was due to volume drop in the tractor and construction equipment division. Adverse commodity prices also impacted the financials.
Revenue for the quarter fell 16% year-on-year to Rs 1,879 crore. EBITDA margins slumped by 252 basis points (bps) to 13.1% from 15.6% a year ago.
Tractor sales were at 21,895 units in the quarter, down 33 percent from a year earlier. Domestic market share of tractors declined by 150 bps to 11.4% from 12.9% last year.
Construction equipment sales were at 1,286 units, down 20 percent, the company said.
“Agri sector is seeing some positive tailwinds. April industry growth of 41% is a big booster of confidence. With prediction of a normal monsoon and good news on crop prices and production, we hope this sector will continue to flourish," said Nikhil Nanda, chairman and managing director of the firm.
Nanda said construction and railway sectors have also shown signs of improvement. With Government spending focus in these sectors, the situation shall only improve from here.
"Continued inflation is a big cause of worry, both in terms of suppressing potential demand as well as for ecosystem profitability”, Nanda added.
For the quarter, construction equipment sales stood at 1,286 units, down 19.8% from a year ago while Railway Product division revenue came in at Rs 172.8 crore, up 18% from Rs 173.9 crore a quarter ago. Order book for the Railway Product division, as at end of March 2022, was more than Rs 440 crore.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!