The share price of Escorts jumped 7 percent intraday on January 30 after the tractor-maker reported a 9.27 percent increase in net profit at Rs 153.1 crore for the third quarter ended December 31, 2019. The company had reported a net profit of Rs 140.1 crore for the same period the previous financial year.
Revenue from operations, however, declined to Rs 1,633.4 crore during the quarter against Rs 1,655.1 crore in the corresponding period last fiscal, Escorts Ltd said in a statement.
Research firm HSBC has initiated a buy rating on the stock and has raised the target to Rs 900 from Rs 830 per share.
It is of the view that a strong margin recovery in Q3 should allay street concerns and improving growth and margin outlook should drive upgrades to estimates.
HSBC expects tractor industry’s to record a growth in low single digits in Q4, which would be a steady improvement.
Escorts expects the industry to grow in FY21 and sees a stronger recovery in FY22
Commenting on its Q3 results, Escorts Chairman and Managing Director Nikhil Nanda said "We are continuing our journey of providing unique and innovative technology solutions for maximising agriculture yield, bring in efficiency in the construction equipment space and make rail transport safer."
At its board meeting on January 29, Escorts appointed Tanya Dubash an independent director for a period of five years. It also named compliance officer Satyendra Chauhan as the company secretary.
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