Escorts posts decent Q1, but high valuations temper excitement
Escorts's Q1 FY21 operating profitability improved, thanks to soft raw material prices, a rich product mix and operational efficiency
July 28, 2020 / 09:57 AM IST
PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook
Escorts Ltd (CMP: Rs 1098.5, Mcap: Rs 14,474 crore) posted a decent performance in the first quarter of FY21 amid weakness due to the Covid-19 breakout. Although net revenues declined, operating profitability improved thanks to soft raw material prices, a rich product mix and operational efficiencies.
The company continues to be in a sweet spot as it caters to rural areas which are less affected by Covid-19. Though the company’s strong position in the domestic market and new product launches...