Buy Escorts; target of Rs 180: SPA Securities

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26 Aug, 2025 12:21

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SPA Securities report on EscortsEscorts reported mixed set of results with topline coming largely inline with our estimates at INR 8017 mn but profit came in higher than estimates at INR 171 mn on the back of higher than expected decline in raw material cost. While Railways and Construction Equipment (CE) segment have shown decent improvement in performance, Agri- machinery segment is witnessing significant pressure because of scanty rainfall. We change our rating from Hold to Buy with target price of INR 180 based on 6.25x EV/EBITDA.Outlook & ValuationThe management's focus on increasing the sale of higher HP tractors is likely to improve the overall realization for Escorts. The outlook for its CE and Railway segment is also promising given the emerging opportunities in the respective sectors which should provide further boost to profitability. We expect top line & bottom line to grow at a CAGR of 4.0% & 65.1% respectively between FY15- 17E. We change our rating from Hold to Buy with target price of INR 180 based on 6.25x EV/EBITDA, says SAP The Financial research report.For all recommendations, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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