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Hold Escorts; target of Rs 600: ICICI Direct

ICICI Direct recommended hold rating on Escorts with a target price of Rs 600 in its research report dated May 08, 2019.

May 09, 2019 / 03:03 PM IST
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ICICI Direct's research report on Escorts

Escorts reported muted performance in Q4FY19. Revenues increased by 13.6% YoY to Rs 1,632 crore but were impacted by realization hit due to adverse mix in tractor segment. Segment wise revenues; tractors up 12.5% YoY to Rs 1,231 crore, construction equipment up 10.2% YoY to Rs 293 crore, railway equipment up 36.1% YoY to Rs 104 crore. EBITDA in Q4FY19 grew 9.2% YoY to Rs 190 crore with consequent EBITDA margins at 11.6%, down 50 bps QoQ and YoY primarily tracking 120 bps sequential increase in other expenses. Consequent PAT stood at Rs 121.3 crore, up 7.8% YoY. In parallel, enhanced competitive intensity would result in limited scope for further margin gains at Escorts.


We value the company at 12.5x FY21E EPS of Rs 48.6/share, arriving at a target price of Rs 600 and assign a HOLD rating to the stock.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: May 9, 2019 03:03 pm

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