Motilal Oswal's research report on Escorts Kubota
Escorts Kubota (ESC)’s 4QFY23 performance surprised us as better-thanestimated gross margin led to EBITDA beat at INR2.4b (v/s est. INR2.0b). FY24 domestic tractor volumes are likely to post low-to-mid single digit growth, despite weak 1QFY24, due to: a) good MSP prices, b) high water reservoir levels, and c) healthy growth in non-agri tractor sales.
Outlook
We raise our FY24E/FY25E EPS by 7.5%/6.6% to factor in margin expansions in all the verticals. Retain Neutral with a TP of INR1,900.
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