Motilal Oswal 's research report on Escorts
Escorts’ (ESC) 1QFY21 results were above estimates due to lower other expenses. While demand outlook was strong, the tractor industry is currently facing supply-side constraints, which should ease by mid-Aug’20. We have upgraded our FY21/FY22E EPS estimates by ~9%/7%, but are maintaining Neutral rating as the positives seem to be fully priced in.
Valuations at 17.8x/15.5x FY21/22E consol. EPS largely reflect the expected recovery. Maintain Neutral with TP of INR1,175 (~16x Jun’22E consol. EPS).
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