Escorts (ESC) has delivered a healthy performance across parameters in 2QFY19 with betterthan-expected operating margin across business segments despite a challenging business environment. Its revenue, EBIDTA and adjusted PAT grew by 15%, 12% and 25% YoY, while sequentially declining by 8%, 15% and 14% (due to seasonality) to Rs13.98bn, Rs1.58bn and Rs1.03bn vs. our estimate of Rs13.1bn, Rs1.44bn and Rs0.96bn, respectively. Its EBIDTA margin fell by 37bps YoY and 101bps QoQ to 11.3% (vs. our estimate of 11%). While tractor volume grew by just 3.3% YoY, volume of construction equipment and revenue from railway segment rose by a strong 37% YoY and 45% YoY, respectively. Its RM/sales increased by 81bps YoY (-12bps QoQ) to 67.5%, while other expenses/sales rose by 102bps YoY and 106bps QoQ to 13.2%. Its...