Upgrades

We continue to maintain our HOLD rating on the stock

Escorts’ 2QFY26 PAT at INR3.2b was below our estimate of INR3.7b due to a lower-than-expected margin improvement and lower other income. Both tractor and construction equipment margins were below our estimates.

We recommend a BUY on the stock with a TP of Rs 152 implying an upside of 10 from the CMP

Olectra Greentech's outlook for FY26 appears positive, supported by a strong order book of over 10,000 electric buses, planned production ramp-up, and technological advancements. The company aims to deliver 2,000 buses in FY26, with volumes expected to accelerate from Q2 and peak in H2 as supply chain bottlenecks ease and capacity utilisation improves. Management foresees steady revenue growth and rising profits with higher volumes. Key watchpoints include timely supply of key components like chassis and batteries, successful...

Escorts Kubota’s (ESCORTS) 1QFY26 PAT of INR3.1b was in line with our estimate. Tractor segment margins exceeded our estimates, whereas construction equipment (CE) margins came in below estimates.

With a pickup in rural demand and improved crop output, we anticipate early signs of recovery in tractor sales. Additionally, upcoming product launches in both the construction *over or under performance to benchmark index equipment and tractor segments are expected to support overall volume growth. Margins are likely to remain resilient at current levels, driven by easing raw material costs and ongoing cost optimization efforts. However, due to a slower-than-expected ramp-up in exports, the strategic benefits from Kubota's partnership in the agribusiness segment may take longer to materialize, reflecting the challenges in international markets. The near-term...

Management guided for revenue growth of 20% YoY with 150bps improvement in EBITDA margin in FY26. We revised our FY26/27E EPS by -3.4%/-3.6%, factoring in deferred orders and execution delays. BEML reported a strong quarter, with revenue growing 9.2% YoY and EBITDA margin improving by 110 basis points, supported by better material cost management and increased defence contributions. The FY25 order book stood at Rs140bn, below the guided ~Rs180bn due to delays in...

Q4FY25 revenue grew 6%/26% YoY/QoQ to Rs 119.1bn, aided by volume gains of 4%/27% YoY/QoQ, while realisations stay put

Q3 tractors volume rose by 25% YoY (combined volume from JV partners) aided by industry growth, realisation fell 13%

We maintain our HOLD rating on the stock.

We upgrade our rating from HOLD to BUY on the stock from a long term perspective

Despite muted volumes in 2Q, AL reported 100bps margin expansion to 11.6%
on sustained pricing discipline, material cost controls, and growth in the non-MHCV portfolio.

Q2 revenue was flat YoY at Rs 2.8bn, dragged by lower realisations of Rs 0.2mn down by ~1.3% YoY (13% MoM)

We upgrade Escorts to BUY from ADD with revised TP of Rs4,700/sh at 30x Sep26E PER (rolled over) + Rs320 cash/sh. The recently-concluded monsoons saw ~8% increase over the long period average, lifting the outlook for the upcoming crop cycles.

With limited upside potential at CMP, we maintain our HOLD rating on the stock.