Escorts Kubota Ltd. share price target

We continue to maintain our HOLD rating on the stock.

Slightly above our estimated Rs3.12bn, Escorts’ Q1 EBITDA grew 3% y/y to Rs3.35bn due to better-than-expected agri-machinery margins (lowerthan-expected input/employee cost).

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...

Escorts Kubota’s (ESCORTS) Q4 results were ahead of our estimates, with better-than-expected margins in the tractor segment. Both MM and tractors reported a healthy margin revival QoQ in a seasonally weak quarter.

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.

Escorts’ Q3 PBT (incl. discontinued operations) grew 7% y/y to Rs4.2bn, below ARe of Rs4.4bn mainly due to less-than-expected agri machinery margins.

Escorts (EKL) logged a strong Q3 with 8.5% growth in revenue from continued operations and 110bps QoQ EBITDA margin expansion to 11.4%. EKL has guided to robust domestic tractor industry outlook for 4Q (~15% YoY growth).

Q2 tractors volume fell by 1% YoY (combined volume from JV partners post amalgamation) despite healthy industry growth

We maintain our HOLD rating on the stock

Escorts Kubota’s (ESCORTS) 2QFY25 operating performance was stable YoY as the company reported flattish revenue/EBITDA growth YoY.

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.

Q1 tractors volume dipped 3.2% YoY as weakness persisted in export markets and domestic market lost market share

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

Escorts Kubota (ESCORTS)’s 1QFY25 result was largely in line with our estimate. While the Agri and Railway segment margins were slightly down YoY.

Q4 tractor volumes dipped 14% YoY, with domestic share recovered but overall market share recovery weak as exports volume declined