ESCORTSNSEQ1 FY'26August 08, 2025

Escorts Kubota Limited

8,120words
119turns
13analyst exchanges
6executives
Management on call
Bharat Madan
WHOLE-TIME DIRECTOR & CHIEF FINANCIAL OFFICER, ESCORTS KUBOTA LIMITED
Neeraj Mehra
CHIEF OFFICER, TRACTOR BUSINESS DIVISION, ESCORTS KUBOTA LIMITED
Sanjeev Bajaj
CHIEF OFFICER, CONSTRUCTION EQUIPMENT BUSINESS DIVISION, ESCORTS KUBOTA LIMITED
Sanjeev Garg
HEAD FINANCE & TAX, ESCORTS KUBOTA LIMITED
Prateek Singhal
INVESTOR RELATIONS & ESG, ESCORTS KUBOTA LIMITED
Vivek Kumar
ICICI SECURITIES
Key numbers — 40 extracted
Rs. 2,483.4 crore
ce for the quarter-ended June 2025 are as follows: Operating revenue from continuing operation at Rs. 2,483.4 crores. EBITDA at Rs.325 crores, up by 2.6% YoY. The EBITDA margin in Q1 now stands at 13.1%, up 69 bps
Rs.325 crore
25 are as follows: Operating revenue from continuing operation at Rs. 2,483.4 crores. EBITDA at Rs.325 crores, up by 2.6% YoY. The EBITDA margin in Q1 now stands at 13.1%, up 69 bps YoY. PBT, before excepti
2.6%
Operating revenue from continuing operation at Rs. 2,483.4 crores. EBITDA at Rs.325 crores, up by 2.6% YoY. The EBITDA margin in Q1 now stands at 13.1%, up 69 bps YoY. PBT, before exceptional items fr
13.1%
s. 2,483.4 crores. EBITDA at Rs.325 crores, up by 2.6% YoY. The EBITDA margin in Q1 now stands at 13.1%, up 69 bps YoY. PBT, before exceptional items from continuing operation at Rs.417.9 crores, up by
69 bps
crores. EBITDA at Rs.325 crores, up by 2.6% YoY. The EBITDA margin in Q1 now stands at 13.1%, up 69 bps YoY. PBT, before exceptional items from continuing operation at Rs.417.9 crores, up by 19.3% YoY.
Rs.417.9 crore
Q1 now stands at 13.1%, up 69 bps YoY. PBT, before exceptional items from continuing operation at Rs.417.9 crores, up by 19.3% YoY. During the quarter, there was an exceptional gain of Rs.76 crores on account o
19.3%
up 69 bps YoY. PBT, before exceptional items from continuing operation at Rs.417.9 crores, up by 19.3% YoY. During the quarter, there was an exceptional gain of Rs.76 crores on account of sale of land
Rs.76 crore
eration at Rs.417.9 crores, up by 19.3% YoY. During the quarter, there was an exceptional gain of Rs.76 crores on account of sale of land and building of Agri Machinery Spare Parts Business Division. Net pro
Rs.372.6 crore
building of Agri Machinery Spare Parts Business Division. Net profit from continuing operation at Rs.372.6 crores, up by 40.0% YoY. During the quarter, the RED's business divestment was concluded and the income
40.0%
ery Spare Parts Business Division. Net profit from continuing operation at Rs.372.6 crores, up by 40.0% YoY. During the quarter, the RED's business divestment was concluded and the income of Rs.1,601.7
Rs.1,601.7 crore
p by 40.0% YoY. During the quarter, the RED's business divestment was concluded and the income of Rs.1,601.7 crores, net of transition cost from the divestment has been accounted for in the financial statement un
Rs.1,400.2 crore
inancial statement under discontinued operations. Net profit including discontinued operations at Rs.1,400.2 crores. Escorts Kubota Limited EPS stands at Rs.127.29 as compared to Rs.27.63 YoY. On consoli
Advertisement
Guidance — 20 items
Vivek Kumar
opening
“On behalf of ICICI Securities Limited, I welcome you all for Escorts Kubota Limited's Q1 FY26 Earnings Conference Call.”
Prateek Singhal
opening
“Moving on to the “Segmental Business Performance”, starting with Agri Machinery Business: On tractor business, in Q1 FY26, the total tractor industry volume domestic plus export was at 3.11 lakh tractors, up by 8.7% against corresponding quarter last year.”
Prateek Singhal
opening
“On the domestic front, the tractor industry in Q1 FY26 was at 2.86lacs tractors, up by 9.2% against the corresponding quarter last fiscal.”
Prateek Singhal
opening
“The impact of this launch will be visible in the next quarter.”
Prateek Singhal
opening
“Going forward, we will be launching the Wetland series in the coming quarters under Powertrac brand.”
Prateek Singhal
opening
“We remain optimistic about sustained growth in the tractor industry and expect the current momentum to continue to the later part of the current fiscal.”
Prateek Singhal
opening
“Escorts Kubota Limited On the export front, the tractor industry in Q1 FY26 had 25.3K tractors, up by 2.7% as against 24.6Ktractors in the corresponding quarter.”
Prateek Singhal
opening
“Non-tractor revenue comprising agri solutions business, engine business, and service and spare parts business in Q1 FY26, constitute 18% of the agri machinery segment revenue against 19% in the corresponding and the sequential quarter.”
Prateek Singhal
opening
“Coming on to the “Construction Equipment Business”: In Q1 FY26, served industry volume comprising crane, backhoe-loaders, mini-excavator, and compactor was down approximately 14% as against corresponding quarter last year.”
Prateek Singhal
opening
“The construction equipment market is facing challenges due to decreased construction activities during the monsoon season, project delays and slow sales caused by high product pricing following changes in the emission norm.”
Risks & concerns — 7 flagged
The impact of this launch will be visible in the next quarter.
— Prateek Singhal
So, I think the pipeline is very strong, and we should see our market share growing in our erstwhile weak markets.
— Neeraj Mehra
Till the time we do that, the margins will continue to be under pressure under Kubota brand name.
— Bharat Madan
See, we get the impact of the commodity prices only with the lag of a quarter.
— Bharat Madan
This quarter, like you said, since this was a temporary impact of cut down on the production and also liquidation of inventory, the impact came.
— Bharat Madan
So, the impact of both combined is reflected in the other income.
— Bharat Madan
So, that is another concern for us, but we are working on that.
— Neeraj Mehra
Advertisement
Q&A — 13 exchanges
Q
Thank you, sir, for the opportunity. Sir, starting with exports for tractors, it has been a very strong performance; in the first four months, there is a 63.5% growth. Can you talk about what is helping the strong exports? How do you see the outlook for this year?
Bharat Madan
Yes, thanks, Raghu. This is Bharat Madan. So, I think if you look at the numbers, the last year our base was very low on export in this first three months. That is why you are seeing almost 80% growth coming in. But if you look at the numbers now, we have stabilized export at about 500-600 tractors per month. So, we expect similar momentum will continue in the balance of the year. So, it indicated we will be looking at 25%-30% growth this year and the total export volume over last year. But now, since the base will also keep on improving for the last year numbers, so maybe the growth rate will
Q
Good afternoon, sir. Thank you for this opportunity. I have just two questions to ask. The first one is related to exports. What percentage of export revenue is routed to Kubota Network? And what is our target of export revenue as a percentage of total revenue by FY27?
Bharat Madan
I think as Prateek mentioned in the opening comments, in the first quarter, 52% of the exports happened to Kubota Network and we expect the number will only keep on improving as we move forward in the future. I think overall, right now, our total export revenue is quite low; it is about 5- 6% only for the total top line. But our mid-term business target for next 4-5 years is to take it to about 15% level. Sir, can you please repeat the number again, 15-16%? So, right now, it is 5-6%. But going forward in the mid-term business plan, our target is to take it to 15% level. Okay. Sir, my second qu
Q
Yes. Thank you so much for the opportunity, sir. Sir, can you just update what kind of a tractor industry growth expected for this year from earlier guidance of mid to high single digit? And with the second half, particularly the base catching up, will it be still a positive trajectory or do you see it flatten out in the second half, sir?
Neeraj Mehra
Hi, Mumuksh. So, we stick to our earlier guidance of mid to high single digit growth for the entire year. Last year, the base was very high. So, in H2, the industry growth last year was close to about 15%. So, this continuous growth in H2 might not be there. It will actually depend on how the sowing Escorts Kubota Limited season performs. So, the tractor season this year actually starts from August instead of September, and hopefully, the entire season would be over by the end of October. So, post the season, actual picture will emerge on how the industry will actually end for the current fisc
Q
Sir, thank you for taking my question. Sir, a couple of questions. First is on the channel expansion. Can you comment on network expansion of Kubota in North India and Escorts in South India? And how is it working with existing Escorts and Kubota dealer in the respective regions?
Neeraj Mehra
Hi, Vipul. This is Neeraj again. So, yes, we are working on the three brands, Powertrac, Farmtrac and Kubota. So, I will take a couple of minutes to explain. Powertrac to a very large extent is a pan- India brand. We do have white spaces in the south and some states in the eastern part. Kubota and Farmtrac to a very large extent are very regional-specific and the focus at the moment is on both these brands to expand the reach. So, currently, the integration is not there full hog. We are thinking of integrating on how the Kubota dealers in south can be integrated with either the Powertrac or th
Q
Sir, thanks for the opportunity. Sir, first of all, congrats for the good margin performance. Sir, my question is basically from the previous participant on the farm implements thing. So, at present, are we outsourcing this or we are making it in-house?
Bharat Madan
No, we are only buying it from third-party. So, the large part is actually imported from Kubota. With the harvesters and transplanters, we are importing from Kubota from Thailand, Japan and China. So, only the implement part, the rotavators, etc., that we are sourcing locally, the boom sprayers, baler, etc., they are all being sourced locally through the third-party arrangement. We are not making anything in-house right now. Right. And just if you can help us with the annual revenue number for this farm implements? I think last year was about Rs.600 odd crores. So, we expect the number will be
Q
Yes, sir. Thank you for the opportunity and congratulations on a very strong operating performance. So, my first question is on market share for this. Despite launching new products, of course, it is in a very initial stage. Our market share continues to slide. So, is it related to the market competition or anything to do with the inventory correction? And similarly, inventory is now also as indicated by Neeraj around four and a half weeks compared to industry inventory would be somewhere 47-48 days. So, we are much better off. So, now onwards, where do you see market share bottoming out?
Neeraj Mehra
So, hi, Mitul. Neeraj this side. So, you have spoken of the product introductions. So, the product introduction happened in the fourth quarter which was the Promaxx series. And as I have mentioned in my earlier comments, Farmtrac market share is gradually increasing.
Q
Thank you, Mitul. As regards to Kubota and Powertrac, there is no as such new product introduced in the past. This month only we have introduced Kubota, the 42 HP series and certain changes in the higher HP ones. And as mentioned earlier, the Wetland series is planned for introduction in September end, early October. So, the results of that we will actually see coming in from Quarter 4 as well as in the next year. As regards to the market share, yes, the market share has to a certain extent declined. Apart from various other factors, one of the key reasons is the industry swing. The industry s
Mitul Shah
As you said rightly, last year September onwards, industry started growing and particularly from October onwards, it was a very high growth from South and West. So, now October onwards, probably this disparity between South and West and the other regions may not be there. So, that is also quite positive as we have also got impacted because of the regional disparity in growth. So, considering that, second half, how one should look at compared to first half for the industry in terms of the… as we know, it would be like flat to marginal growth, but disparity-wise, what is your view on the regiona
Q
Yes. Hi. Thanks for taking my question. Just a couple of follow-ups. On the export side, I do read some of the European markets stepping up now. So, can you just talk about the opportunity there, what is it that we are trying to do along with Kubota in the European markets?
Bharat Madan
So, Gunjan, as I mentioned, most of our exports are happening to European market only, and there we are seeing a good order inflow coming in from Kubota network. So, we expect the numbers should keep improving month-on-month as we enter those markets. Okay. Okay. Got it. When I look at the export business, I think there were two or three parts to it. One was like you will continue to grow on the emerging markets or Mexico, etc., which you were already working on. And then when Kubota comes in, US and Europe were going to be the largest markets. Now, if you were to just like sort of lay the opp
Q
Thank you for the opportunity again, sir. I have two-three follow-up questions. First one was in the last quarter, 70% of exports was routed through Kubota market. However, this quarter, as you mentioned, it was 52%. Is there any change that you can mention?
Bharat Madan
No, it depends on the order inflows because we also have been exporting to other markets where Kubota network is not existing. They were our earlier distributors, which we continue to export. So, it all depends on the network and the order intake you get from various countries. So, it can vary. But the larger part is still going to the Kubota network. Escorts Kubota Limited My second question was sales growth on the year-on-year. If you can give us a target that we are planning to achieve for FY26? Sorry, can you repeat your question? It was not very clear. Sir, my question was regarding the s
Q
Hi, thank you for taking my question. Maybe partly repetitive, but regarding the medium-term 15% target for export, are there any specific initiatives that you are taking for this?
Bharat Madan
Yes, so as we mentioned, I think there are multiple levers which we are deploying now. One, obviously is the export of the finished products which we are doing from India. As we mentioned, the numbers of export to Kubota is continuously increasing and that will continue to happen in the future too. The second, as we talked about is the component sourcing from India, which is also getting increased as the vendor base gets established there. And third is the service export which we will be doing, which essentially is setting up the shared services for them in India, both for R&D as well as for I
Q
Yes, hi, thanks for taking my question again. I just had a clarification that you now mentioned that 20% of your agri-machinery revenues are non-tractor, right? Is it possible to get a rough breakup of what is it from, let's say, engine, implements, spares, just rough idea would help because I think these are all revenue lines which are growing faster, I would think?
Bharat Madan
Spares and lubricants which is the larger part there. Then, the agri-solutions which is farm equipment bit and the engine is still the smaller part. So, all these three combined to give out 18-20%. Escorts Kubota Limited So, spares would be what, 10-12%? Yes, roughly 10% you can say. Okay. And engine would be a low single digit? Yes, engine is still low, and the numbers were not very high there. So, I think last year we did about 20,000 engines and probably similar. Last year, there was a change of emission norms, a lot of pre- buying happened in the first quarter last year. So, this year, pos
Q
Yes, Bharat, hi. Bharat, you might have answered this question earlier, but I was just wondering one thing. I was going through the presentation. You have 1,600 dealers now with Kubota also coming in. So, should not your access to the southern markets and all get slightly better so that you can have your market share improve now, like with the new products and everything in place?
Neeraj Mehra
So, hi, Amit ji. This is Neeraj Mehra this side. So, yes, you are very right. With the 1,600 dealers in place, our volume will actually improve as we said in our earlier comments. We are introducing a south special series in Powertrac in the last week of September or early October. So, that should actually help Powertrac. Currently, in the Powertrac and Farmtrac series, the product range suitable Escorts Kubota Limited for paddy applications was an issue. With this range coming in and with a substantial number of dealers being there, we should see the volumes and market share growing. Okay. Th
Q
Thank you, ladies and gentlemen, for being present on this call. For any feedback or queries, feel free to write to us at investor.relation@escortskubota.com. Thank you very much and have a good evening.
Management
Speaking time
Bharat Madan
32
Moderator
15
Neeraj Mehra
13
Gunjan
13
Vaishnavi
8
Amit Hiranandani
8
Raghunandan
7
Mumuksh Mandlesha
6
Vipul Agarwal
5
Mitul Shah
4
Advertisement
Opening remarks
Vivek Kumar
Thank you, Pari. Good evening. On behalf of ICICI Securities Limited, I welcome you all for Escorts Kubota Limited's Q1 FY26 Earnings Conference Call. I also take this opportunity to welcome the Management Team from the Company. Today, we have with us Mr. Bharat Madan – Whole-Time Director and Chief Financial Officer, Mr. Neeraj Mehra – Chief Officer, Tractor Business Division, Mr. Sanjeev Bajaj – Chief Officer, Construction Equipment Business Division, Mr. Sanjeev Garg – Head Finance & Tax, and Mr. Prateek Singhal – Investor Relations & ESG. We will start the call with “Brief Opening Remarks” from the Management followed by “Q&A.” Before we start, I would also like to add that some of the statements made by the Company in today's call will be forward-looking in nature and are subject to risks as outlined in the annual report and investor releases of the Company. Over to the “Management now for their Opening Remarks.” Thank you.
Prateek Singhal
Thank you, Vivek. Good evening, everyone and thank you all for joining us today. Few highlights of the Company's standalone financial performance for the quarter-ended June 2025 are as follows: Operating revenue from continuing operation at Rs. 2,483.4 crores. EBITDA at Rs.325 crores, up by 2.6% YoY. The EBITDA margin in Q1 now stands at 13.1%, up 69 bps YoY. PBT, before exceptional items from continuing operation at Rs.417.9 crores, up by 19.3% YoY. During the quarter, there was an exceptional gain of Rs.76 crores on account of sale of land and building of Agri Machinery Spare Parts Business Division. Net profit from continuing operation at Rs.372.6 crores, up by 40.0% YoY. During the quarter, the RED's business divestment was concluded and the income of Rs.1,601.7 crores, net of transition cost from the divestment has been accounted for in the financial statement under discontinued operations. Net profit including discontinued operations at Rs.1,400.2 crores. Escorts Kubota Limited E
Advertisement
← All transcriptsESCORTS stock page →