India's Escorts Kubota's Profits Fall in Q3 Due to Lower Tractor Demand

Published - 09 Feb 2024

Escorts Kubota, a prominent player in India's tractor market, has reported a shortfall in its third-quarter profit expectations due to a decline in tractor demand. The company's performance during this period was adversely affected by various factors, reflecting the broader challenges faced by the agricultural machinery sector.

Indian tractor manufacturer Escorts Kubota Ltd reported a third-quarter profit that was lower than expected due to reduced demand, despite cost reductions. Standalone net profit increased by nearly 49% to 2.77 billion rupees, falling short of analysts' expectations of 2.82 billion rupees. Tractor sales were down 7.2% from a year ago, with 25,999 units sold.

Revenue rose by 2.5% to 23.20 billion rupees, marking the slowest growth since at least March 2022. The agri-machinery products segment, which makes up over 70% of total revenue, decreased by 2.9%.

Revenue from the construction equipment segment increased by 49.4%, while that from railway equipment decreased by 17.8%. The cost of materials consumed, which represents the majority of total expenses, decreased by nearly 8% to 12.93 billion rupees.

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