This S&P BSE 500 stock is midcap with a market cap of Rs. 34,409 crore. On Thursday, the company’s shares opened flat and is 7% away from 52 week high and has been experiencing strong momentum since late March 2023, rising 52% since.

The shares of this stock are trading at Rs. 3114.00 which is at its 20 day moving average and 38% above its 200 day moving average.

In a filing dated 20th September 2023, Escorts Kubota Ltd (“Escorts Kutoba”) announced that the Board of Directors at its meeting held on the day approved the proposal to incorporate a Wholly Owned Subsidiary Company as a Non-Banking Financial Company, to finance the Company’s Products/ Customers in India.

The proposed company shall be incorporated with the Authorized Capital of Rs. 700 Crore and the Board has approved the infusion of capital up to Rs. 200 Cr. as and when required as per the business plan of the proposed company. 

The company’s revenue has, although been increasing the past few years, has seen decline in margins by close to 400 bps. An effective and cost efficient financing solution to customers may provide better margins via premiumization of the portfolio and price hikes leading to value addition.

Details of such translations are yet to be seen. In FY23, the company’s revenue grew 17% YoY from Rs. 7,152.68 crore to Rs. 8,344.95 crore while Net Profits saw a degrowth of 21% YoY from Rs. 765.61 crore to Rs. 606.98 crore.

Escorts Kubota manufactures and sells agri machinery, construction equipment, and railway equipment in India and internationally. As the leading producer of material handling and construction equipment, Escorts Kubota creates and sells a wide variety of tools like tractors, cranes, loaders, vibratory rollers, and forklifts.

The business is now the biggest producer of pick-and-carry hydraulic mobile cranes in the world. The company’s shareholding comprises 68% promoter holding, 6% and 10% respectively held by FIIs & DIIs and the rest being held by the public. 

Written by Sandeep R


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