Escorts Kubota (ESCORTS) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 saw strong revenue and profit growth, with operating revenue rising 11.1% YoY to INR 3,261.4 crore and EBITDA up 30.9% YoY, marking the highest ever quarterly EBITDA.

• Net profit from continuing operations reached INR 362.4 crore, up 24.7% YoY; adjusted for a one-time labor code impact, net profit was INR 401.6 crore, up 38.3% YoY, also a record high.

• Board declared a one-time special dividend of INR 18 per share following the railway business divestment.

• The company completed the sale of its railway equipment division and integrated two Kubota entities, impacting reported figures.

• Approved phased investment for land acquisition and a new greenfield plant to expand production capacity.

Financial highlights

• Standalone revenue from operations for Q3 FY26 was INR 3,261.4 crore, up 11.1% YoY; standalone EBITDA margin improved by 203 bps YoY to 13.5%.

• Consolidated revenue from continuing operations was INR 3,280.5 crore, up 11.3% YoY; consolidated EBITDA margin at 13.3%, up 91.96 bps YoY.

• Reported consolidated net profit was INR 358.3 crore, up 11.8% YoY; normalized profit (excluding labor code impact) grew 38.1% YoY.

• Standalone basic EPS for Q3 FY26 was INR 32.93, up from INR 26.41 in Q3 FY25.

• Exceptional expense of INR 52.5 crore in Q3 FY26 due to new labour code implementation.

Outlook and guidance

• Tractor industry expected to reach a new peak of 11.5 lakh units in FY26, driven by favorable agri conditions, lower GST, and higher MSP.

• Greenfield project to enhance tractor capacity by 60,000 units and construction equipment by 15,000 units per annum within 7 years, with an initial investment of INR 593 crore and total outlay of INR 2,268 crore.

• Robust growth anticipated in Q4 and Q1, with cautious optimism for FY27 due to high base and dependency on monsoon and subsidies.

• Export momentum expected to continue with double-digit growth, even as base rises.

• Construction equipment sector expected to stabilize and improve, supported by increased government capex.