Escorts Kubota (ESCORTS) Q4 02/03 earnings summary

Executive summary

• FY03 standalone net sales fell to ₹767.92 crore from ₹1,081.03 crore as tractor wholesales dropped; investment income lifted total income to ₹998.11 crore.

• Standalone PBT rose to ₹22.26 crore from ₹5.01 crore and PAT to ₹24.04 crore from ₹8.13 crore, aided by investment-sale gains and dividends.

• Consolidated results showed a ₹153.00 crore attributable net loss versus ₹33.10 crore loss, largely reflecting associate losses and a deferred-tax asset reversal.

Financial highlights

• Standalone net sales were ₹767.92 crore versus ₹1,081.03 crore; income from investments reached ₹208.63 crore versus ₹53.92 crore.

• Standalone net profit included ₹140.63 crore net surplus on investment sales; adjusted for this item, the reported PBT and PAT were ₹22.26 crore and ₹24.04 crore, respectively.

• Consolidated external revenue was ₹1,697.18 crore versus ₹1,716.81 crore; attributable net loss was ₹153.00 crore versus ₹33.10 crore.

• Standalone basic and diluted EPS was ₹3.33 versus ₹1.13; consolidated EPS was a loss of ₹24.70 versus ₹4.59.

Outlook and guidance

• FY04 tractor-industry volumes were expected to remain near FY03 levels as dealer inventory and customer credit were corrected; retail recovery depended on a satisfactory monsoon.

• Export tractor turnover was targeted to double in FY04, supported by back orders and investments in US and Polish joint ventures.

• Construction equipment performance was expected to improve in FY04, supported by a healthy order position, planned product launches and road-building demand.

• Medium- to long-term agricultural demand was expected to support farm mechanisation; estimated tractor population need was ~7 million versus fewer than 3 million then.