Escorts PAT rises by 6% despite drop in revenue

Auto and equipment manufacturer Escorts profit rose marginally by 6% to 36.27 crore in Q1FY16 as against Rs 34.11 earned during same period last year. During this period the company’s total revenue declined by around 13% and dropped to 989 crore as against Rs 1139 crore earned during quarter ending June last year. On one hand the company’s other operating income declined from Rs 7 crore to Rs4.51 crore, whereas the finance remained stagnant at Rs 13.74crore.

On the segment basis the biggest jolt to the company came in the agri machinery product segment, which was impacted by slow pick up of monsoon and revenue from this segment declined from Rs946 crore earned during Q1FY15 to Rs812 crore  Q1FY16. Profitability of this segment also declined from Rs 78 crore to Rs 73 crore during this period. Importantly the company is earning more than 80% of its revenue from this segment. The Construction Equipment segment also remained a drag for the company as revenue from this segment also declined 121 crore earned during quarter ending June 30, 2014 to Rs 93 crore this year. Due to a slowdown in real estate and infrastructure sector, profitability of this segment also got hit. In fact the company posted a loss of Rs11 crore in this segment during quarter ending June, whereas it had posted a loss of Rs9 crore during the same period last year. 

Some positive news for the company came from Railway Equipment segment where company earned a revenue of Rs 49 crore during first quarter as against Rs 43 crore earned during same period last year, a growth of 14%. Profitability of this segment also rose from mere Rs 1.62 crore earned during Q1FY15 to Rs 6.32 crore in the current fiscal, showing a growth of 270%. Going forward it seems that company’s revenue from agri machinery segment will improve as off late as the monsoon is getting better.