The company had posted a net profit of Rs 271.3 crore in the corresponding period of the previous financial year.
Total revenue from operations during the quarter under review fell 15.8% to Rs 1,861.4 crore, on the back of a decline in sales of tractors and construction equipment.
Bharat Madan, Group CFO, Limited told ET, “Net profit last quarter declined due to the fall in sales volumes of both tractors and construction equipment. Margins were under pressure due to the sharp rise in input costs.”
While tractor volumes last quarter decreased 32.8% to 21,895 units, those of construction equipment sales dropped 19.8% to 1,286 units.
Escorts Limited registers nearly 70-72% of its revenues from the sale of tractors. Construction equipment chips in another 12-13%, and railways the remaining 6-7%. Outlook for all three business verticals is positive in the ongoing financial year, informed Madan, adding recovery has set in the market.
Chairman and Managing Director Nikhil Nanda elaborated the farm sector is seeing some positive tailwinds. “With prediction of a normal monsoon and good news on crop prices and production, we hope this sector will continue to flourish,” he said, adding the construction and railway sectors have also shown signs of improvement.
“With government spending focused on these sectors, the situation shall only improve from here, Nanda added.
However, he said continued inflation is a big cause of worry, both in terms of suppressing potential demand as well as for ecosystem profitability.
For the entire financial year (FY22), net profit fell 12.4% to Rs 765.6 crore. However, total revenues from operations grew 3.2% to Rs 7,152.7 crore.
Escorts said its Board of Directors has recommended a final dividend of 70%, at Rs 7 per share of the face value of Rs 10 for the financial year 2021-22.