Escorts Kubota (ESCORTS IN): Hold: Margins miss but demand outlook improved

研报英文原文证据摘录

Escorts Kubota (ESCORTS IN): Hold: Margins miss but demand outlook improved

revenue/EBITDA/PAT CAGRs at c8/7/7% over FY26-FY29e. 52-WEEK PRICE (INR)

4200.00

Impact of El Niño: Kharif crop sowing (June-July) in FY27 is 3% lower than FY26 on the

back of weaker monsoons and lower reservoir levels. Current reservoir levels are 7% 3350.00

below the 10-year average and rainfall is 12% lower than the long-term average (exhibits 2500.00

08/25 02/26 08/26

2-3). A strong El Niño can pose downside risk to tractor industry volume growth. Target price: 3300.00

High: 3962.10 Low: 2724.70 Current: 3135.50

Conference call takeaways: Demand: Management revised industry growth guidance Source: LSEG IBES, HSBC estimates

to mid-single digits for FY27 and maintains EKL to outperform the industry. Dealer

Yogesh Aggarwal*

inventory is 30 days and it expects an increase before festive demand kicks in. Capex for Head of Research, India

greenfield plan is INR20bn, with INR5bn in FY27. CE business is expected to grow 12- HSBC Securities and Capital Markets (India) Private Limited yogeshaggarwal@hsbc.co.in

15% in FY27, led by mini excavators and cranes. Captive finance penetration was 10- +91 22 2268 1246

12% in 1QFY27 and it plans is to reach 50% by FY27 and pan-India by FY28. Vipul Agrawal*, CFA

Analyst, India Automotive

1QFY27 results: Revenue grew 28% y-o-y to INR31.8bn and EBITDA margin HSBC Securities and Capital Markets (India) Private Limited

vipul.agrawal@hsbc.co.in

decreased 190bp to 11.2%. As expected, gross margin declined by 380bp q-o-q but +91 97690 51842

was offset by sequential decreases of 60bp in staff costs and 130bp in other Ayush Jhunjhunwala*

expenses. Tractor revenue increased 26.8% y-o-y. Tractor ASP grew 1.1% q-o-q to Analyst, Autos and Auto Ancillary