EScorts: Maintaining Good Growth Momentum

Dalal Street Investment Journal|June 22 - July 05, 2020

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EScorts:  Maintaining Good Growth Momentum
With its various divisions that cater to a wide range of products right from tractors to construction equipment to railway equipment, Escorts Limited has maintained steady equilibrium except for the impact of the virus pandemic

Escorts Limited is an engineering company offering agricultural tractors and construction equipment. The company conducts business in segments related to agricultural machinery, automotive ancillary products, railway equipment and construction equipment. It primarily engages in the business of manufacturing engines for agricultural tractors, earthmoving and material handling equipment, round and flat tubes, heating elements, double-acting hydraulic shock absorbers for railways coaches, centre buffer couplers and automobile shock absorbers.

Its operations also include the production of telescopic front fork and MacPherson struts, brake block, internal combustion engine and various types of brakes used by railways. Escorts also trades in oils and lubricants, implements, trailers, tractors, compressor accessories and spares, construction and aeronautical business. It offers Euro Series under Powertrac, Classic Series in 41-50 HP under Farmtrac brand and FT 6055 Xtra Torque Tractor with approximately 20-speed transmission.

Industry Overview India is considered as the biggest manufacturer of farm equipment. The country’s tractor industry makes up for almost one-third of the global market. During FY19, the domestic tractor industry grew by 8 per cent in volume terms to 7.9 lakh units compared to 7.3 lakh units in FY18. The growth in the construction equipment industry in India is positively backed by the Indian government’s plans and focus on developing infrastructure. Additionally, the government has also placed importance on being self-reliant on manufacturing of railway equipment needed for the railway infrastructure to improve urban-rural connectivity and increase the number of metro lines and metro rail projects.

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June 22 - July 05, 2020