Escorts Kubota hosted a conference call on Feb 10, 2025. In the conference call, company was represented by- Mr. Bharat Madan: Chief Financial Officer, Mr. Neeraj Mehra: Head of Farmtrac & Powertrac Sales and Mr. Sanjeev Bajaj: Chief Officer of Construction Equipment Business.

Key takeaways of the call

In Q3 FY25, tractor volume stood at 32,556 units, up by 4.5% YoY. Construction Volume decreased 0.9% YoY to 1989 units.

During 9M FY25, tractor volume stood at 88,921 units, down by 0.8% YoY. Construction Volume decreased 8.1% YoY to 4765 units.

The profitability of the Railway Equipment division is shown separately as discontinued operations. The financial statements for prior periods have been adjusted accordingly.

In Q3 FY25, EBITDA margin fell due to inflation & Lower non-operating income. Going forward, management expects margin to improve.

The company expects the domestic tractor industry to achieve mid-single-digit growth in FY25. Management anticipates a short-term impact on construction equipment volumes due to the new CEV-V norms that started in January 2025. Additionally, management anticipate a 10% cost increase for products transitioning from Stage 3 to Stage 5 and a 5-6% cost rise for products moving from Stage 4 to Stage 5.

Management reported that its new product contribution has improved.

The company has recently launched new tractor models to drive growth. Management expects gradual improvement in market share over next six months.

Global tractor OEMs are increasing tractor and component sourcing from India, driven by factors like cost, supply chain resilience, and India’s extensive capabilities in the less than 70 HP category.

In Q3 FY25, PNC tractor Volume grew 3% YoY compared to industry growth of 4.2% YoY. BHL tractor volume decreased 16.5% YoY, and Mini Excavator volume fell 10.2% YoY.

In Q3 FY25, the company’s domestic tractor volume increased 6% YoY compared to industry growth of 13.5% YoY.

During 9M FY25, the company’s domestic tractor volume increased 0.5% YoY compared to industry growth of 4.9% YoY.

In Q3 FY25, the company’s export tractor volume registered fall of 29.2% compared to industry growth of 3.9%. Export through Kubota channel contributed 27% to total Export volume in Q3 FY25.

During 9M FY25, the company’s export tractor volume registered fall of 26.2% compared to industry de-growth of 0.1%.

In Q3 FY25, Less than 40 HP contributed 32% to Agri Machinery sales and Greater than 40 HP contributed 68%.

The company had more than 1,540 exclusive dealers for EKL brand of tractor in India at end of 31 Dec 2024.

In Q3 FY25, Capacity utilization of EAM segment was around 60% and capacity utilization of Construction Equipment segment was around 95%.

During 9M FY25, Capacity utilization of EAM segment was around 70% and capacity utilization of Construction Equipment segment was around 75%.

The board declared an Interim Dividend of Rs 10 per fully paid-up equity share of Rs 10 each for the financial year 2024-25. Record Date for the purpose is February 14, 2025.