Escorts Kubota Stock Jumps 3% as HDFC Mutual Fund Increases Stake
Escorts Kubota Stock : Shares of Escorts Kubota Limited, a leading player in the agricultural machinery, construction equipment, and railway systems sector, surged 3% in intraday trading after HDFC Mutual Fund increased its stake in the company. This development has strengthened investor confidence in the stock, which has shown steady growth in recent months.
Stock Price Movement
On Monday, Escorts Kubota’s stock climbed to an intraday high of ₹2,957.05 per share, reflecting a 3.02% increase from its previous close of ₹2,870.25. Although the stock later retreated slightly, it ended the day at ₹2,947 per share, maintaining an overall positive momentum.
With a market capitalization of ₹32,970.37 crore, the stock’s upward movement signals renewed investor interest, fueled by strong financial performance and strategic investments.
HDFC Mutual Fund Boosts Stake in Escorts Kubota
In a major investment move, HDFC Mutual Fund has increased its stake in Escorts Kubota Limited from 4.88% to 5.33%. This was achieved through the acquisition of 64,69,510 shares, representing 0.45% of the total voting capital.
As of February 27, 2025, HDFC Mutual Fund holds 1,11,87,77,540 equity shares in the company. This increased stake aligns with HDFC Mutual Fund’s long-term investment strategy and reflects confidence in Escorts Kubota’s growth potential. The acquisition was made through open market transactions, further solidifying HDFC’s position as a key institutional investor in the company.
Strong Future Outlook and Growth Prospects
Escorts Kubota has provided optimistic guidance for the coming quarters, supported by strong domestic and international demand.
- The company expects the domestic tractor industry to grow by 6% to 7% for the full year.
- For Q4 FY25, Escorts Kubota anticipates 14% to 15% growth, with steady momentum expected in FY26, largely dependent on monsoon patterns.
- In the export market, the company is aiming for double-digit growth, particularly in Europe, leveraging Kubota’s global network.
These growth projections indicate strong performance ahead, making Escorts Kubota an attractive investment opportunity.
Segment-Wise Performance
Agricultural Machinery Segment
- The total tractor industry volume, including domestic and export markets, reached 2.89 lakh units, registering a 12.7% YoY growth.
- Escorts Kubota’s tractor sales increased by 4.5% YoY, with a total of 32,556 units sold.
Construction Equipment Segment
- The construction equipment market, which includes cranes, backhoe loaders, and mini excavators, saw a 14% YoY growth.
- The company sold 1,989 units, slightly lower than 2,008 units in the previous year.
- However, revenue from this segment grew by 4.1%, reaching ₹515.7 crore.
- The EBIT margin improved from 8.1% to 11.0%, indicating enhanced profitability.
This positive trend showcases Escorts Kubota’s resilience and ability to expand across different business segments.
Recent Financial Performance
Escorts Kubota Limited reported strong financial growth in the latest quarter:
Financial Metric | Q3 FY24 | Q3 FY25 | Growth (%) |
---|---|---|---|
Revenue (₹ Crore) | 2,728 | 2,948 | 8.06% |
Net Profit (₹ Crore) | 299 | 321 | 7.36% |
This steady financial performance, coupled with HDFC Mutual Fund’s increased stake, has boosted investor sentiment and strengthened the company’s market position.
Key Financial Ratios and Market Data
Metric | Value |
---|---|
Market Cap | ₹32,955 Cr |
Current Price | ₹2,947 |
52-Week High / Low | ₹4,422 / ₹2,671 |
Stock P/E | 28.9 |
Book Value per Share | ₹879 |
Dividend Yield | 0.61% |
Return on Capital Employed (ROCE) | 16.1% |
Return on Equity (ROE) | 12.0% |
Face Value | ₹10.0 |
Promoter Holding | 68.0% |
Price-to-Book Ratio | 3.35 |
Debt-to-Equity Ratio | 0.01 |
Pledged Percentage | 0.00% |
Industry P/E | 28.9 |
Graham Number | ₹1,460 |
Intrinsic Value | ₹1,323 |
RSI (Relative Strength Index) | 37.1 |
Earnings Per Share (EPS) | ₹108 |
Number of Equity Shares | 11.2 Cr |
PEG Ratio | 1.69 |
200-Day Moving Average (DMA 200) | ₹3,454 |
Free Cash Flow (Last 3 Years) | ₹748 Cr |
Free Cash Flow (Last 5 Years) | ₹2,369 Cr |
Debt | ₹99.8 Cr |
Return on Assets (ROA) | 9.75% |
Conclusion
The 3% jump in Escorts Kubota’s stock following HDFC Mutual Fund’s increased stake highlights strong investor confidence in the company’s future. With robust financials, positive growth projections, and expanding market share, Escorts Kubota remains a key player in the agricultural and construction equipment industry.
Investors looking for a long-term growth stock in the automobile and machinery sector may find Escorts Kubota Limited an attractive option, given its strong fundamentals and strategic partnerships.
As the company continues to expand both domestically and globally, it remains well-positioned for sustained growth in the coming years.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.