In the latest shareholding data of escorts Rakesh Jhunjhunwala’s name is not on the list of public shareholders on the stock exchanges, as of March 2022.
As of December 2021, Jhunjhunwala held 7.5 million equity shares or 5.68% in Escorts. However, his name is no longer on the Escorts Q4FY22 shareholding list, which may mean that his holding is less than or exceeds 1% or around 1%.
Stock screeners and trendline platform for analysis shows that Jhunjhunwala’s share of Escorts is less than 1% on the chart. This means that Jhunjhunwala has booked his profits in the company during the period January-March 2022.
Jhunjhunwala has been holding Escorts shares since December 2015. During this he bought 11,225,000 equity shares or 9.16% of Escorts shares. However, since then Jhunjhunwala has changed his stake in the company either through buy or sell.
Escorts shares closed on Wednesday 1540.35 per flat as compared to previous close on BSE. Shares touch intraday high 1557.65 each and 1530.50 each respectively.
In the last five days, Escorts shares have lost over 18% on the BSE. were in shares 1,888 each on April 6 and has since improved sharply.
However, taking into account today’s closing price, Escorts shares have gained about 25 per cent in one year. were in shares 1,233.7 each on the same day last year.
On Escorts, Saji John, Senior Auto Analyst, Geojit Financial Services, said, “Due to the high base of last year and weak non-farm tractor demand, tractor wholesale numbers remain weak for the near term. We expect the situation next year. As agriculture indicators remain promising with early positive forecast for 2022 in the form of rabi sowing, good reservoir levels, favorable crop prices and normal monsoon, all support rural sentiments at present. The stock is trading at a 12% premium to its historical average.”
Escorts sales stood at 10,074 tractors in March 2022 as against 12,337 tractors sold in March 2021, a year-on-year decline of 18.3%. Last year’s performance was impacted by higher base and lower commercial demand.
Tractor sales declined by 32.8% to 21,895 units between January-March 2022 (Q4FY22) period as compared to 32,588 tractors sold in the same quarter last year. For the full year FY 2012, Escorts tractor sales fell 11.7% to 94,228 units from 1,06,741 units in FY11.
Last month, Escorts in its sales report said, “The tractor demand is expected to improve during the next year, due to increase in Rabi production, good level of reservoirs, along with increase in Union Budget allocation for rural and agriculture sector- With favorable crop prices, and a generally positive early forecast of the 2022 monsoon season, all support the sentiments of rural consumers. However, rising inflation remains a cause for concern.”
As of December 2021, the company has posted a consolidated net profit of 193.71 crore vs. 173.47 crore in Q2FY22 and 286.42 crore in Q3FY21. The company’s revenue from operations was 1,984.28 crore against 1,673.85 crore in Q2FY22 and 2,042.23 crore in Q3FY21.
For nine months, Escorts reported a net profit of 606.22 crore against 871.63 crore in the corresponding period of last year. Consolidated revenue from operations was on 4,785.67 crore vs. 7,014. 42 crores of the same period last year.
Where is Escorts stock looking ahead?
ICICI Securities Research Analysts Shashank Kanodia and Raghavendra Goyal in their report said they are positive on the on-boarding of the company as co-promoters of Kubota Corporation (Japan) with preferential allotment of new equity. 2,000 per share and resulting open offer. The duo said, “We remain positive on this growth, with Kubota being informed in the fields of farm equipment, mechanization and construction equipment. We see this as a winning combination and will expand the product offering at Escorts “
Further, the duo said in their note, “Given the low electronic content in the product offering at Escorts, we see that the company may only see gross margin pressure if commodity prices remain elevated at the current geopolitical tensions.” has been.”
“As a result, we revise our forward projections. However, given the low growth trajectory in our core tractor business, we downgraded the stock from BUY to HOLD and our agreement with Kubota Corporation before turning conclusively positive on the stock.” We look forward to big plans in collaboration. We value escorts at SOTP-based TP 2,050 (25x P/E on core FY23E-24E average EPS, 15% discount on Treasury stocks),” he added in his note.
Escorts is the fourth largest tractor manufacturer in the country (11.3% FY21 market share) and also deals in the domestic construction equipment, railway space. The tractor segment contributes 82 per cent to the company’s top-line front, while construction and railways contribute 11%, 7%, respectively. Escort is cash rich b/s having net cash positive 5,000 crore