Escorts Kubota Q1 FY27 Results (NSE: ESCORTS)
Signal: Growth reaccelerated
The read
The operating trajectory improved sharply to ₹3207.55 Cr revenue, +28.3% YoY, but the margin thesis is mixed: cost of materials rose to 59.5% of revenue from 49.3%, while the apparent PAT collapse is largely non-comparable because Q1FY26 included a ₹1004.37 Cr RED Business disposal gain; continuing PAT grew 4.5%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,207.55 Cr | +28.3% | +8.1% |
| EBIT | ₹497.33 Cr | N/A | |
| Net profit | ₹385.93 Cr | -72.4% | |
| EPS | ₹35.08 | +4.4% | |
| EBIT margin | 17.5% |
P&L walk
Revenue increased to ₹3207.55 Cr, +28.3% YoY and +8.1% QoQ, but the cost-of-materials burden rose to 59.5% of revenue from 49.3% and consolidated PAT of ₹385.93 Cr was distorted by the prior-year RED Business sale gain.
Segments
Construction equipment was the faster-growing unit at ₹419.63 Cr revenue, +39.2% YoY, versus agri machinery revenue growth of +27.0%, but agri machinery remained the earnings engine with ₹297.78 Cr segment result versus ₹22.60 Cr for construction equipment.
Key positives
- Consolidated revenue reached ₹3207.55 Cr, +28.3% YoY, accelerating from +22.6% in Q2FY26 and +11.3% in Q3FY26.
- Construction equipment revenue grew 39.2% YoY to ₹419.63 Cr, ahead of agri machinery revenue growth of 27.0%.
- Employee benefits and other expenses grew 15.5% YoY versus revenue growth of 28.3%, reducing combined opex intensity to 16.2% from 18.0%.
- Continuing PAT grew 4.5% YoY to ₹385.93 Cr despite the 360bps gross-margin compression, supported by revenue growth and lower opex intensity.
Key concerns
- Gross margin compressed 360bps YoY to 27.3% as cost of materials consumed increased to 59.5% of revenue from 49.3%; the filing does not disclose the cause.
- Revenue grew 28.3% YoY but material cost grew 55.0% YoY, indicating that input costs were absorbed rather than fully passed through in the quarter.
- Construction equipment segment result was only ₹22.60 Cr despite 39.2% revenue growth, leaving the faster-growing business with a 5.4% segment margin.
Earnings quality: includes non-operating other income
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