Escorts Kubota Q2 FY27 Results (NSE: ESCORTS)
Signal: Growth decelerated
The read
The trajectory has shifted from the prior quarter's margin expansion to a second consecutive quarter of pressure: consolidated revenue grew 16.2% YoY to ₹3,243.41 crore, but gross margin contracted 352bps to 27.2% and PAT fell 21.3% to ₹250.22 crore; construction equipment growth is strong, but raw-material absorption and working-capital outflow are the immediate watchpoints.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,243.41 Cr | +16.2% | +1.1% |
| Net profit | ₹250.22 Cr | -21.3% | |
| EPS | ₹22.74 | -21.4% | |
| EBIT margin | N/A |
P&L walk
Revenue increased to ₹3,243.41 crore, +16.2% YoY and +1.1% QoQ, but gross margin fell to 27.2% from 30.7% as material costs rose faster than sales; PAT declined 21.3% to ₹250.22 crore.
Segments
The consolidated segment table is not fully reproduced in the supplied filing text; the standalone table shows construction equipment as the faster-growing unit, with revenue up 58.6% YoY to ₹536.20 crore versus agri-machinery growth of 10.6% to ₹2,690.08 crore.
Key positives
- Consolidated revenue increased 16.2% YoY to ₹3,243.41 crore, with construction equipment revenue up 58.6% YoY to ₹536.20 crore.
- Employee benefits and other expenses grew 10.6% YoY, 5.6 percentage points slower than revenue growth of 16.2%.
- Finance costs remained low at ₹4.66 crore, while consolidated borrowings were only ₹36.17 crore at September 2026.
- Construction equipment revenue grew 58.6% YoY, materially outpacing agri-machinery revenue growth of 10.6%.
Key concerns
- Gross margin compressed 352bps YoY to 27.2% as cost of materials consumed rose to 66.7% of revenue from 64.1%; the filing does not disclose the driver.
- PAT fell 21.3% YoY to ₹250.22 crore despite 16.2% revenue growth, showing that gross-margin pressure is flowing through to earnings.
- H1FY27 operating cash flow was negative ₹106.68 crore versus positive ₹477.33 crore in H1FY26, with inventories and receivables absorbing cash.
- EPS fell 21.4% YoY to ₹22.74, broadly tracking PAT rather than indicating dilution.
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