Escorts Kubota Announced A Hike In Tractor Prices By 1-2% Starting Next Week

Recently on Tuesday in a company filing, the farm machinery major Escorts Kubota shared that it will increase its price from next week. As per the statement, the price hike will be in immediate effect from November 16. The price increase, which takes effect on November 16, is intended to offset the impact of cost inflation in both commodity and other costs, according to the company in a regulatory filing.

Furthermore, as per the information the price hike may vary as per different tractor models, and variants. Though the statement was published without any further explanation with an unclear degree of the hike.

Following the price hike in effect from November 16, the not-so-shocker rise in the shares of Escorts Kubota came up front. In an interview, the Group CFO Bharat Madan commented that, During the September quarter, the company increased its market share by 70 basis points, bringing it to 11%. Kubota's tractor market share fell from 9.9 percent to 9.4 percent in this fiscal year's first half.

Furthermore, Escorts Kubota's operating profit fell 33% YoY to Rs 153 crore during the September quarter, while margins dipped to single digits, a 540 basis point drop from the same period last year. Reflecting further, Madan expressed that he believes the company's margins have reached rock bottom, and it will take at least 4-5 quarters to return to normal levels.

Escorts Kubota primarily manufactures agricultural tractors, engines of farming tractors, construction earth moving and material handling equipment, round and flat tubes heating elements double acting hydraulic shock absorbers for railways coaches center buffer couplers automobile shock absorbers telescopic front fork & McPherson struts brake block internal combustion engines, and all types of railway brakes. During the year, it also formed another joint venture with Kubota Corporation Japan. The Company has invested Rs 90 crores in the equity capital of Kubota Agricultural Machinery India Private Limited, the Company's joint venture with Kubota Corporation.

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