Kubota Aims For Rs. 22,500 Crore In Profits By Fiscal Year 2028
Outlining its fresh mid-term business plans, Kubota plans to make India its export hub for affordable tractors. As per this plan, the company’s goal of increasing revenue by 2.5 times to Rs. 22,500 crores throughout the coming five years will come into reality.
Eyeing the no. 2 position in the Indian tractor market Escorts Kubota intends to be the largest tractor exporter. The company is planning to achieve this goal by building a new plant and increasing production by 76% to 300,000 units, leveraging Kubota's global presence, and becoming a strategic hub for global parts sourcing. Over the next five years, the company plans to invest Rs 4,000 crore in new capital.
Taking A 'Glo-Cal' Approach
With the ‘Glo-Cal’ approach the company aims to target both global and local market operations. Along with this, Escorts Kubota also directs to be the largest made-in-India exporter of tractors. They also aim to be accomplished leadership in the domestic market of combined harvesters and rice transplanters by 2028.
Another strategic goal outlined in Escorts Kubota's Mid-Term Business Plan is to be the No. 2 tractor manufacturer in the Indian market of tractors and farm machinery. This means it will become a formidable rival to domestic market leader Mahindra & Mahindra. It will control one-fifth of the Indian tractor market if it achieves its goal.
The goal is to develop and deliver high-quality, low-cost tractors and farm machinery in India and around the world. The company has an optimistic approach toward future growth, the company has its belief in benefiting from the collaborations they made with low-cost manufacturing facilities of Escorts and the diverse global presence of major Japanese Kubota. Followed by world-class practices and advanced R&D facilities. The company aims to develop cost-efficient, high-quality farm machinery, and tractor both worldwide and in India.
According to reports, the company intends to increase its tractor and engine manufacturing capacity by more than 76% by the fiscal year 2028. The existing capacity of manufacturing 170,000 units will boost up to 300,000 units per year with the help of greenfield units.
Escorts Kubota Management said in a statement, "The company's focus would be on increasing market share in India through new product launches and channel expansion, achieving leadership in exports through product development, continuing to ramp-up other businesses, and improving profitability."
Escorts Kubota expects 1.5x to 3x growth in portfolio expansion over the next five years across all three tractor brands - Powertrac, Farmtrac, and Kubota - with products ranging from 15hp to 110hp. As a result, the company's market share will increase from 12 percent to 18-20 percent by FY2028.
Increasing The Company's Exports
Management in a comment stated, “We intend to increase our export volumes because India serves as a low-cost manufacturing base for global markets. We also want to be a leader in India-led tractor exports, as well as a strategic hub for global sourcing ". Adding further, “This goal will be accomplished through a multi-brand strategy, channel expansion, product enhancement, and parts supply to the global Kubota network.”
The company's management also stated that even a 5% shift in total purchasing of components sourced globally to India would result in approximately US$ 500 million (Rs 4,081 crore) in potential exports. This is another reason for Escorts Kubota's ambitious revenue target of Rs 22,500 crore by FY2028.
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