How has been the historical performance of Escorts Kubota?

Revenue and Profit Growth

Over the seven-year period ending March 2025, Escorts Kubota’s net sales have shown a steady upward trend, rising from ₹6,262 crores in 2019 to ₹10,244 crores in 2025. This represents a compound growth trajectory, with notable acceleration in recent years, particularly between 2022 and 2025. The company’s operating profit before depreciation, interest, and tax (PBDIT) excluding other income also improved significantly, reaching ₹1,165 crores in 2025 compared to ₹725 crores in 2019. Including other income, operating profit rose to ₹1,627 crores in 2025, underscoring the company’s ability to enhance operational efficiency alongside revenue growth.

Profit before tax (PBT) increased from ₹716 crores in 2019 to ₹1,352 crores in 2025, while profit after tax (PAT) rose from ₹479 crores to ₹1,125 crores over the same period. The consolidated net profit, which factors in minority interests and share in associates, more than doubled from ₹479 crores in 2019 to ₹1,265 crores in 2025. Earnings per share (EPS) reflected this growth, climbing from ₹39.07 in 2019 to ₹113.06 in 2025, indicating enhanced shareholder returns.

Cost Structure and Margins

Escorts Kubota’s raw material costs have generally increased in line with sales, reaching ₹5,288 crores in 2025 from ₹4,077 crores in 2019. Purchase of finished goods also rose substantially, reflecting the company’s expanding product portfolio and market reach. Employee costs increased steadily, reaching ₹774 crores in 2025, supporting the company’s growth initiatives. Other expenses similarly rose, consistent with business expansion.

Despite rising costs, the company maintained healthy operating profit margins, with the operating profit margin excluding other income hovering around 11.4% to 16.1% over the years. The gross profit margin remained robust, peaking at 18.16% in 2021 and settling at 15.58% in 2025. PAT margins have fluctuated but remained strong, reaching 10.97% in 2025, reflecting effective cost management and operational leverage.

Balance Sheet Strength and Asset Base

Escorts Kubota’s total assets have expanded significantly, from ₹5,014 crores in 2020 to ₹13,095 crores in 2025, indicating substantial investment in growth and capacity. Shareholders’ funds have more than tripled from ₹3,117 crores in 2020 to ₹10,367 crores in 2025, demonstrating strong capital accumulation and retained earnings growth. The company has effectively reduced its debt levels, with total debt falling to a minimal ₹2.25 crores in 2025 from ₹367.56 crores in 2024, signalling a strong deleveraging trend.

Net block of fixed assets increased steadily, reflecting ongoing capital expenditure, while non-current investments grew markedly, supporting diversification and strategic investments. Current assets, including cash and bank balances, have also increased, providing liquidity and operational flexibility.

Cash Flow and Financial Health

Cash flow from operating activities has shown a positive trend, rising to ₹1,003 crores in 2025 from ₹797 crores in 2020, underscoring the company’s ability to generate cash from core operations. Investing activities have involved significant outflows, consistent with capital expenditure and strategic investments, while financing activities have varied, with a notable reduction in borrowings in recent years. The net cash inflow in 2025 stood at ₹107 crores, reflecting prudent cash management and financial discipline.

Summary of Historical Performance

In summary, Escorts Kubota has exhibited strong historical performance characterised by consistent revenue growth, expanding profitability, and improving margins. The company’s balance sheet has strengthened considerably, with rising shareholder equity and reduced debt levels. Cash flow generation remains healthy, supporting ongoing investments and operational needs. Earnings per share have more than doubled over the period analysed, reflecting enhanced value creation for shareholders. While costs have increased in absolute terms, the company has managed to maintain solid margins, indicating effective cost control and operational efficiency.

These financial trends position Escorts Kubota as a resilient player with a solid foundation for future growth, though investors should continue to monitor market conditions and sector dynamics for sustained performance.

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