Escorts Rallies 15%, Hits 52-Week High On Good Monsoon Hopes

Shares of tractor maker Escorts rallied as much as 15.5 per cent to hit fresh 52-week high of Rs 210.40 on the National Stock Exchange on hopes that good monsoon rains would result in higher sales volumes for the company.

Faridabad-based Escorts told NDTV Profit that for financial year 2017, the company expects overall growth of over 10 per cent in tractor sales.

Bharat Madan, group financial controller at Escorts, says, "In FY17 if monsoon is well spread out we can expect a very good growth happening in the second half of this year which may even accelerate to 20 per cent but overall 10 per cent-plus growth is expected."

Mr Madan said that Escorts has seen good growth in southern Indian markets, especially in Tamil Nadu and Andhra Pradesh. He added that de-growth in north Indian markets of Punjab, Haryana and UP reduced to 5-8 per cent from high double-digit levels.

Meanwhile, Escorts' construction equipment sector has also shown signs of improvement, adds Mr Madan. "After last 3-4 years of de-growth, in the last quarter the construction equipment sector has shown signs of improvement. Last two months saw very good growth with growth happening at 15 per cent. With volumes moving up for this year, we expect 15-20 per cent growth over last year in topline," he added. 

In the March quarter, Escorts reported 28.68 per cent increase in standalone net profit at Rs 16.42 crore in the fourth quarter ended March 31, 2016 riding on an increase in tractors sales.

Shares of Escorts ended 14 per cent higher at Rs 207.65.