Farm equipment and engineering major Escorts Ltd on Monday reported a 6 per cent increase in consolidated net profit at Rs 92.58 crore in the first quarter ended on June 30, 2020 amid challenges of the coronavirus pandemic.
The company had posted a consolidated net profit of Rs 87.66 crore in the same period last fiscal, Escorts Ltd said in a regulatory filing.
Consolidated revenue from operations during the quarter under review stood at Rs 1,089.26 crore as compared to Rs 1,440.45 crore in the year-ago period, it added.
Revenue from the agri machinery segment stood at Rs 976.71 crore in the first quarter of 2020-21 as compared to Rs 1,105.71 crore in the same period a year ago.
Tractor sales in the quarter were 18,150 units as against 21,051 units in the corresponding period last fiscal.
"The overall numbers are lesser than last year because in the first 45 days of the quarter we had lockdown. April was under complete lockdown. Sales started only in the middle of May and in June we had 22 per cent growth," Escorts Ltd Group CFO Bharat Madan told PTI.
Despite lower volumes, margins for agri machinery business went up by 356 bps to 14.5 per cent against 0.9 per cent last year same quarter due to improved product mix, lower costs and continued soft commodity prices, the company said.
Madan said while the demand has been strong due to supply side issues, including production constraints due to COVID-19, infection of around 50 workers at the company's Faridabad facility, sales have been restricted in July.
He said the plant and office put together, the company has around 100-odd COVID-19 positive cases among its employees but most of them have recovered and "only 22 cases are currently under hospitalisation and under recovery. Hopefully they will also come back." The company is following all the safety and hygiene protocols, including sanitisation and contact testing of around 1,000 people and making it mandatory for everyone now to go for testing, and is continuing production in a limited way at present, he added.
During the first quarter, the construction equipment segment posted a revenue of Rs 52.40 crore as compared to Rs 212.20 crore in the year-ago period. Sales volume for the quarter were at 234 machines as against 1,067 machines in the corresponding period last fiscal, it added.
"Most of the sales were recorded in the last month of the quarter, due to nationwide lockdown in the months of April and May 2020, resulting in EBIT for the quarter ended June 2020 at negative Rs 16.8 crore as against Rs 5.4 crore in the corresponding period," Escorts Ltd said.
The railway equipment division had a revenue of Rs 54.91 crore as against Rs 118.10 crore in the same period last fiscal. Due to the outbreak of COVID-19 pandemic and resultant lockdown, the production of coaches and locomotives across all railway units has been affected badly, the company said.
"Current order book as of June 30 June 2020 is more-than Rs 480 crore that will be executed in the next 12-15 months," it added. The company said due to unprecedented COVID-19 pandemic situation during this period, the financials for the quarter ended June 2020 do not represent normal operations and to that extent are not strictly comparable with any normal quarter.
Commenting on the performance, Escorts Ltd Chairman and Managing Director Nikhil Nanda said, "In this prolonged pandemic we are trying to find new and innovative ways to connect with our customers and providing them with un-interrupted product distribution and service." Rural demand in agriculture has been encouraging and the government's focus will help continue the momentum, he added.
Amidst the challenging environment, while we have witnessed faster revival in our agriculture business this quarter, our construction and railway business have been impacted because of lockdown and related issues across geographies," Nanda said adding the company is maintaining business continuity and ensuring safety of all its employees, stakeholders and partners aligned to government advisories.
On the outlook, Nanda said, "Hopefully, we will see a recovery soon as the current market situation gets better and the economy across layers improves. We are optimistic for the coming quarters and hope that the collective efforts will help in containing the crisis and the global economy will be on its strength soon again."