Rakesh Jhunjhunwala sharply lowers escort stakes; What will drive the stock forward?
In the latest Escorts shareholding data on the stock exchange, as of March 2022, Rakesh Jhunjhunwala’s name is not mentioned in the public list of shareholders.
As of December 2021, Jhunjhunwala owned 75 lakh shares or 5.68% in Escorts. However, now his name does not appear in the list of Escorts Q4FY22 shareholders, which could mean that his holdings are lower or higher or around 1%.
The Trendlyne platform for stock filters and analysis shows that Jhunjhunwala’s stake in Escorts is below 1% on the charts. This means that Jhunjhunwala recorded his profits in the business during the period of January to March 2022.
Jhunjhunwala has held Escorts shares since December 2015. During this period, he purchased 11,225,000 shares, or 9.16% Escorts. However, since then, Jhunjhunwala has changed his stake in the business by buying or selling.
On Wednesday, Escorts shares closed at ₹1540.35 fixed coin from previous close on BSE. Shares hit an intraday high of ₹1557.65 each and ₹1530.50 each respectively.
Over the past five days, shares of Escorts have plunged more than 18% on BSE. The shares were at ₹1,888 each on April 6 and corrected heavily since then.
However, in one year, shares of Escorts have jumped nearly 25% based on today’s closing price. The shares were at ₹1,233.7 each on the same day last year.
On Escorts, Saji John, Principal Automotive Analyst at Geojit Financial Services, said, “Due to last year’s high base and weak demand for non-farm tractors, wholesale tractor numbers continue to remain subdued to short term. We expect the situation to improve next year. while agricultural indicators continue to look promising with Rabi plantings at record level, good water reservoir level, favorable crop price and initial positive forecast of 2022 as normal monsoon all supporting sentiment rural. at its historical average.
In March 2022, Escorts sales amounted to 10,074 tractors compared to 12,337 tractors sold in March 2021, a decrease of 18.3% year-on-year. Performance was impacted due to last year’s high base and subdued trading demand.
Tractor sales fell 32.8% to 21,895 units between January and March 2022 (Q4FY22), compared to 32,588 tractors recorded in the same quarter last year. For the full year FY22, Escorts tractor sales plunged 11.7% to 94,228 units from FY21’s 1,06,741 units.
Last month, Escorts in its sales report said: “During the next year, demand for tractors is expected to improve thanks to higher Rabi production, a good level of water tanks, a increased Union budget allocations to the rural and agribusiness sector coupled with favorable crop prices, and initial positive forecasts for the 2022 monsoon season as usual, all supporting rural customer sentiments. Inflation, however, continues to be a matter of concern.
In December 2021, the company posted a consolidated net income of ₹193.71 crore against ₹173.47 crores in Q2FY22 and ₹286.42 crore in Q3FY21. The company’s operating revenues amount to ₹1,984.28 crore against ₹1,673.85 crore from Q2FY22 and ₹2,042.23 crores in Q3FY21.
For the nine months, Escorts recorded a net profit of ₹606.22 crore against ₹871.63 crore from the corresponding period of the previous year. Consolidated revenue from operations amounted to ₹4,785.67 crore against ₹7,014. 42 crore from the same period last year.
Where is the stock of escorts seen in advance?
Shashank Kanodia and Raghvendra Goyal, research analysts at ICICI Securities, said in their report that they were positive about the company’s integration of Kubota Corporation (Japan) as a co-sponsor with a preferential allocation of new capital. appropriate to ₹2,000 per share and substantial open offer. The duo said, “We remain positive on this development, given Kubota’s expertise in agricultural equipment, mechanization and construction equipment. We see this as a winning combination and will expand the product offering at Escorts.
Further, the two stated in their memo, “Given the low electronics content of the product offering at Escorts, we see the company only coming under gross margin pressure if raw material prices remain at low levels. elevated levels relative to prevailing geopolitical tensions”.
“As a result, we are revising our forward estimates. We are, however, downgrading BUY’s stock to HOLD given the weak growth trajectory of its core tractor business and awaiting larger plans from its association with Kubota Corporation before turning decisively positive. on the title We appreciate Escorts at SOTP-based TP from ₹2,050 (25x P/E on average basic FY23E-24E EPS, 15% discount on treasury shares),” they added in their note.
Escorts is the nation’s fourth-largest tractor manufacturer (11.3% market share in FY21) and also serves domestic construction equipment and railroad space. The leading front of the business is largely contributed by the tractor segment at 82%, while construction and railways contribute 11% and 7% respectively. Escort has cash-rich b/s with positive net cash at ₹5,000 crore