Escorts Kubota Profit Surges 38% on Strong Exports, ₹1600 Cr Business Sale

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AuthorKavya Nair|Published at:
Escorts Kubota Profit Surges 38% on Strong Exports, ₹1600 Cr Business Sale
Overview

Escorts Kubota reported a robust Q3 FY26 with standalone adjusted PAT soaring 38.3% YoY to ₹401.6 Crore on revenue growth of 11.1% to ₹3,261.4 Crore. EBITDA climbed 30.9% YoY, with margins expanding 203 bps. The Agri Machinery segment saw strong tractor volume growth, particularly exports. The company also completed the ₹1,600 Crore sale of its Railway Equipment Business and received NCLT approval for subsidiary amalgamation.

📉 The Financial Deep Dive

Escorts Kubota Limited has delivered a strong financial performance for Q3 FY26, showcasing significant year-on-year (YoY) and quarter-on-quarter (QoQ) growth across key metrics.

The Numbers:

  • Standalone Revenue: ₹ 3,261.4 Crore, an increase of 11.1% YoY and 17.4% QoQ.
  • Standalone EBITDA: ₹ 438.7 Crore, up 30.9% YoY and 20.8% QoQ.
  • Standalone EBITDA Margin: Expanded by 203 bps YoY to 13.5%.
  • Standalone Adjusted Profit After Tax (PAT): Reached ₹ 401.6 Crore, a substantial rise of 38.3% YoY and 25.0% QoQ. Reported PAT stood at ₹ 362.4 Crore, up 12.1% YoY.
  • Standalone Earnings Per Share (EPS): Reported at ₹ 32.93, a 24.7% YoY increase.

For the nine months ended December 31, 2025 (9M FY26), standalone revenue grew 9.9% YoY to ₹ 8,522.1 Crore, with EBITDA up 27.3% YoY and adjusted PAT rising 34.1% YoY.

The Quality:

The company demonstrated effective cost management, with material costs as a percentage of revenue decreasing YoY. This, coupled with strong operating leverage, contributed to the robust margin expansion. Return on Capital Employed (ROCE) for standalone operations in Q3 FY26 was approximately 75% (annualized), while the Construction Equipment segment achieved an impressive 200.2% ROCE. Similarly, ROE for standalone operations was around 60% (annualized).

Strategic Moves:

Two significant corporate events marked the quarter: the National Company Law Tribunal (NCLT) approval for the amalgamation of its subsidiaries, and the completion of the sale of its Railway Equipment (RED) Business to Sona BLW Precision Forgings Limited (Sona Comstar) for ₹ 1,600 Crores. The RED business has been reclassified under discontinued operations.

Risks & Outlook:

While the Agri Machinery segment, particularly tractor exports, continues to be a strong growth driver, the Construction Equipment (CE) segment saw a 13.7% YoY decline in volumes in Q3 FY26, although volumes recovered significantly QoQ. Sustaining export momentum and driving CE segment recovery remain key focus areas. Standard risk factors related to regulatory changes and economic developments are noted.

Investors will watch for the continued integration with Kubota and the performance trajectory of the CE segment in the coming quarters.

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