Escorts rallies 18% in September on hopes of good tractor sales

Shares of Escorts hit a fresh record high of Rs 1,280, up 3 per cent on the BSE on Friday. Thus far in September, the commercial vehicles company's stock has outperformed the market by surging 18 per cent on expectation of good tractor sales. In comparison, the S&P BSE Sensex was up 1 per cent during this period.

The market sentiment continues to be highly positive with good monsoons, better Kharif sowing, crop prices holding up well, and good supply of retail finance. The management remains optimistic for the coming festive months. The supply side situation improved significantly as compared to last month. The company is operating close to peak capacity now, it said after releasing the August sales numbers on September 1, 2020.

Escorts had reported better-than-expected tractor sales for the month of August 2020. Its domestic tractor sales were up by 79.4 per cent year on year (YoY) to 6,750 units while exports were up by 90.4 per cent YoY to 518 units. Overall total sales were up by 80.1 per cent YoY to 7268 units. The better than expected set of numbers were on the back of good rural demand.

Capital infusion by Kubota Corporation in Escorts will help the company further extend our capabilities in manufacturing and product development, foray into new export markets, improve systems and processes to a world-class level, overall ensuring delightful customer experience.

At 10:33 am, Escorts was trading 2.2 per cent higher at Rs 1,272 on the BSE, as compared to 0.17 per cent rise in the S&P BSE Sensex. A combined 620,000 equity shares have changed hands on the counter on the NSE and BSE, so far.