Shares of Escorts Kubota surged over 4% in early trade today after brokerage firm Emkay Global upgraded the stock to a “Buy” from its previous “Add” rating. The stock hit an intraday high of ₹4,054 on the National Stock Exchange (NSE). As of 11:52 AM, the shares were trading at ₹4,016.50, marking a 4.18% increase.
Emkay has raised its target price for Escorts Kubota to ₹4,700, citing favorable conditions following the recently concluded monsoons, which saw an 8% increase over the long-period average. The improved monsoon outlook is expected to positively impact the upcoming crop cycles, boosting the agricultural sector and, in turn, tractor demand.
The brokerage firm noted that with a favorable industry base, which saw a 13% year-on-year decline in the second half of FY24 and remained flat in FY25 year-to-date, the tractor industry is likely to enter an upcycle from the second half of FY25.
Escorts Kubota is also focusing on several strategic initiatives, including product development, expanding distribution channels, and increasing capacity to capture opportunities in both Indian and export markets. A key mid-to-long-term driver for the company is Kubota’s intention to ramp up component sourcing from India, with current global sourcing valued at approximately USD 10-12 billion annually.
Emkay expects earnings per share (EPS) growth for Escorts Kubota to remain strong, projecting a compound annual growth rate (CAGR) of 16% for FY25-FY27, while maintaining its overall EPS estimates for the company.
