ICICI Direct has given Hold recommendation for Escorts with a target price of Rs. 1325 in its research report issued on Aug 06, 2021

ICICI Direct’s research report on Escorts

Escorts is India’s fourth largest tractor maker (11.3% FY21 market share) and also serves the domestic construction equipment, railways space. FY21 sales mix – tractors 82%, construction equipment 11%, railways 7% Past five year CAGR: 44.9%, 59.8% in EBITDA, PAT; cash positive b/s

Outlook

We retain HOLD rating given muted outlook for core tractor business We value Escorts at revised SOTP-based TP of Rs 1,325 (15x P/E on core FY23E EPS, 30% discount on treasury shares; earlier TP Rs 1,140).

 

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