JOIN USEscorts, one of the leading players in the tractor industry, is looking to exit its auto spares business.
“The auto spares business is insignificant for the company currently and so, we are looking to exit the segment,” Escorts management told analysts in its conference call, post its quarterly earnings.
The management, however, seemed bullish about the overall prospects of the company, stating that it is eyeing a significant jump in revenues by 2020. “We are looking to double our revenues by 2020 from the current levels,” the management said.
The capex over the next two years would be Rs 120 crore, and majority of it will be towards product development and technology upgrade, the management added.
Escorts had posted revenues of Rs 3,985.8 crore ($632.7 million), and a net profit of Rs 74.7 crore in FY15. For the nine months ended December 31, 2015, the company had posted revenues of Rs 2,667.5 crore with a profit after tax of Rs 73 crore. As per the third quarter earnings presentation given by the company, the agri machinery division contributed to 79 per cent of Q3 revenues, followed by the construction equipment business at 13 per cent, railway products business at 6 per cent and auto products business at 2 per cent.
Revenues from the auto products business during the quarter stood at Rs 16.6 crore, compared with Rs 25.5 crore an year ago.
The shortfall in revenue for the auto products business was mainly due to lower export sales and after market sales, the company stated.