India`s Escorts Kubota posts 93% jump in Q1 profit on railway, construction demand boost
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Indian tractor maker Escorts Kubota reported an almost 93% jump in first-quarter profit on Tuesday, led by the increased demand for its construction and railway equipment.
Net profit for the quarter through June 30 was 2.83 billion rupees ($34.4 million), compared with 1.47 billion rupees a year earlier.
It reported a more than two-fold jump in the profit before tax at its railway division, while the construction equipment segment posted a multi-fold jump.
"Construction business has done well and is poised for further growth with government thrust and focus on faster execution of infrastructure projects." Chairman and Managing Director Nikhil Nanda said in a statement.
Demand for construction machinery is still buoyant and will further accelerate post-monsoon, Nanda added.
Sales of tractors slipped 0.8% due to irregular monsoon rains. However, the pre-tax profit in the agri-machinery unit that houses tractors surged 33%.
Nanda expects the growth momentum in the railways business to remain steady with the increasing requirements of rail transport both on the domestic and international front.
Revenue from operations climbed 15.5% to 23.28 billion rupees.
Larger rival Mahindra and Mahindra is set to post quarterly earnings later this week.
Shares of Escorts rose as much as 2.8% post the earnings after gaining 18.9% in the June quarter.
($1 = 82.2460 Indian rupees)
