Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

Escorts Kubota Limited / Equity Bottom-Up

<ul>
<li>Based on current consensus estimates, <a href="https://www.smartkarma.com/entities/escorts-kubota-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Kubota Limited (ESCORTS IN)</a> is expected to deliver implied domestic volume growth of 6.5% for FY23 and 10% for FY24.</li>
<li>Our earlier checks have indicated a challenging environment for gaining market share or growing ahead of the Industry for ESCORTS. </li>
<li>Even if we assume market share gains and volume recovery leading to above industry growth, at CMP it is already priced in. </li>
</ul>


Based on current consensus estimates, Escorts Kubota Limited (ESCORTS IN) is expected to deliver implied domestic volume growth of 6.5% for FY23 and 10% for FY24.
Our earlier checks have indicated a challenging environment for gaining market share or growing ahead of the Industry for ESCORTS. 
Even if we assume market share gains and volume recovery leading to above industry growth, at CMP it is already priced in. 


Escorts Kubota Limited (ESCORTS IN) | Market Share Gains Priced In

<ul>
<li>
<a href="https://www.smartkarma.com/entities/escorts-kubota-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Kubota (ESCORTS IN)</a> 's domestic market share as of FY22 stood at 10.3 % vs 12% in FY20 against the aspiration of 15% for FY22. </li>
<li>Our interactions with various dealers across key northern and eastern states suggest caution and structural inability to regain market share loss.</li>
<li>Post equity infusion, <a href="https://www.smartkarma.com/entities/kubota-corp" target="_blank" data-smartkarma-citation="entities:12926:1" rel="noopener">Kubota Corp (6326 JP)</a> is probably in for more surprises than what it might have initially hoped for. </li>
</ul>



Escorts Kubota (ESCORTS IN) 's domestic market share as of FY22 stood at 10.3 % vs 12% in FY20 against the aspiration of 15% for FY22. 
Our interactions with various dealers across key northern and eastern states suggest caution and structural inability to regain market share loss.
Post equity infusion, Kubota Corp (6326 JP) is probably in for more surprises than what it might have initially hoped for. 


Escorts Kubota (ESCORTS IN) | Alarming Allegations by Dealers

<ul>
<li>
<a href="https://www.smartkarma.com/entities/escorts-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Ltd (ESC IN)</a> has been losing market share. As per management, <strong>"there are no "big" problems and they will regain the market share"</strong>, but we do not think so. </li>
<li>Some flash channel checks are suggesting issues with some of the company's products. These issues still remain unaddressed as per some dealers and customers. </li>
<li>While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. </li>
</ul>



Escorts Ltd (ESC IN) has been losing market share. As per management, "there are no "big" problems and they will regain the market share", but we do not think so. 
Some flash channel checks are suggesting issues with some of the company's products. These issues still remain unaddressed as per some dealers and customers. 
While the export opportunity and overall industry dynamics are positive unless the market share is regained, growth is likely to be slower than industry. 


Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

<ul>
<li>Consumer sentiment and demand environment is stable in Rural India. </li>
<li>There is a bit of optimism and hope of breaching FY20 volumes in FY23, supported with some pricing action. </li>
<li>Technical/Product issues are leading to a loss of market share for <a href="https://www.smartkarma.com/entities/escorts-ltd" target="_blank" data-smartkarma-citation="entities:6773:1" rel="noopener">Escorts Ltd (ESC IN)</a> </li>
</ul>


Consumer sentiment and demand environment is stable in Rural India. 
There is a bit of optimism and hope of breaching FY20 volumes in FY23, supported with some pricing action. 
Technical/Product issues are leading to a loss of market share for Escorts Ltd (ESC IN) 


India Channel Insight #37 | Escorts & Mahindra & Mahindra (Tractors)

Thematic (Sector/Industry)

<ul>
<li>This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March 2022).</li>
<li>The objective of the checks is to understand the underlying business narrative not to forecast the coming quarter and hence the limited sample sizes. </li>
<li>These checks are used as a tool to identify areas of discrepancy between management commentary and ground reality that could be the subject of future deeper dives. </li>
</ul>


This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March 2022).
The objective of the checks is to understand the underlying business narrative not to forecast the coming quarter and hence the limited sample sizes. 
These checks are used as a tool to identify areas of discrepancy between management commentary and ground reality that could be the subject of future deeper dives. 


India Channel Insight | Q4 Report Card | 59 Checks Across 5 Sectors

India

Escorts Kubota Limited is among India's leading engineering conglomerates, operating in the high growth sectors of Agri Machinery, Material Handling, Construction Equipment and Railway Equipment. The Group has earned the trust of over 5 million customers by way of product and process innovations over seven decades.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Escorts Kubota Limited (ESCORTS IN)

Escorts Kubota (ESCORTS IN) | Alarming Allegations by Dealers

Our dealer interactions point to structural issues at ESCORTS warranting attention. Regaining lost market share may not be that easy.

Pranav Bhavsar

Escorts Ltd (ESC IN) | Expected to Grow Slower than Industry

The tractor industry is poised well for a recovery. However, we believe Escorts Ltd (ESC IN)'s product issues will lead to its growth being slower...

Pranav Bhavsar

India Channel Insight #37 | Escorts & Mahindra & Mahindra (Tractors)

There is optimism among tractor dealers with regards to TIVs, but not all players are equal. Escorts Ltd (ESC IN)'s dealers are complaining about...

Pranav Bhavsar

India Channel Insight | Q4 Report Card | 59 Checks Across 5 Sectors

This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March...

Pranav Bhavsar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)