In recent
quarter, Escorts indicated to Investor community that they have done the transformation through innovating product
line. The different business unit of Escorts such as Heavy Machinery,
Agricultural Tractors, Hydraulic Mobile Cranes, Farm Equipment's and Railway
suffered downturn from 2013 to Early 2015 and forced the organisation to change
their strategy on the Research development to Product development to market
positioning. The pain went out of control post last two year of draught and
slow economic growth.
The continuous effort by the Promoter group and relentless
effort by its Product and Sales team turned the company in the last two
quarter. For the past few months Escorts is showing positive sales report on
their management is positive about the sales growth and expect the sales growth
to be in the range of 15 plus % point year on year.
The stock price in the last few months shouted upwards and
also attracted the best investor Rakesh Jhunjhunwala
eye who bought good chunk of equity at lower price.
With very good monsoon trend in North
India where Escorts is having very strong footing, I will not be surprised
that they gain market share and achieve more than 20 % y-o-y growth path. The
cost optimization also helped them to improve their cash flow and profitability.
I expect that equity price will easily give 30 to 40 % in next 6 to 9 month.
It's a must have equity for all retail investor. I call these kind of companies
as pension companies. Given their market cap, I must highlight that their land
properties is more or less value the market cap of the company.
