Shares of Escorts Kubota hit their all-time high today amid a rally in the broader market. The large cap stock, which closed at Rs 1,929.20 on September 16 rose 10 per cent to a high of Rs 2,122 on BSE today. With today’s rally, the stock has zoomed 305 per cent in three years. Late investor Rakesh Jhunjhunwala owned 1.39 per cent stake or 18.30 lakh shares in the farm equipment maker at the end of the June quarter. Escorts Kubota stock opened higher at Rs 1,924 today on BSE. Escorts Kubota shares are trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The share has gained 43.53 per cent in a year and risen 9.15 per cent since the beginning of this year.
The stock has climbed 17.09 per cent in a month and gained 4.57 per cent in one week. Total 1.63 lakh shares of the firm changed hands amounting to a turnover of Rs 33.75 crore on BSE. Market cap of the firm rose to Rs 27,443 crore on BSE. The stock hit a 52-week low of Rs 1,400 on June 30, 2022.
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Shareholding Pattern
15 promoters held 72.90 per cent stake in the firm and 1,64,277 public shareholders owned 25.30 per cent or 3.33 crore shares for the quarter ended June 2022. Of these, 1,63,109 public shareholders held 9.95 per cent stake with capital up to Rs 2 lakh.
Only 27 shareholders with 2.20 per cent stake held capital above Rs 2 lakh for the quarter ended June 2022 . 121 foreign portfolio investors (FPIs) held 55.95 lakh shares in Q1 of the current fiscal.
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Expert take on Escorts Kubota
Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking said, “Share price scaled all time high of Rs 2122 during the month of Sept’22 with strong volumes indicating structural turnaround and acceleration of upward momentum. On daily chart, stock has been making sequential higher high low while sustaining above its 20-day EMA highlighting strength in the ongoing uptrend and offers re-entry opportunity for short term traders at current juncture to ride the upward momentum. To add further, the stock has generated a breakout above the bullish flag formation signalling continuation of the up move and thus offers fresh entry opportunity. On the oscillators front, the daily MACD is in uptrend and is seen sustaining above its nine periods average this validates positive bias. One can expect the stock price to head towards Rs 2250 in the medium term perspective as it is measuring implication of the flag formation and the projected 150% retracement of the Apr’22-June’22 decline.”
ICICI Direct has given a buy call on Escorts Kubota with a target price of Rs 2,390, implying a 14 per cent upside against the current market price of Rs 2,095.7. Time period for the call is one year.
The stock has grown at 26 percent CAGR over the last five years from Rs 636 in September 2017, vastly outperforming the Nifty Auto Index. The brokerage upgraded the stock from HOLD to BUY tracking Kubota’s strength in farm machinery space with key monitorable being medium-term growth plan.
On September 1, Motilal Oswal gave a neutral call to the stock.
The target price of the brokerage was 22 percent lower at Rs 1,575 against the market price of Rs 2,020 at that time.
“Escorts unveiled its medium term business plan (MTBP) with three objectives:a. Kubota to become the numero uno global Tractor manufacturer in terms of volumes. b. Expand revenue and improve profitability in Kubota. c. Promotion of farm mechanization globally. The medium term business plan (MTBP) extends to areas discussed in the past, with the only addition being the setting-up of an R&D center in India. While these are steps in the right direction, some of these drivers will take time to reflect in its financials. We are not yet sure about the role Escorts will play in the sourcing of components (trading, manufacturing, or just facilitating). We await further details on investments, timelines, and targets, if any,” said Motilal Oswal.
About Escorts Kubota
Escorts Kubota was formerly known as Escorts Ltd. In June 2022, the firm changed its name in the wake of Japan’s Kubota Corporation increasing its stake in Escorts to 44.8 per cent by subscribing to new equity shares and through an open offer to the public shareholders of Escorts. The company offers solutions for agriculture, infrastructure and railways. The company operates through four segments: Agri machinery, construction equipment, railway equipment and auto ancillary products.