Latest news with #EKL
Time of India
29-06-2025
- Automotive
- Time of India
Escorts Kubota aims for No. 2 spot in Indian tractor market with new product launches
Farm machinery and construction equipment major Escorts Kubota Ltd is gunning for the number two spot in the Indian tractor market by combining the Indian firm's cost competitiveness with the Japanese partner's technology and quality strengths as part of its future plans, according to its top officials. The company, formed after Japan's Kubota Corporation acquired a majority stake in Escorts Ltd in a multi-structured merger deal announced in 2021, is working to finalise a mid-term plan (MTP) for up to 2031 with a slew of products planned to be launched, Escorts Kubota Ltd (EKL) Chairman and MD Nikhil Nanda and Deputy MD Seiji Fukuoka told PTI in a joint interview. "In the next four to five years between the three brands -- Farmtrac, Powertrac and Kubota -- I think the success is going to come from the new products that we are going to be launching. Lot of work has happened, and a lot of product lines are planned for introduction between now and the next five years...," Nanda said responding to a query on the road ahead. These products are for domestic as well as international markets and for different applications, and also for the construction business as well, he added without elaborating details. "Product planning, innovation and development is going to play an extremely important role for the kind of growth that we are envisioning," Nanda said. When asked about the company's growth ambitions, Fukuoka said,"In the domestic market, our first target would be to get to number two position. Presently, our market share is somewhere between 12 to 13 per cent." EKL is a distant fourth in the Indian tractor market that is currently led by Mahindra-Swaraj combined with around 40 per cent share. TAFE and Sonalika are the other players in the top three, he noted. In FY25, tractor retail sales were at 8,83,095 units as against 8,92,410 units in FY24, according to Federation of Automobile Dealers Associations (FADA) data. Both Nanda and Fukuoka declined to put a timeline to their target to become the number two player in the Indian market reiterating that it is "an ambition for the future". Fukuoka, however, said as the Indian market "is more of a mature or saturated market", the priority for EKL is to ensure its products "get selected by the customer before the competition". In order to achieve that, he said efforts are on to bring together the strengths of Escorts, which is cost competitive products and that of Kubota's technology and quality. "Presently, we are thinking of putting Kubota quality in the low cost yet good tractor and putting it in the price sensitive we end up putting the price higher because of the high quality, or make the price higher, then it will lose its value. So that is why, in this MTP, it is a very big theme on how to make good quality yet low-cost tractors," Fukuoka asserted. He said as Kubota has been collaborating for the last five years now with Escorts, it has also learned "what are the points where we can improve the quality without increasing the price and that know-how will also be shared globally in order to contribute to Kubota's global growth". In terms of network presence, Nanda said earlier Escorts was strong in North and West markets, while Kubota was strong in South and East. The coming together of the two entities has also helped in having a strong presence across India with over 1,500 plus dealers, Nanda said adding, "we still believe we have certain vacant spaces where we will be appointing dealers". Fukuoka said recently top officials of Kubota's sales firm in the Americas, where the company has a strong sales network maintaining a high market share, came to India to share experience and advised EKL dealers "on what can be done" to increase market share. On the export front, Fukuoka said,"By coming together as EKL now we are able to design tractors in India, procure things in India, and manufacture them in India and send them to the whole world through Kubota channels. This, of course, contributes to EKL's growth, but at the same time it also contributes to Kubota's growth." In Europe, he said Kubota has been able to recapture its market share in the compact tractor segment after introducing EKL's high quality and cost competitive product. "This is something that is already a success story. We have been able to regain market share and similar things can be done in different markets. India made tractors can be sold through Kubota sales network, so that the sales company of Kubota can also get profit and EKL can also make profit," Fukuoka noted. At present, exports account for 5 per cent of EKL's total sales and in the long term it is aiming to increase it to around 10-15 per cent.
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Business Standard
29-06-2025
- Automotive
- Business Standard
Escorts Kubota eyes No 2 spot in Indian tractor market with new launches
Farm machinery and construction equipment major Escorts Kubota Ltd is gunning for the number two spot in the Indian tractor market by combining the Indian firm's cost competitiveness with the Japanese partner's technology and quality strengths as part of its future plans, according to its top officials. The company, formed after Japan's Kubota Corporation acquired a majority stake in Escorts Ltd in a multi-structured merger deal announced in 2021, is working to finalise a mid-term plan (MTP) for up to 2031 with a slew of products planned to be launched, Escorts Kubota Ltd (EKL) Chairman and MD Nikhil Nanda and Deputy MD Seiji Fukuoka told PTI in a joint interview. "In the next four to five years between the three brands -- Farmtrac, Powertrac and Kubota -- I think the success is going to come from the new products that we are going to be launching. Lot of work has happened, and a lot of product lines are planned for introduction between now and the next five years...," Nanda said responding to a query on the road ahead. These products are for domestic as well as international markets and for different applications, and also for the construction business as well, he added without elaborating details. "Product planning, innovation and development is going to play an extremely important role for the kind of growth that we are envisioning," Nanda said. When asked about the company's growth ambitions, Fukuoka said,"In the domestic market, our first target would be to get to number two position. Presently, our market share is somewhere between 12 to 13 per cent." EKL is a distant fourth in the Indian tractor market that is currently led by Mahindra-Swaraj combined with around 40 per cent share. TAFE and Sonalika are the other players in the top three, he noted. In FY25, tractor retail sales were at 8,83,095 units as against 8,92,410 units in FY24, according to Federation of Automobile Dealers Associations (FADA) data. Both Nanda and Fukuoka declined to put a timeline to their target to become the number two player in the Indian market reiterating that it is "an ambition for the future". Fukuoka, however, said as the Indian market "is more of a mature or saturated market", the priority for EKL is to ensure its products "get selected by the customer before the competition". In order to achieve that, he said efforts are on to bring together the strengths of Escorts, which is cost competitive products and that of Kubota's technology and quality. "Presently, we are thinking of putting Kubota quality in the low cost yet good tractor and putting it in the price sensitive we end up putting the price higher because of the high quality, or make the price higher, then it will lose its value. So that is why, in this MTP, it is a very big theme on how to make good quality yet low-cost tractors," Fukuoka asserted. He said as Kubota has been collaborating for the last five years now with Escorts, it has also learned "what are the points where we can improve the quality without increasing the price and that know-how will also be shared globally in order to contribute to Kubota's global growth". In terms of network presence, Nanda said earlier Escorts was strong in North and West markets, while Kubota was strong in South and East. The coming together of the two entities has also helped in having a strong presence across India with over 1,500 plus dealers, Nanda said adding, "we still believe we have certain vacant spaces where we will be appointing dealers". Fukuoka said recently top officials of Kubota's sales firm in the Americas, where the company has a strong sales network maintaining a high market share, came to India to share experience and advised EKL dealers "on what can be done" to increase market share. On the export front, Fukuoka said,"By coming together as EKL now we are able to design tractors in India, procure things in India, and manufacture them in India and send them to the whole world through Kubota channels. This, of course, contributes to EKL's growth, but at the same time it also contributes to Kubota's growth." In Europe, he said Kubota has been able to recapture its market share in the compact tractor segment after introducing EKL's high quality and cost competitive product. "This is something that is already a success story. We have been able to regain market share and similar things can be done in different markets. India made tractors can be sold through Kubota sales network, so that the sales company of Kubota can also get profit and EKL can also make profit," Fukuoka noted. At present, exports account for 5 per cent of EKL's total sales and in the long term it is aiming to increase it to around 10-15 per cent.
Time of India
13-05-2025
- Automotive
- Time of India
Why Escorts Kubota tractor margins dragged in FY25
New Delhi: Farm and construction equipment maker Escorts Kubota Limited ( EKL ) is not expecting to witness a notable growth in the overall EBIT margin for the company even as it prepares for a slate of product launches this year. The company expects tractor margins to improve by 50-100 basis points in FY26, though it reiterated that new products generally carry lower initial margins due to introductory pricing and lower volumes. For the full year ending March 2025, it has reported an EBIT margin of 10.7 per cent for agri machinery products, compared to 11.2 per cent in the previous year. However, there is a sequential improvement in Q4 tractor EBIT margins, supported by a low base and reduced input costs, despite lower operating scale. In a conversation with ETAuto, Bharat Madan, whole-time director and CFO, Escorts Kubota Limited, said, 'As volumes increase and products stabilise, margins should improve accordingly.' Kubota's reliance on imported components is also a drag on margins. It does not allow the use of Escorts engines in its products. Madan said the use of imported components makes the company vulnerable to forex fluctuations. "While localisation efforts are underway, they will gain momentum once the new greenfield plant is operational, he added. It is setting up a new greenfield plant in Uttar Pradesh . Kubota, a major Japanese tractor maker, entered India in 2008 but saw limited growth initially. Its 2022 acquisition of Escorts marked a turning point, leading to the formation of Escorts Kubota and giving Kubota a stronger foothold in Indian markets by leveraging Escorts' established presence. EKL is also developing a hybrid structure, selling products under the Kubota brand through the Escorts platform. However, a key challenge has been the lack of clarity over which emission norms should be followed for the product. Madan noted that overall margin will remain stable at around 11 per cent for FY26, similar to FY25. For the Escorts Kubota, agri machinery business is the largest contributor to the overall sales mix with 81 per cent share, followed by construction equipment at 19 per cent. Within the agri machinery business, about 80 per cent is tractors and 20 per cent is non-tractors. For the full financial year ended March 2025, EKL said its consolidated net profit grew to ₹1,265 crore when compared to Rs 1,077 crore in FY24. Revenue from operations increased to ₹10,244 crore in FY25 as against ₹9,804 crore in FY24. The company expects its mid-term plan to be finalised by mid-FY26, with Board approval anticipated by Q4 FY26. Last year, the company signed a business transfer agreement with Sona Comstar to sell its Railway Equipment Business Division (RED) on a slump sale basis. Now classified as a discontinued operation, the division is being wound down, with closure expected by June 1, 2025 and full completion by the end of September, pending final approvals. Agri machinery Escorts Kubota reported FY25 tractor volumes of 1,15,554 units, a 1 per cent increase from FY24. Its current inventory stands at 4–5 weeks. To address portfolio gaps, the company plans to launch the Powertrac series for southern paddy markets in Q3 FY26, mid-segment (40–45HP) Kubota models in Q2, and phase two of the Promaxx series in early Q4. The domestic tractor industry is growing in the southern region, where EKL has traditionally had limited presence. The company aims to strengthen its footprint in this area. Last year, the industry sold 9.40 lakh tractors, the second-highest volume on record, following the peak of 9.45 lakh units in FY22-23. Neeraj Mehra - Chief Officer of the company's Tractor Business Division said given the current industry trends and positive forecasts, it is highly probable that this year it will surpass previous records, with the Indian tractor market potentially crossing the 1 million unit milestone for the first time. The outlook remains optimistic, driven by a favourable monsoon forecast, higher MSPs boosting farmer incomes, and healthy reservoir levels. Stable input costs are supporting margins, while rising non-agricultural use of tractors is further expanding market demand. Construction equipment For FY25, the EBIT margin in this segment improved to 9.9 per cent, up from 9.2 per cent in the prior year. The company's margin expectations now stand at 9-11 per cent. The transition to Trem-V emission norms began in January. EKL said it has managed to liquidate older stocks for most product lines within the last fiscal year. The market is now seeing products from different manufacturers at various stages of the transition. Sanjeev Bajaj, Chief Officer of the Construction Equipment Business Division, highlighted that the shift to new emission norms has led to price increases of around 10 per cent for products moving from BS-III to BS-V and 7 per cent for BS-IV to BS-V. He expects the first half of the fiscal year to see a temporary dip in demand due to these price hikes affecting affordability. However, he anticipates a market recovery as economic activity picks up, with a strong performance expected in the next financial year once current challenges are resolved. New manufacturing footprint Escorts Kubota, based in Faridabad, has a current manufacturing capacity of 1.7 lakh units. The company's planned Uttar Pradesh facility, will add 100,000 units in the first phase, with a possible second phase based on demand, it will cater to both domestic and export markets, with land acquisition expected by Q3 FY26 and production targeted by FY28–29. The company has allocated ₹350-400 crore for capex in the current fiscal year, excluding the greenfield project investment, compared to ₹240 crore in the previous year. EKL exports to over 70 countries, contributing 5–7 per cent of total revenue, with key markets in Europe and Asia. The upcoming facility aims to boost exports to 15 per cent over the next five years through new products and expansion into markets like Mexico (by Q1 FY26) and Southeast Asia, including Myanmar, Cambodia, and Thailand. However, entry into the US market, which is one of the largest for Kubota, is expected to take time and open the opportunity with production in the greenfield plant. EKL anticipates export growth of around 20–25 per cent in the current financial year.
