Commodity price inflation has an impact on Escorts Kubota's earnings in FY2023.

Retail sales in certain regions were hit by unseasonal rainfall and crop damage. The company saw growth across the construction equipment portfolio in the second half of this fiscal year, including material handling, earth moving, and road segment.

Escorts Kubota has released its financial results for FY2023, which were hit principally by commodity price increases combined with unusual events.

For the fourth quarter of the fiscal year 2023, the company recorded revenue of Rs 2,214 crore, a 17 per cent increase, and EBITDA of Rs 233 crore, compared to Rs 248 crore the previous year. The net profit was Rs 216 crore, compared to Rs 190 crore in the previous year's similar period.

The profit after tax was Rs 636 crore, down from Rs 735.6 crore the previous year. Profits were hit primarily by commodity price inflation and an unusual item of Rs 97.2 crore resulting from the impairment of investment in the joint venture Tadano Escorts India and wholly owned subsidiary Escorts Crop Solutions.

Also Read: Retail Tractor Sales Report for April 2023 Risen by 1.48%, Sold 55,835 Tractors

Profit before tax was also reduced during the quarter due to lower other income due to temporary mark-to-market losses on Treasury Investments.

During the year, the company sold 24,765 tractors, an increase of 13%, and 1,528 pieces of construction equipment, an increase of 18%.

Despite raising prices across its product portfolio and reducing costs, the company stated that steep inflation in commodity prices, combined with an adverse product mix impact due to an industry shift toward lower horsepower segments, negatively impacted operating profit for the quarter that ended June.

Retail sales in certain regions were hit by unseasonal rainfall and crop damage. The company saw growth across the construction equipment portfolio in the second half of this fiscal year, including material handling, earth moving, and road segment.

Also Read: Escorts Kubota Limited sold 7,565 tractors in April 2023, a 9.1% Declined on YOY

Quality and performance will remain top priorities for the firm and will continue to prioritize innovation and improving the customer experience.

"Our efforts are aligned with our mid-term business plan for achieving the targeted growth in the coming years," stated Nikhil Nanda, Chairman and MD of Escorts Kubota.