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.

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Equity Bottom-Up

Escorts Kubota Limited / Equity Bottom-Up

<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)

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<div><div><div><div><ul><li>Demand Outlook: The management expects the tractor industry volume to grow by ~20% in Q1FY23E on account of normal monsoon expectations and higher food grain prices.</li></ul><div><div><div><div><ul><li>Margin outlook: To mitigate the impact of higher input cost, company took a price hike of ~2% in Apr’22 and would further take a price hike of ~2% in Q2FY23 as well.</li></ul><div><div><div><div><ul><li>Railway Equipment Division (RED): The segment revenue stood at Rs 173 Cr for the quarter as against Rs 146 Cr in Q4FY21.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Demand Outlook: The management expects the tractor industry volume to grow by ~20% in Q1FY23E on account of normal monsoon expectations and higher food grain prices.Margin outlook: To mitigate the impact of higher input cost, company took a price hike of ~2% in Apr’22 and would further take a price hike of ~2% in Q2FY23 as well.Railway Equipment Division (RED): The segment revenue stood at Rs 173 Cr for the quarter as against Rs 146 Cr in Q4FY21.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

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Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>PVs – supply chain constraints to persist; demand holding strong: We expect PV volume to be slightly lower on MoM basis due to supply<br>side issues and higher monthly base.</li></ul><div><div><div><ul><li>2Ws – demand revival remains muted: Domestic 2W dispatches are expected to improve on MoM basis, albeit at a slower pace, led by opening up of schools &amp; offices, beginning of marriage season and improving rural economics.</li></ul><div><div><div><div><ul><li>Tractors – moderating growth on a high base: We expect tractor demand to ease due to a high base.</li></ul></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PVs – supply chain constraints to persist; demand holding strong: We expect PV volume to be slightly lower on MoM basis due to supply side issues and higher monthly base.2Ws – demand revival remains muted: Domestic 2W dispatches are expected to improve on MoM basis, albeit at a slower pace, led by opening up of schools &amp; offices, beginning of marriage season and improving rural economics.Tractors – moderating growth on a high base: We expect tractor demand to ease due to a high base.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Automobile Sales Estimates – 2Ws Rising from Dust; Demand Outlook for PVs and CVs Positive

<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.

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Escorts Kubota Limited (ESCORTS IN)

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

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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...

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Result Update- Escorts

Escorts posted good set of numbers in Q4FY22 driven by a richer Tractor mix and a recovery in the Construction Equipment business. The company...

Axis Direct

Automobile Sales Estimates – 2Ws Rising from Dust; Demand Outlook for PVs and CVs Positive

Based on our channel checks, we saw some improvement in 2W demand in April’22 while demand in CV and PV segments continued to remain robust.

Nirmal Bang

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

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