August8 , 2022

Rakesh Jhunjhunwala buys 1.39% stake in this tractors manufacturer during Q1

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Rakesh Jhunjhunwala who is often referred to as the ‘Warren Buffet of India’ has once again added Escorts Kubota, earlier known as Escorts, to his portfolio during the first quarter of FY23 (April to June 2022 period). In the March quarter, Jhunjhunwala’s shareholding in Escorts had plunged below 1% and his name was not mentioned in the public holding of the company. However, looks like Jhunjhunwala is optimistic in Escorts Kubota. As of now, this is the only stock that Jhunjhunwala has bought during Q1FY23.

As per the latest shareholding pattern, Rakesh Jhunjhunwala has bought 18,30,388 equity shares or 1.39% in the company during Q1FY23.

In March 2022 quarter, Jhunjhunwala’s name did not appear in Escorts shareholding list, which meant his stakes are below or around 1%. As of December 2021, Jhunjhunwala had held 75 lakh equity shares or 5.68% in Escorts.

As per Trendlyne data, Escorts Kubota is the new investment in Jhunjhunwala’s portfolio. His shareholding is valued at around 317.2 crore as of now.

On BSE, Escorts shares stood at 1732 apiece on Wednesday down by 24.25 or 1.38%. Its market cap is around 22,852.11 crore.

Escorts shares have dived in Q1FY23, however, picked up momentum in July. So far this month, the shares have jumped more than 20%. In a year, the gain is around 48%.

In April – June 2022 period, Escorts Kubota’s sold 26,797 tractors up by 3.3% from 25,935 tractors in the same quarter last year.

While announcing sales data on July 1, Escorts said, “With onset of monsoon, and likely record Kharif crop production, rural liquidity and farmer sentiments are expected to gradually improve.”

In the auto monthly sales report, Ashwin Patil, an analyst at LKP Securities said, “tractors segment after a weak FY22 has seen a strong surge in numbers in June on a sequential basis. However, we saw yoy decline in tractor sales as there was a ban on exports of various food grains like wheat, sugar, etc in May and the base of June was too high.”

For Escorts, Patil said, “Escorts Kubota witnessed a similar trend as its sales expanded by 20.8% mom while declined by 20% yoy. Going forward, as monsoon revives we foresee a good sequential growth for tractors in the ensuing months.”

In FY22, Escorts posted a net profit of 765.6 crore down from 874.1 crore in the previous year. Its total revenue is around 7,152.7 crore up by 3.2% yoy. Tractor sales were 94,228 units down by 11.7%.

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