Though Escorts volume fell by 13.8% in the June quarter, it reported a sharp recovery of 22.8% in the month of June.
The government’s direct cash transfer program and higher minimum support prices for agriculture produce augurs well for the rural income, a major positive for Escorts.
ET Intelligence group: Tractor maker Escorts is likely to benefit from the reviving demand in the rural areas. Data including rising sowing acreages and higher reservoir levels due to normal monsoon season so far in agricultural areas and government’s stimulus programs suggest that the company may be among a few automakers to report volume growth for the current fiscal. This may help the stock to retain its premium valuation in the medium term.