Escorts -Ready for Multibagger Gains - 1100 Coming Soon

Buy at CMP 818 - for the Targets of 890 to 1090 , Time Frame - 5 Months to 12 Months 

TRIGGERS

1) Strong Q4 and YOY Profits are expected as  Q3 Profit Up by 305% YOY at 92 cr. Q2 Profits up by 147% at 71 Cr. 

2) Beneficiery of Government’s push on infrastructure, housing, construction, and the road segment also at which the government is planning to do the Bharatmala project

3)  GST rates are reduced to 18% from 28% , especially on the earthmoving and road segment machinery.

4)  On Jan 2018, Escorts Ltd.  The company has reported net sales of Rs.1213.23 crores during the period ended December 31, 2017 as compared to Rs.1100.79 crores during the period ended December 31, 2016.

5)  For the quarter ended December 31, 2017 (Q3FY18), Escorts reported 12% yoy tractor volume growth. This growth was led by 11% yoy growth in domestic volumes and a 41% yoy growth in exports.

6) ) The company sold 18,930 tractors in Q3FY18 against 16,963 tractors in Q3FY17. The volume number for Q3FY18 was its second best ever, after it reported all-time high volumes of 20,358 tractors in Q2FY18.

The Escorts Group is an Indian engineering company that operates in the sectors of agri-machinery, construction and material handling equipment, and railway equipment. Headquartered in Faridabad, aryana, the company was launched in 1944 and has marketing operations in more than 40 countries.​

Escorts Agri Machinery

The pioneer of farm mechanization in India, Escorts Agri Machinery has in the last seven decades, committed itself to enhancing India’s agricultural productivity and add value to the farmer’s life. Escorts currently provides technologically superior range of 12 HP to 75 HP tractors with under two star brands - Farmtrac and Powertrac. With a growing network of over 800 customer touch-points, Escorts Agri Machinery ensures the satisfaction of its customer base of over 14,00,000 and also promises maximum uptime of their tractors and equipment. 

By the month of  October, company had an order book of almost Rs 275 crore plus in the railway business which almost addresses our next one year’s revenue target for this business and  looking at about 20% plus growth in the railway business this year and expecting a similar growth probably will continue going forward also for the next four-five year

Escorts Agri Machinery was launched in 1960. The company manufactures tractors under the brand names of Farmtrac, Powertrac and Steeltrac. It has four manufacturing plants in Faridabad and one subsidiary unit in Poland in the name of Farmtrac Europe

The GST rate correction is expected to be strong trigger for the demand to pick up for earthmoving and road machinery segments where there was de-growth in Q2.  

Escorts Construction Equipment

Escorts Construction Equipment manufactures and markets construction and material handling equipment like pick and carry cranes, backhoe loader, vibratory rollers and forklifts. The manufacturing and assembly facility is located in Faridabad.

On the construction sector, company's expectation was that in the second half of this year, it should be able to turn around and probably be in black. But this time, since in Q2 itself we saw very good volumes coming up which led to the turnaround happening probably a quarter earlier than what it had anticipated initially. company is pretty bullish on the construction equipment business this year

Escorts Railway Products

Escorts Railway Products manufactures and supplies critical railway components such as air brake system, EP brake system, draft gears and couplers, composition brake blocks, dampers and rubber components to Indian Railways.

On November 30, 2017, India Ratings and Research (Ind-RA), a Fitch Group company, upgraded ratings on Escort’s credit facilities. These are summarized as follows:

1) Fund based working capital limits (Rs434cr) – upgraded from IND A / A1 to IND A+ / A1+

2) Non-fund based working capital limits (Rs398cr) – upgraded from IND A / A1 to IND A+ / A1+

3) Term loan (Rs176.3cr) – upgraded from IND A to IND A+

 Escorts Introduces indigenously engineered Electric Tractor at Agritechnica Nov 2017, Hanover, Germany .  On September 6, 2017, Escorts Ltd, India’s leading engineering conglomerate today launched India’s first Electric & Hydrostatic concept tractor and an expanded global portfolio of tractors for the export and domestic market in 22HP to 90 HP range under flagship brands Farmtrac and Powertrac compliant with tier 4 emission norms of Europe and America amidst 43 International distributors.

 Farmtrac unveils NETS,Global Tractor Series designed by Studio F. A. Porsche.

Introduces indigenously engineered Electric Tractor at Agritechnica 2017, Hanover, Germany

• Offers Perkins-powered tractor range from 75 to 110HP for global farmers

• Introduces Europe and US emission norms-compliant CRDi engine tractors

• Launches compact tractors with Hydraulic and Mechanical power transmission platform

• Showcases future-ready clean and green Electric Tractor

Hanover, November 13, 2011: Farmtrac Tractors Europe, leading International tractor producer, today unveiled its latest global tractor series created in cooperation with Studio F. A. Porsche ranging from 20-120 HP, at Agritechnica 2017 trade show for agricultural machinery and equipment, at Hanover, Germany. Studio F. A. Porsche brings in a unique blend of style and comfort in tractors giving it a complete new look and aesthetics for today's and new age global farmers.

  The company also showcased futuristic and eco-friendly electric tractor along with variants with Hydraulic and Mechanical power transmission platform within the NETSseries.

The Global NETS series has been introduced to meet customer demand from the United States, Europe, Latin America, Africa and ASEAN countries.

 Bajaj Finserv Ltd

 

Buy at CMP 5171 - for the Targets of 5665 to 5985 , Time Frame - 9  Months to 24 Months 

Bajaj Finserv Ltd., incorporated in the year 2007, is a Large Cap company (having a market cap of Rs 82408.91 Crore) operating in Finance sector. The company is engaged in life and general insurance through their joint ventures with Allianz SE namely balaji Allianz Life Insurance Company Ltd and Bajaj Allianz General Insurance Ltd. Bajaj Allianz Financial Distributors Ltd is a 50:50 joint venture company between the company and Allianz SE which is engaged in the business of financial products. The company operates 138 wind mills in Maharashtra with an installed capacity of 65.2 MW. Bajaj Auto Finance Ltd offers various consumer finance products to the customers such as auto loans, personal loans, loans for consumer durables and computers and SME finance

For the quarter ended 31-12-2017, the company has reported a Consolidated sales of Rs 3598.51 Crore, up 14.74 % from last quarter Sales of Rs 3136.36 Crore and up 10.72 % from last year same quarter Sales of Rs 3249.99 Crore Company has reported net profit after tax of Rs 1203.45 Crore in latest quarter