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Escorts Kubota Ltd

NSE: ESCORTS BSE: 500495

3518.60

(-2.25%)

Wed, 04 Mar 2026, 06:35 pm

Escorts Kubota Analysis

dividend

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Pros

  • Dividends after 3 years are expected to be thoroughly covered by earnings (10.7x coverage).
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Cons

  • Escorts is not paying a notable dividend for India, therefore no need to check if the payments are increasing.
  • No need to calculate the sustainability of Escorts's dividends as it is not paying a notable one for India.
  • Escorts is not paying a notable dividend for India, therefore no need to check if the payments are stable.
  • Escorts's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
  • Escorts's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

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Pros

  • Escorts's earnings growth is expected to exceed the low risk savings rate of 7.2%.
  • Escorts's earnings are expected to increase by more than the low risk growth rate in 3 years time.
  • Performance (ROE) is expected to be above the current IN Machinery industry average.
  • An improvement in Escorts's performance (ROE) is expected over the next 3 years.
  • Escorts's revenue growth is expected to exceed the India market average.
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Cons

  • Cash flow for Escorts is expected to decrease over the next 2 years.
  • Escorts's earnings are expected to grow by 14% yearly, however this is not considered high growth (20% yearly).
  • Escorts's earnings growth is positive but not above the India market average.
  • Escorts's earnings are expected to decrease over the next year.
  • Escorts's net income is expected to increase but not above the 50% threshold in 2 years time.
  • Escorts is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
  • Escorts's revenue is expected to increase but not above the 50% threshold in 2 years time.
  • Escorts's revenue is expected to grow by 10.2% yearly, however this is not considered high growth (20% yearly).

health

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Pros

  • Escorts is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Escorts is profitable, therefore cash runway is not a concern.
  • Escorts is profitable, therefore cash runway is not a concern.
  • Debt is well covered by operating cash flow (4151.9%, greater than 20% of total debt).
  • Debt is covered by short term assets, assets are 151.6x debt.
  • Escorts's cash and other short term assets cover its long term commitments.
  • The level of debt compared to net worth has been reduced over the past 5 years (26.2% vs 0.6% today).
  • Interest payments on debt are well covered by earnings (EBIT is 32.2x coverage).
  • Escorts's level of debt (0.6%) compared to net worth is satisfactory (less than 40%).
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Cons

  • High level of physical assets or inventory.

management

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Pros

  • The tenure for the Escorts board of directors is about average.
  • Nikhil's compensation has been consistent with company performance over the past year, both up more than 20%.
  • The tenure for the Escorts management team is about average.
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Cons

  • Nikhil's remuneration is higher than average for companies of similar size in India.
  • Escorts individual insiders have only sold shares in the past 3 months.

misc

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Pros

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    Cons

    • Escorts has significant price volatility in the past 3 months.

    past

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    Pros

    • Escorts has delivered over 20% year on year earnings growth in the past 5 years.
    • Escorts used its assets more efficiently than the IN Machinery industry average last year based on Return on Assets.
    • Escorts has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
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    Cons

    • Escorts's 1-year earnings growth is negative, it can't be compared to the 5-year average.
    • Escorts has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
    • Escorts's 1-year earnings growth is negative, it can't be compared to the IN Machinery industry average.

    value

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    Pros

    • ESCORTS outperformed the Machinery industry which returned -23.7% over the past year.
    • ESCORTS outperformed the Market in India which returned -14.5% over the past year.
    • NSEI:ESCORTS is up 16.4% outperforming the Machinery industry which returned 8.3% over the past month.
    • NSEI:ESCORTS is up 16.4% outperforming the market in India which returned 8% over the past month.
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    Cons

    • Escorts's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
    • Escorts's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
    • Escorts is overvalued based on assets compared to the IN Machinery industry average.
    • Escorts is poor value based on expected growth next year.
    • Escorts is overvalued based on earnings compared to the IN Machinery industry average.
    • Escorts is overvalued based on earnings compared to the India market.

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