Auto stock jumps 3% after HDFC mutual funds increases its stake in the company

This automobile stock engaged in manufacturing agricultural machinery, construction equipment, and railway systems, offering a diverse range of products globally, jumped 3 percent after increasing its stake to 5.023 percent in the company by HDFC mutual funds.

Stock Price Movement

With a market capitalization of Rs. 32,970.37 crores, the share of Escorts Kubota Limited has reached an intraday high of Rs. 2957.05 per equity share, rising nearly around 3.02 percent from its previous day’s close price of Rs. 2870.25. Since then, the stock has retreated and is closed at Rs. 2947 per equity share. 

What Happened

HDFC Mutual Fund has increased its stake in Escorts Kubota Limited to 5.33 percent, up from 4.88 percent. This increase follows the acquisition of 64,69,510 shares, representing 0.45 percent of the company’s total voting capital. 

As of February 27, 2025, HDFC Mutual Fund holds a total of 1,11,87,77,540 equity shares in the company. This move further solidifies HDFC Mutual Fund’s position as a significant shareholder in Escorts Kubota, in line with its strategic investment plan. The acquisition was made through open market transactions.

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Future Outlook and Guidance

The company expects the domestic tractor industry to grow by 6 percent to 7 percent for the full year. For Q4 FY25, the company anticipates strong growth of 14 percent to 15 percent, with steady growth expected in FY26, depending on the monsoon. 

In the export market, the company is aiming for double-digit growth, particularly in Europe, thanks to Kubota’s global network. Overall, the company is optimistic about its performance, both in domestic and international markets.

Segment Analysis

In the Agri Machinery segment, the total tractor industry volume, including both domestic and export, reached 2.89 lakh units, showing 12.7 percent year-on-year (YoY) growth. Escorts Kubota’s tractor sales increased by 4.5 percent YoY, with a total of 32,556 units sold.

In the construction equipment sector, the market for cranes, backhoe loaders, and mini excavators grew by 14 percent YoY. Although the total number of machines sold slightly decreased to 1,989 units from 2,008 last year, the revenue from construction equipment rose by 4.1 percent, reaching Rs. 515.7 crores. Additionally, the EBIT margin improved from 8.1 percent to 11.0 percent, indicating a positive trend in profitability.

Recent quarter results

Escorts Kubota Limited’s revenue has increased from Rs. 2,728 crore in Q3 FY24 to Rs. 2,948 crore in Q3 FY25, which has grown by 8.06 percent. The net profit has also grown by 7.36 percent from Rs. 299 crore in Q3 FY24 to Rs. 321 crore in Q3 FY25.

Written By – Nikhil Naik

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