Escorts Kubota Ltd - Stock Valuation and Financial Performance

From a very modest beginning in 1944 to one of the largest engineering conglomerates in India today, the journey of Escorts is deeply intertwined with that of nation-building. For over seven decades, the company has been helping drive prosperity and happiness for millions of people across the social spectrum as their partner of choice. Transforming lives on the strength of imagination, engineering prowess, and advanced technologies.

The company is operating in the high-growth sectors of Agri Machinery, Material Handling, Construction Equipment and Railway Equipment. The Group has earned the trust of over millions of customers by way of product and process innovations over seven decades of its existence. Escorts endeavors to transform lives in rural and urban India by leading the revolution in agricultural mechanization, modernization of railway technology and transformation of Indian construction.

Business area of the company

The company is one of India’s leading engineering conglomerates with a presence across key sectors of agriculture, infrastructure and railways. Across its businesses, the company continues to foster collaborations, drive modernisation and implement advanced manufacturing practices, to bring the best that the world has to offer to India; and take India’s best capabilities to the world.

Key business divisions

Escorts Agri Machinery (EAM): The company is one of India’s foremost tractor manufacturers, offering tractors from 12 HP to 120 HP under three esteemed brands, Farmtrac, Powertrac and Steeltrac. EAM is shifting its focus from products to services and from machinery to solutions, with an aim to help enhance agricultural productivity and yields, directly impacting farmers’ prosperity and nation’s food sufficiency.

Escorts Construction Equipment (ECE): The company is among the world’s largest manufacturers of Pick-and-Carry (PnC) hydraulic mobile cranes. It is a substantial player in PnC cranes segment in the domestic market. ECE’s range of reliable construction and material handling equipment supports India’s infrastructure growth.

Railway Equipment Division (RED): It manufactures advanced components that exemplify safety, comfort and reliability. These include brake systems, couplers, suspension systems, shock absorbers and rail fastening systems, among others. RED’s wide array of railway products enables the modernisation of the Indian Railways.

History and milestones

• 1944 - Launch of Escorts (Agents).
• 1948 - Pioneered farm mechanization in the country by launching Escorts Agricultural Machines, with a franchise from US-based Minneapolis Moline, for marketing tractors, implements, engines & other farm equipment. Launch of Escorts (Agriculture and Machines).
• 1949 - Franchise of Massey Ferguson tractors for northern India.
• 1951 - Escorts established India’s first private Institute of Farm Mechanisation at Delhi.
• 1953 -Escorts (Agents) and Escorts (Agriculture and Machines) merged to form Escorts Agents.
• 1954 - 1st industrial venture of Escorts to manufacture piston rings in collaboration with Goetze of Germany, in an era when joint ventures of Indian firms with foreign companies were virtually unheard of.
• 1958 - Started importing Massey Ferguson tractors from Yugoslavia for marketing the same in India.
• 1959 - Collaboration with Mahle of Germany to manufacture pistons. Soon, Escorts became the largest producer of piston assemblies in India.
• 1960 - Setting up of Escorts.
• 1961- Setting up of manufacturing base at Faridabad for manufacture of tractors in collaboration with URSUS of Poland and 50% indigenous components. Launch of Escort brand of tractors. Collaboration with CEKOP of Poland for manufacture of motorcycles and scooters. Escorts moves into high gear by nurturing the two wheeler culture. The first Rajdoot motorcycle rolls off the assembly line.
• 1969 - Escorts Tractors was born. A technical and financial joint venture with the global giant Ford Motor Company, USA, to manufacture Ford tractors in India. The years ahead saw Escorts grow as the largest tractor manufacturer in India.
• 1969 - Escorts Institute of Farm Mechanisation (EIFM) established at Bangalore.
• 1969 - Escorts Employees Ancillaries (EEAL), a unique venture in industrial democracy comes into being.
• 1971 - 1st February, the first tractor Ford 3000 rolled out of the factory.
• 1974 - Crossing national boundaries, Escorts exports for the first time. After winning a global tender, 400 tractors were exported to Afghanistan, which was perhaps the world's largest ever airlift of tractors.
• 1976 - Ford 3600, an advancement in Farm Mechanisation launched. Trial production of in-plant manufacturing of engine parts (Block & Head).
• 1977 - Escorts enters the world of self-developed technology by setting up its first independent R&D Center. Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own Engines for E-27 and E-37. Due to constant technology absorption, indigenisation level touched 72% for Ford tractors. 2nd plant at Bangalore for manufacturing piston assemblies was set up.
• 1979 - Collaboration with JCB Excavators, UK for manufacture of excavators.
• 1980 - Foray into healthcare, Escorts Hospital and Research Center set up in Faridabad.
• 1983 - Escorts Tractors (ETL) established a state-of-the-art research and development centre to spearhead newer breakthroughs in farm mechanisation and to maintain industry leadership. Line concept introduced for engine block machining. 11,000 tonne floating dry-dock Escorts I launched.
• 1984 - JV Escorts-Yamaha to manufacture motorcycles.
• 1984 - Signing of agreement with the Japanese bike giant Yamaha to manufacture motorcycles with Yamaha technology. Collaboration with Jeumont Schneider of France to manufacture EPABX systems Collaboration with Dynapac of Sweden to manufacture vibratory road compactors.
• 1985 - Escorts Tractors (ETL) offered its first bonus issue (1:1).
• 1988 - Escorts Heart Institute and Research Centre (EHIRC), a world class cardiac care facility was launched in New Delhi.
• 1989 - Joint Venture with Claas of Germany to manufacture harvester combines.
• 1990-91 - First public issue in February 1991, over-subscribed four times. Shares listed on Delhi and Bombay Stock Exchanges.
• 1993 - Ford 3620 tractor launched.
• 1996 - Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC Tractor.
• 1997 - Joint Venture with Carraro of Italy for manufacturing and marketing of transmission and axles. Joint Venture with First Pacific Company of Hong Kong - Escotel Mobile Communications.
• 1998 - POWERTRAC series of tractors launched.
  MoU was signed with Long Manufacturing Company, USA for setting up a joint venture in USA.
• 1999 - MoU for Joint Venture with a Polish company POL-MOT was signed for assembly, manufacturing and marketing of farm machinery.
• 2004 - Divested Escotel Mobile Telecommunications to Idea Cellular.
• 2005 - Divested Escorts Heart Institute and Research Centre (EHIRC) to Fortis Healthcare.
• 2006 - Divested in Carraro India.
• 2006 - Escorts sets up Rs 25 Crore facility in Uttaranchal for manufacture of auto components and railway equipment.
• 2007 - Escorts Construction Equipment (ECEL) launches TRX series of Pick-n-Carry Cranes in the 23T, 17T and 16T Category.
• 2008 - Escorts Construction Equipment ties up with Construction Industry - Development Council to provide accredited training programs.
• 2009 - Escorts Construction Equipment. Ties up with Zoomlion, China.
• 2011 - Escorts Ltd. signs exclusive agreement with European firm for disc brake system for railway coaches.
• 2012 - Escorts launches New Powertrac Ds-Plus Tractors in Hyderabad-Escorts ties up with Amul Industries for Mini Tractors.-Escorts launches India's first Executive Tractor.
• 2015 - On 24 June 2015, the company signed a five-year deal with US-based IT firm Cognizant Technology Solutions. This deal is to bring digital transformation to all its business segments including agri-machinery, material handling and construction equipment, railway equipment and auto components.
• 2016 - Escorts Ltd Divests Auto Products Business.
• 2016 - Escorts Ltd Launches New 80 & 90 HP Farmtrac Tractors in Europe & US. - Escorts unveils India’s first Electric Tractor Concept & Global Tractor Series.
• 2017 - Launched India’s first electric tractor concept, Farmtrac 26E, as part of the New Escorts Tractor
  Series (NETS), at Agritechnica, Germany.
• 2017 - Received prestigious IRIS Certification for design, development and manufacture of railway components.
• 2018 - Announced the Vision 2022 roadmap to align the transformational growth strategy for all three businesses
• 2018 - Partnered Doosan for an exclusive distribution agreement in India.
• 2019 - Introduced India’s first autonomous tractor concept.
• 2019 - Collaborated with Kubota to develop value-oriented tractors that cater to farming requirements in India and overseas markets.
• 2019 - Entered a JV with Tadano to produce specialized cranes that address high-capacity use cases.
• 2019 - Tied up with seven technology leaders: Microsoft, Reliance Jio, Trimble, Samvardhana Motherson Group, WABCO, Bosch and AVL.
• 2020 - Deepened partnership with Kubota, where the Japanese tractor and heavy equipment manufacturer picked up a 10% equity stake (post capital reduction) in Escorts, while Escorts received a 40% stake in Kubota’s India business
• 2020 - Set up the Rajan Nanda Innovation Lab (RNIL) to incubate new, promising and disruptive business ideas.
• 2020 - Launched India’s first hybrid tractor concept, hybrid backhoe loader concept and multi-utility rural transport vehicle concept.