Escorts Kubota Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 3,231.37 Cr (+16.34% YoY) and PAT growth of -20.59% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 02, 2026 |
|---|---|
| Revenue (Q2) | Rs. 3,231.37 Cr (+16.34% YoY) |
| PAT (Q2) | Rs. 255.04 Cr (-20.59% YoY) |
| EBITDA margin | 9.05% (-403 bps YoY) |
| EPS (Q2) | Rs. 23.18 (-20.59% YoY) |
Revenue grew 16.34% YoY to Rs.3,231.37 Cr, but EBITDA margin compressed ~403 bps YoY to 9.05% and PAT fell 20.59% YoY as commodity costs exceeded management's expectations. Construction Equipment is the standout with revenue +58.59% YoY and EBIT margin up 411 bps to 7.88%, while the core tractor business was flat (+0.4% volumes). Management guides only gradual margin improvement from Q4 FY27 with normalization in FY28, and the Rs.376.60 Cr Q2 inventory build plus negative H1 CFO of Rs.106.68 Cr weigh on near-term earnings quality.
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue: tractors in-line/behind, CE ahead | "in-line to behind on wholesale volumes"; CE "ahead" | Revenue +16.34% YoY; CE revenue +58.59%; tractor volumes +0.4% | Played out |
| Margins compressing on inputs (rubber ~Rs.278–290/kg vs FY26 avg Rs.197) | "the Q1 trajectory… more likely to extend than reverse" | EBITDA margin 9.05% vs 11.18% Q1 / 13.08% YoY | Played out |
| CE margin expansion as the offset | "the one place margins can expand" | CE EBIT margin 7.88% vs 3.77% (+411 bps) | Played out |
| Treasury income sustainability a live question | MTM precedent flagged | Other income −40.76% QoQ | Played out |
| FY27 tractor-industry guidance recalibration | "the single biggest guidance question for this call" | Filing reiterates Q4 recovery/FY28 normalization; no industry recalibration stated — not addressed in the filing; remains open for the call | Partially |
| Faridabad CGST order Rs.8.26 Cr (pre-registered one-time) | "reportedly dropped Rs.1.56 Cr but confirmed Rs.8.26 Cr" | Not identified in the filing (exceptional items nil; no provision disclosed) — per pre-call note only | Not observable |
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| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Additional 1.5–2% commodity cost pressure in Q2 FY27 | Q1 FY27 earnings call (Aug 3, 2026) | EBITDA margin 9.05% vs 11.18% QoQ and 13.08% YoY; management: cost pressures "higher than anticipated" — the guided hit landed, and overshot | Met |
| Margin recovery from Q4 FY27 | Q2 FY27 press release (Nov 2, 2026): "we expect margins to improve gradually from Q4 and return closer to normal levels in FY28" | N/A this quarter | Too Early |
| Maintain FY27 margin on a full-year basis | Q4 FY26 earnings call (May 2026) | H1 FY27 EBITDA margin 10.11% vs H1 FY26 13.08% — trajectory | Missed |
| FY27 capex Rs.850–900 Cr (Rs.450–500 Cr greenfield land + Rs.350–400 Cr normal) | Q1 FY27 earnings call (Aug 3, 2026) | H1 FY27 Rs.514.94 Cr (PPE Rs.126.68 + intangibles Rs.9.63 + leasehold rights Rs.378.63) | On Track |
| EKL tractor growth above a mid-single-digit industry | Q1 FY27 earnings call (Aug 3, 2026) | Q2 volumes +0.4% on a distorted base; Sep −16.7% | Too Early |
| CE industry +12–15%; EKL CE margins toward high single digit | Q1 FY27 earnings call (Aug 3, 2026) | CE volumes +53.9%, revenue +58.59%, EBIT margin 7.88% (+411 bps) | On Track |
| "Cost pressures remained higher than anticipated" | Q2 FY27 press release (management quote) | EBITDA margin −403 bps YoY to 9.05%; CoM at 66.88% of revenue vs 64.11% | Confirmed |
| Festive shift / GST-cut base explains September weakness | Management framing of September volume decline | Tractor volumes +0.4% for the quarter; AM revenue −2.8% QoQ — H2 will test it; festive Oct volumes not in this filing | Too Early |
| CE demand driven by government infra investment | Management commentary in press release/notes | CE volumes +53.9%, highest-ever September; margin +411 bps | Confirmed |
| Metric | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|---|---|
| Tractor volumes | 33,877 | 36,955 | 32,257 (derived) | 36,862 | 34,017 |
| Tractor YoY | +30.3% | +13.5% | — | +20.5% | +0.4% |
| CE volumes | 1,146 | 1,716 | — | 1,344 | 1,764 |
| CE YoY | −17.8% | −13.7% | — | +27.4% | +53.9% |
| EBITDA margin | 13.08% | n/a | n/a | 11.18% | 9.05% |
Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.