Should You Buy This Rekha Jhunjhunwala Stock Turning Ex-Dividend Soon?

Escorts Kubota is a large cap Capital Goods company that recorded a market cap of Rs 28,763.05 Cr during Friday's closing session. One of India's top engineering conglomerates, Escorts Kubota Limited, is engaged in the manufacturing of tractors.

Escorts Kubota FY23 Dividend

The Board of Directors of the company have declared a final dividend @ 70% per share of face value of Rs. 10/- each (i.e. Rs. 7.00 per share) for FY23.

Dividend, if declared at the AGM, will be paid, within 30 days from the declaration to those whose names appear as beneficial owners as at the end of the business hours on June 30, 2023 i.e. fixed as the record date.

As per the data of BSE, Escorts Kubota is turning ex-dividend on June 30 due to T+1 settlement mechanism of India.
The 77th Annual General Meeting ("AGM") of the Members of the Company will be held on Friday, July 14, 2023 and the Register of Members and Share Transfer Books of the Company shall remain closed from July 1, 2023, to July 14, 2023 (both days inclusive) for the purpose of determining the names of eligible shareholders, according to Escorts Kubota.

Escorts Kubota has announced an equity dividend of 70.00% at a face value of Rs 10, or Rs 7 per share, for the financial year ended March 2023. This generates a dividend yield of 0.32% at the current share price of Rs 2181.10. The company has a solid track record of dividend declarations during the past five years. Escorts Kubota Ltd. has issued 19 dividends since August 31, 2001, according to Trendlyne statistics.

Escorts Kubota Results

The company's Q4FY23 consolidated net profit reached Rs 216.5 crore up 13.4% YoY from Rs 190.0 crore in Q4FY22. The company's total revenue from operations for the fourth quarter of FY23 was Rs 2,214.5 crore, up 17.4% from Rs 1,886.6 crore in the same period of FY22. EBIDTA was Rs 233.2 crore for the quarter that ended in March 2023 as opposed to Rs 248.2 crore for the same quarter the year before. Tractor volume was 24,765 units, up 13.1% year on year, while segment revenue was Rs 1,557.50 crore, up 13.6%.

The segment's EBIT margin was 9.9%. Sales of construction equipment were 1,528 units, an increase of 18.8% year on year. Revenues for the sector increased by 20.5% to Rs 384.80 crore, while the EBIT margin for the same period was 8.1%. Revenues from the company's railways product sector increased 37.3% to Rs 237.20 crore. EBIT margin increased to 14% in Q4FY23.

Escorts Kubota Share Price

On Friday the shares of Escorts Kubota closed on the NSE at Rs 2,176 apiece up by 1.10% from the previous close of Rs 2,152.30. The stock made a 52-week-high of Rs 2,358.35 on (01-Dec-2022) and a 52-week-low of Rs 1,306.70 on (30-June-2022).
During Q4FY23, the company recorded promoters shareholding of 67.65%, FIIs stake of 5.77%, DIIs stake of 9.49%, public stake of 15.13% and others stake of 1.96%.

As per the shareholding of Escorts Kubota available on BSE for the quarter ending 28-May-23, Rekha Jhunjhunwala wife of late ace investor Rakesh Jhunjhunwala held fully paid up equity shares of 17,90,388 or 1.62% stake in the company.

Buy Escorts Kubota?

Aditya Welekar, Sr. Research Analyst and Shridhar Kallani, Research Associate of Axis Securities said "Considering synergies with Kubota in the Agri-machinery business, double-digit growth in Construction Equipment Division and Railway Equipment Division in FY25E, strong cash flows, and negligible debt, we maintain our BUY rating with a revised target price of Rs 2,310/share (Rs 2,200/share earlier), valuing the company at 21x FY'25E EPS."

Disclaimer

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