Kotak Institutional Equities issues ‘sell’ rating on Escorts Kubota amid weak outlook – CNBC TV18

Escorts Kubota shares have declined by 24% from the 52-week high price of ₹4,420 apiece, hit in late September this year. Kotak Institutional Equities anticipates a further downside of 10% and has issued a ‘sell’ rating with a target price of ₹3,000 per share.

The domestic brokerage shared insights on Escorts Kubota’s outlook for the tractor and construction equipment industries after a management meeting. For the domestic tractor market, the company expects mid-single-digit growth in 2024–25.

However, on the export front, the outlook remains weak. Similarly, the construction equipment segment has been under pressure for the past few quarters.

Kotak Institutional Equities believes that margins could improve once the integration with Kubota is fully completed.

The company’s current focus is on regaining lost market share in the tractor segment, where it has ceded ground to Mahindra & Mahindra over the last few quarters.

On the back of this Kotak Institutional Equities has a ‘sell’ call in the stock.

On Tuesday, shares of Escorts Kubota closed 2% lower at ₹3,346 per share.