Escorts Kubota margin falls to 8.88% as costs outpace revenue
Revenue rose 16.19% YoY, but expenses grew 21.53%; other income made up 36.44% of pre-tax profit.
Filed 02 Nov 2026, 14:29 IST · Escorts Kubota Ltd (ESCORTS)
Key takeaways
- Revenue grew +16.19% YoY, but expenses grew +21.53%, cutting operating margin by 4.01 percentage points to 8.88%.
- Net profit fell -21.34% YoY as operating profit declined -19.93% and other income contributed 36.44% of pre-tax profit.
- Operating margin fell for a third straight quarter to 8.88%, 2.65 percentage points below the 11.53% median for 88 Industrials peers.
Price around the results
Revenue growth did not translate into operating profit
Escorts Kubota’s consolidated revenue grew 16.19% YoY to Rs 3,243.41 cr, but operating profit fell 19.93% to Rs 288.02 cr. Expenses grew 21.53%, faster than revenue, which reduced operating margin by 4.01 percentage points to 8.88%. Net profit declined 21.34% to Rs 250.22 cr.
Other income cushioned a weaker pre-tax result
Other income of Rs 123.42 cr contributed 36.44% of pre-tax profit, making reported earnings less representative of operating performance. The tax rate rose 0.59 percentage points YoY to 26.13%, adding to the pressure on net profit; interest expense rose only 2.19% and was not the main driver.
Margin decline extended into a third consecutive quarter
Sequentially, revenue increased 1.12% while expenses rose 3.59%, narrowing operating margin by 2.17 percentage points. Other income fell 40.62% QoQ and the tax rate increased 4.55 percentage points, contributing to the 35.16% decline in net profit. Margin has now fallen from 13.25% in Q3FY26 to 12.82%, 11.05% and 8.88% over the following three quarters.
Operating margin trails the Industrials peer median
Escorts Kubota’s 8.88% operating margin was 2.65 percentage points below the 11.53% median among 88 Industrials companies that have reported the same quarter. The company ranked 27th from the bottom on this measure. The stock’s immediate post-results move is not yet covered; across eight previous result reactions, it rose four times and fell four, with a median absolute move of 1.60%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,243 cr | ₹3,208 cr | +1.12% | +16.19% |
| Other income | ₹123 cr | ₹208 cr | -40.62% | -8.07% |
| Expenses | ₹2,955 cr | ₹2,853 cr | +3.59% | +21.53% |
| Operating profit | ₹288 cr | ₹354 cr | -18.74% | -19.93% |
| Operating margin (%) | 8.88% | 11.05% | — | — |
| Interest | ₹5 cr | ₹5 cr | -10.21% | +2.19% |
| Depreciation | ₹68 cr | ₹65 cr | +4.76% | +9.51% |
| Profit before tax | ₹339 cr | ₹492 cr | -31.17% | -20.72% |
| Tax | ₹89 cr | ₹106 cr | -16.67% | -18.91% |
| Net profit | ₹250 cr | ₹386 cr | -35.16% | -21.34% |
| EPS (₹) | ₹22.74 | ₹35.08 | -35.18% | -21.37% |
Operating margin of 8.88% compares with a Industrials sector median of 11.53% across 88 peers that have reported Q2FY27.
What to watch
- Whether operating margin moves up from 8.88% after three consecutive quarterly declines.
- Whether expense growth moderates from +21.53% YoY and +3.59% QoQ.
- Whether other income remains close to 36.44% of pre-tax profit and the tax rate stays near 26.13%.