ESCORTS

: Guidance - Concall Update

• Management expects the tractor industry for FY27 to be flattish, with a potential range of 2-3% up or down, anticipating a subdued H2 due to high base effects, subnormal monsoon forecasts, and El Nino impact. • The company is confident of achieving positive growth and market share improvement in tractor volumes for FY27, irrespective of the industry outlook, driven by recent product launches and channel development. • The non-tractor agri segment (farm implements) is expected to grow at a 20%+ CAGR over the next three years, supported by product pipeline expansion and channel growth. • Commodity cost increases are anticipated to be around 5-6% as a percentage of revenue, with a 1.5% price hike already implemented on tractors and construction equipment, which is insufficient to cover the expected increases. • Normal CapEx for FY27 is projected at INR350-400 crores, with an additional INR500 crores for the greenfield facility this year, part of a larger INR5,000+ crore investment over 7-10 years. • An additional INR500 crores will be invested in the captive finance division over the next 12-15 months, following an initial INR200 crore investment, with a long-term ROA aspiration of 1.5-2%. • The Construction Equipment segment anticipates short-term challenges due to macro factors but expects a turnaround in H2 FY27 and strong medium-term demand from public infrastructure development.