ESCORTS

Escorts Kubota’s (ESCORTS) Q4 results were ahead of our estimates, with better-than-expected margins in the tractor segment. Both MM and tractors reported a healthy margin revival QoQ in a seasonally weak quarter.  While the demand outlook for tractors is improving, ESCORTS continues to lose market share due to an unfavorable regional mix—a trend that is likely to persist even in FY26. Further, the outlook for the construction equipment segment remains weak, following sharp price hikes undertaken to comply with new emission norms. Given these concerns, the stock at 31.6x/27.7x FY26E/27E EPS appears fairly valued.