Q2 FY27 results analysis · November 02, 2026

Escorts Kubota Ltd Q2 FY27 Results Analysis: PAT Falls 20.59%, Margin Compresses 403 bps

−20.6%PAT year on year, Rs. 255.04 Cr

Cofacto ResearchPublished November 02, 20265 min readNegative read

Quick summary

Escorts Kubota Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 3,231.37 Cr (+16.34% YoY) and PAT growth of -20.59% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quick Details

Results date	November 02, 2026
Revenue (Q2)	Rs. 3,231.37 Cr (+16.34% YoY)
PAT (Q2)	Rs. 255.04 Cr (-20.59% YoY)
EBITDA margin	9.05% (-403 bps YoY)
EPS (Q2)	Rs. 23.18 (-20.59% YoY)

Quarter Snapshot

Revenue grew 16.34% YoY to Rs.3,231.37 Cr, but EBITDA margin compressed ~403 bps YoY to 9.05% and PAT fell 20.59% YoY as commodity costs exceeded management's expectations. Construction Equipment is the standout with revenue +58.59% YoY and EBIT margin up 411 bps to 7.88%, while the core tractor business was flat (+0.4% volumes). Management guides only gradual margin improvement from Q4 FY27 with normalization in FY28, and the Rs.376.60 Cr Q2 inventory build plus negative H1 CFO of Rs.106.68 Cr weigh on near-term earnings quality.

Q2 FY27 Expectations vs Results

Driver	Expected before results	What happened	Verdict
Revenue: tractors in-line/behind, CE ahead	"in-line to behind on wholesale volumes"; CE "ahead"	Revenue +16.34% YoY; CE revenue +58.59%; tractor volumes +0.4%	Played out
Margins compressing on inputs (rubber ~Rs.278–290/kg vs FY26 avg Rs.197)	"the Q1 trajectory… more likely to extend than reverse"	EBITDA margin 9.05% vs 11.18% Q1 / 13.08% YoY	Played out
CE margin expansion as the offset	"the one place margins can expand"	CE EBIT margin 7.88% vs 3.77% (+411 bps)	Played out
Treasury income sustainability a live question	MTM precedent flagged	Other income −40.76% QoQ	Played out
FY27 tractor-industry guidance recalibration	"the single biggest guidance question for this call"	Filing reiterates Q4 recovery/FY28 normalization; no industry recalibration stated — not addressed in the filing; remains open for the call	Partially
Faridabad CGST order Rs.8.26 Cr (pre-registered one-time)	"reportedly dropped Rs.1.56 Cr but confirmed Rs.8.26 Cr"	Not identified in the filing (exceptional items nil; no provision disclosed) — per pre-call note only	Not observable

Read our full results preview.

Management Guidance vs Delivery

What management said	Where	What happened	Verdict
Additional 1.5–2% commodity cost pressure in Q2 FY27	Q1 FY27 earnings call (Aug 3, 2026)	EBITDA margin 9.05% vs 11.18% QoQ and 13.08% YoY; management: cost pressures "higher than anticipated" — the guided hit landed, and overshot	Met
Margin recovery from Q4 FY27	Q2 FY27 press release (Nov 2, 2026): "we expect margins to improve gradually from Q4 and return closer to normal levels in FY28"	N/A this quarter	Too Early
Maintain FY27 margin on a full-year basis	Q4 FY26 earnings call (May 2026)	H1 FY27 EBITDA margin 10.11% vs H1 FY26 13.08% — trajectory	Missed
FY27 capex Rs.850–900 Cr (Rs.450–500 Cr greenfield land + Rs.350–400 Cr normal)	Q1 FY27 earnings call (Aug 3, 2026)	H1 FY27 Rs.514.94 Cr (PPE Rs.126.68 + intangibles Rs.9.63 + leasehold rights Rs.378.63)	On Track
EKL tractor growth above a mid-single-digit industry	Q1 FY27 earnings call (Aug 3, 2026)	Q2 volumes +0.4% on a distorted base; Sep −16.7%	Too Early
CE industry +12–15%; EKL CE margins toward high single digit	Q1 FY27 earnings call (Aug 3, 2026)	CE volumes +53.9%, revenue +58.59%, EBIT margin 7.88% (+411 bps)	On Track
"Cost pressures remained higher than anticipated"	Q2 FY27 press release (management quote)	EBITDA margin −403 bps YoY to 9.05%; CoM at 66.88% of revenue vs 64.11%	Confirmed
Festive shift / GST-cut base explains September weakness	Management framing of September volume decline	Tractor volumes +0.4% for the quarter; AM revenue −2.8% QoQ — H2 will test it; festive Oct volumes not in this filing	Too Early
CE demand driven by government infra investment	Management commentary in press release/notes	CE volumes +53.9%, highest-ever September; margin +411 bps	Confirmed

Key Numbers, Quarter by Quarter

Metric	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27	Q2 FY27
Tractor volumes	33,877	36,955	32,257 (derived)	36,862	34,017
Tractor YoY	+30.3%	+13.5%	—	+20.5%	+0.4%
CE volumes	1,146	1,716	—	1,344	1,764
CE YoY	−17.8%	−13.7%	—	+27.4%	+53.9%
EBITDA margin	13.08%	n/a	n/a	11.18%	9.05%

Key Investment Insights

Key Positives

Revenue grew 16.34% YoY to Rs.3,231.37 Cr; H1 revenue up 21.85% YoY
Construction Equipment revenue grew 58.59% YoY on volumes of 1,764 units (+53.9%), the highest-ever September
CE EBIT margin expanded 411 bps YoY to 7.88%, up from 3.77% (Q2 FY26) and 5.39% (Q1 FY27)
Net cash position of Rs.7,953.53 Cr in cash and investments with borrowings of only Rs.36.17 Cr
Capex of Rs.514.94 Cr in H1 tracking the guided Rs.850–900 Cr FY27 plan
Q2 PAT of Rs.255.04 Cr is fully clean — no exceptional items or discontinued operations in either period

Risk Factors

EBITDA margin compressed ~403 bps YoY to 9.05% (EBITDA −19.49% YoY); cost of materials rose to 66.88% of revenue from 64.11%
PAT fell 20.59% YoY and 34.14% QoQ to Rs.255.04 Cr; management said cost pressures were 'higher than anticipated'
Tractor volumes grew only +0.4% YoY (34,017 units) with September down 16.7% YoY
Agri Machinery EBIT margin fell 505 bps YoY to 7.77%
H1 operating cash flow was negative Rs.106.68 Cr (CFO/PAT −0.17x) on a Rs.566.22 Cr inventory build and Rs.290.38 Cr receivables build
Management's prior target of maintaining FY27 full-year margin is arithmetically out of reach; margins now expected to normalize only in FY28

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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.