ESCORTS SHARE PRICE: TARGET ACHIEVED!!!

Hello and welcome back to one more interesting article wherein we’ll discuss the escorts share price which was analyzed earlier and has achieved the target predicted by us in a span of 131 days.

Let’s check the parameters which helped the Escorts share price to achieve the desired target of approximately 50%.

Table of Contents

BUSINESS ANALYSIS FOR TARGET ACHIEVEMENT

The management of Escorts Ltd made a statement that they would meet on 18^th November 2021 to consider and evaluate the proposals for raising funds through bonds/debentures/ or any other securities.

The company received interest from Japan based Kubota Corporation which acquired a stake in Escorts.

Through this open offer the company has raised ₹ 1872.74 Cr by way of preferential issue of 96.64 lakh equity shares to Kubota at ₹ 2,000 per share.

In October 2021, the sales of Domestic tractors were 12,749 as against 13,180 tractors in October 2020.

In October 2021, the sales of Export tractors were 764 against 484 tractors sold in October 2020. This led to a growth of around 58.1%.

In October 2021, the sales of Escorts Construction Equipment Segment (ECE) were 462 machines which was 399 in October 2020. This led to a growth of 15.8 percent year on year.

FINANCIAL ANALYSIS FOR TARGET ACHIEVEMENT

Figures in Rs. Crores

Profit and Loss	Sep 2010	Sep 2011	Sep 2012	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021
Sales	3324	4101	4049	6502	4113	3432	4145	5059	6262	5810	7014
Expenses	3205	3817	3860	6115	4039	3271	3878	4506	5539	5149	5888
Operating Profit	120	284	190	387	73	161	268	553	723	661	1126
OPM %	0.04	0.07	0.05	0.06	0.02	0.05	0.06	0.11	0.12	0.11	0.16
Other Income	180	-55	50	87	124	31	36	58	99	88	160
Interest	70	71	97	112	58	51	32	29	20	17	13
Depreciation	48	48	50	86	69	58	63	73	87	107	118
Profit before tax	181	110	92	275	70	82	208	509	715	625	1155
Tax %	0.27	-0.14	0.2	0.1	-0.08	0.15	0.37	0.32	0.33	0.25	0.25
Net Profit	132	126	74	247	76	71	131	347	479	472	871
EPS in Rs	12.5	11.97	6.99	20.13	6.23	5.76	10.71	28.31	39.07	38.53	64.63
Dividend Payout %	0.12	0.13	0.19	0.09	0.19	0.21	0.14	0.07	0.06	0.06	0.12

The main reason for the increase in Escorts share price was the 18% sales growth in March 2021 which ultimately helped in achieving an operating profit of ₹ 1,126 Cr.

All the parameters such as Other income, Net profit, EPS, etc. are superb which is a great sign for future growth of the company.

Reserves have increased steadily, and investors are very much interested in this company seeing its great prospect.

Figures in Rs. Crores

Balance Sheet	Sep 2010	Sep 2011	Sep 2012	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Sep 2021
Share Capital	92	92	119	119	119	123	123	123	123	123	135	135
Reserves	1594	1692	1526	1746	1711	1728	1869	2430	2888	3332	5227	5181
Borrowings	405	486	554	438	484	368	265	51	281	48	61	55
Other Liabilities	1054	1235	1357	1332	1235	750	942	1369	1415	1512	1456	1798
Total Liabilities	3145	3505	3556	3636	3550	2968	3199	3973	4707	5014	6878	7169
Fixed Assets	1608	1620	1595	1654	1596	1539	1581	1588	1647	1702	1796	1817
CWIP	20	48	67	39	56	58	35	66	80	125	65	63
Investments	108	112	373	372	373	64	212	549	491	797	1938	2388
Other Assets	1409	1725	1522	1572	1526	1307	1371	1770	2489	2390	3079	2901
Total Assets	3145	3505	3556	3636	3550	2968	3199	3973	4707	5014	6878	7169

SHARE HOLDING SYNOPSIS

Share holding pattern	Dec 2018	Mar 2019	Jun 2019	Sep 2019	Dec 2019	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021
Promoters	40.08	40.08	40.25	40.25	40.25	40.25	40.25	36.59	36.59	36.59	36.59	36.59
FIIs	21.65	24.6	20.38	21.76	20.44	19.28	20.37	21.59	23.79	25.95	21.28	21.53
DIIs	4.88	3.31	5.54	4.82	6.48	9.98	9.95	8.53	7.13	5.6	5.63	7.64
Public	33.39	32.01	31.32	30.66	30.32	27.99	26.93	31.06	30.31	29.71	34.4	32.19
Others	0	0	2.51	2.51	2.51	2.51	2.51	2.23	2.18	2.15	2.1	2.06

Promoters have maintained their position in this stock.

But there is a great interest shown by FIIs which is showcased by their action of increasing the stake in this stock by around 0.25%.

Now, let’s deep dive into the technicalities of the share price of Voltas.

CHART PATTERN ANALYSIS

During the prior analysis we had highlighted the formation of a rounding bottom pattern.

Click here for previous analysis on Escorts share price.

The stock did give a breakout and achieved its target of ₹ 1,740.

The stock rallied till ₹ 1,802 and showed an upside of approximately 50%.

Rounding bottom pattern is a tested and verified pattern which never fails to achieve its target.

MOVING AVERAGE

For Escorts share price analysis, we had taken 9 days and 21 days moving averages.

As per the historical crossovers we had predicted that there would be a rally in the stock once the two moving averages again cross each other.

The same happened and the stock achieved its desired target.

The 9 days moving average is indicated in red while the 21 days moving average is blue.

SUPER TREND

Super trend indicator showed a buying signal which made the conviction stronger on this stock.

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