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%.

BUSINESS ANALYSIS FOR TARGET ACHIEVEMENT

The management of Escorts Ltd made a statement that they would meet on 18th 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 LossSep 2010Sep 2011Sep 2012Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021
Sales 33244101404965024113343241455059626258107014
Expenses 32053817386061154039327138784506553951495888
Operating Profit120284190387731612685537236611126
OPM %0.040.070.050.060.020.050.060.110.120.110.16
Other Income180-5550871243136589988160
Interest70719711258513229201713
Depreciation484850866958637387107118
Profit before tax1811109227570822085097156251155
Tax %0.27-0.140.20.1-0.080.150.370.320.330.250.25
Net Profit132126742477671131347479472871
EPS in Rs12.511.976.9920.136.235.7610.7128.3139.0738.5364.63
Dividend Payout %0.120.130.190.090.190.210.140.070.060.060.12

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 SheetSep 2010Sep 2011Sep 2012Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Sep 2021
Share Capital 9292119119119123123123123123135135
Reserves159416921526174617111728186924302888333252275181
Borrowings40548655443848436826551281486155
Other Liabilities 1054123513571332123575094213691415151214561798
Total Liabilities314535053556363635502968319939734707501468787169
Fixed Assets 160816201595165415961539158115881647170217961817
CWIP2048673956583566801256563
Investments1081123733723736421254949179719382388
Other Assets 140917251522157215261307137117702489239030792901
Total Assets314535053556363635502968319939734707501468787169

SHARE HOLDING SYNOPSIS

Share holding patternDec 2018Mar 2019Jun 2019Sep 2019Dec 2019Mar 2020Jun 2020Sep 2020Dec 2020Mar 2021Jun 2021Sep 2021
Promoters40.0840.0840.2540.2540.2540.2540.2536.5936.5936.5936.5936.59
FIIs 21.6524.620.3821.7620.4419.2820.3721.5923.7925.9521.2821.53
DIIs 4.883.315.544.826.489.989.958.537.135.65.637.64
Public 33.3932.0131.3230.6630.3227.9926.9331.0630.3129.7134.432.19
Others 002.512.512.512.512.512.232.182.152.12.06

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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