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Multibagger Escorts Kubota shares rebound 89% from 52-week low; time to buy, sell or hold?

Multibagger Escorts Kubota shares rebound 89% from 52-week low; time to buy, sell or hold?

Escorts Kubota shares zoomed 125% in two year and rallied 171.92% in three years. In the last one year, the multibagger stock has gained 63.75% and climbed 47% in three months.

Aseem Thapliyal
Aseem Thapliyal
  • Updated Oct 13, 2023 10:22 AM IST
Multibagger Escorts Kubota shares rebound 89% from 52-week low; time to buy, sell or hold? Escorts Kubota shares were trading at Rs 3415 in early deals today against the previous close of Rs 3414.35. Market cap of the firm stood at Rs 37,735 crore on BSE.

Shares of Escorts Kubota Ltd, which have risen nearly 50% in three months, are trading near their record high. The stock of the tractor maker has delivered positive returns across timelines. Escorts shares zoomed 125% in two year and rallied 171.92% in three years. In the last one year, the multibagger stock has gained 63.75% and climbed 47% in three months.  

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The stellar stock performance can be attributed to financials of the firm. It reported highest revenue of Rs 2355 crore, a rise of 16% (year on year basis) in the June 2023 quarter. Revenue for the March quarter stood at Rs 2214 crore and came in at Rs 2032 crore in the June 2022 quarter.  

Escorts Kubota reported a net profit of Rs 282 crore in Q1 of this fiscal, up 91% from Rs 147.5 crore in Q1 of the previous fiscal. The company had a very low debt of Rs 57.3 crore as of June 30, 2023 with debt to equity ratio at 0.7%. A debt to equity ratio of 1 to 1.5 is considered ideal for a company. On the other hand, it held Rs 2,020 crore in net cash as of June 2023.  

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The stock was trading at Rs 3415 in early deals today against the previous close of Rs 3414.35.  Market cap of the firm stood at Rs 37,735 crore on BSE.   

In terms of technicals, the relative strength index (RSI) of the Escorts Kubota stock stands at 67.7, signaling it's trading neither in the overbought not in the oversold zone. Escorts Kubota shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day, 150 day and 200 day moving averages.   

The share opened lower at Rs 3403.95. Total 3914 shares of the firm changed hands amounting to a turnover of Rs 1.33 crore on BSE. The share hit a record high of Rs 3435.20 on October 11 , 2023 and a 52-week low of Rs 1809.95 on March 27, 2023. 

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Mileen Vasudeo, Senior Technical Research Analyst at Arihant Capital Markets termed Escorts Kubota as one of his top picks. One can keep a stop loss of Rs 3,300 and target prices of around Rs 3,600-3,700 levels could be expected in a couple of weeks, Vasudeo told BT TV. 

DAM Capital has selected Escorts Kubota among its top picks, which have the potential to double in three years.  

The brokerage termed synergy benefit from Kubota in terms of operations, markets, cost management, product development, technological support and expanding global presence as one of the key triggers for earnings upgrade.  

"Respective stronger markets of Escorts and Kubota are complementary to each other, which can bring synergy on market shares to the tune of 150-200bps over the next 4-5 years. Moreover, huge export potential through Kubota's global network over the next decade coupled with increasing localisation would write a new story for the company going forward," said the brokerage.  

Brokerage Sharekhan has a positive outlook on the company's business. "The management continues to maintain its low to mid-single-digit growth for the tractor industry in FY2024 due to a high base effect. It aims to sustain its high level of margins in the coming quarters on account of price hikes, better product mix, and soft commodity cost trend," said the brokerage. 

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Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.       

Also read: Sell SBI shares, says UBS as it slashes stock price target to Rs 530

 

Also read: Infosys slips below HUL in m-cap race; stock tanks 4% after FY24 guidance

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Oct 13, 2023 10:22 AM IST
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