🚜 Escorts Kubota Ltd Q2FY26 – “Tractors, Cranes & Corporate Gymnastics: When a 70-Year-Old Farmer Hits the Gym with a Japanese Coach”
1. At a Glance
Escorts Kubota Ltd, the tractor-to-train-part veteran of India’s engineering scene, just dropped its Q2FY26 results—and boy, they’re juicy. Revenue for the quarter clocked in at ₹2,777.4 crore, while PAT parked itself neatly at ₹321.2 crore. That’s a 22.6% jump in quarterly sales year-on-year, proving Indian farmers are still more loyal to tractors than taxpayers are to deadlines.
The ₹42,766 crore market-cap behemoth currently trades at ₹3,822 per share (as of Nov 4, 2025). The P/E? A nose-bleeding 35.9x—because apparently, investors believe tractors now run on hopes and Kubota-branded dreams. With a return on equity of 12.8%, ROCE of 13.6%, and a debt-to-equity ratio of just 0.01, the balance sheet is cleaner than your favorite politician’s election promises (at least on paper).
But what really caught everyone’s eye this quarter was the ₹1,004 crore windfall from selling its Railway Equipment Division (RED) to Sona Comstar. Essentially, the company swapped trains for gains, monetized old iron, and added some much-needed sheen to the P&L.
Imagine if a Jat farmer met a Japanese engineer and they both agreed to “build tractors with discipline.” That’s Escorts Kubota for you—a 70-year-old Indian engineering stalwart gone global (and Zen) thanks to Kubota Corporation’s majority stake.
The company started as an Indian tractor pioneer under the legendary Nanda family. Then in 2022, the Japanese walked in with briefcases full of yen and a Mid-Term Business Plan that said, “Namaste, we’re going to make this global.” Now Kubota owns 53.5%, and Nikhil Nanda—the grandson of founder Har Prasad Nanda—plays the charming face of Indo-Japanese capitalism.
The tractor division contributes 70% of revenues, followed by Construction Equipment (19%) and the now-sold Railway Division (11%). In a world where electric scooters grab headlines, Escorts still makes money from good old combustion engines, steel, and sweat. And yet, their innovation arm—the Rajan Nanda Innovation Lab—is exploring EVs and “digital tractors.” (No, it doesn’t tweet, but give it time.)
This quarter, Escorts Kubota balanced growth and governance:
Sold the Railway Equipment Division (₹1,601.7 crore deal sealed in June 2025).
Revamped its board (hello, Akira Kato; goodbye, Dai Watanabe).
Announced a ₹2,000 crore R&D and capacity investment plan for Haryana by 2031.
A 13.6% ROCE might not sound flashy, but when your core business runs on diesel, mud, and monsoons, that’s practically Formula 1 territory.
3. Business Model – WTF Do They Even Do?
Escorts Kubota isn’t just about tractors; it’s about making everything that moves slowly but profitably.
Agri Machinery (70%) – The bread, butter, and bumper harvest. They manufacture tractors (Farmtrac, Powertrac, and Kubota brands), engines, implements, and spare parts. The company has five plants in Faridabad (capacity: 1,20,000 units), one in Poland (2,500 units), and a JV plant in India (50,000 units). FY24 capacity utilization was a sweaty 80%. Market share? 11.6% domestically, 5.1% in exports.
Construction Equipment (19%) – They make cranes, compactors, and backhoe loaders. The Ballabhgarh plant has a 10,000-unit capacity, utilized at 70% in FY24. With a 39% market share in cranes, Escorts Kubota is basically the Salman Khan of the construction industry—dominant, loud, and everywhere.
Railway Equipment Division (sold) – This once 11% revenue division made couplers, brake systems, and suspension units for metro and rail coaches. The company exited this segment in FY25 by selling it to Sona Comstar for a hefty gain. Exit trains, enter cash.
The new mantra? “Focus on tractors, expand capacity to 3 lakh units per annum by FY2028, and let Kubota handle the global R&D.” If things go as per their “Mid Term Business Plan,” revenues are set to grow 2.5x by FY2028. The Japanese don’t joke when they say “kaizen.”
4. Financials Overview
Source table
Metric
Latest Qtr (Q2FY26)
YoY Qtr (Q2FY25)
Prev Qtr (Q1FY26)
YoY %
QoQ %
Revenue
₹2,777.4 Cr
₹2,268 Cr
₹2,500 Cr
+22.6%
+11.1%
EBITDA
₹360 Cr
₹322 Cr
₹321 Cr
+11.8%
+12.1%
PAT
₹321.2 Cr
₹303 Cr
₹318 Cr
+6.0%
+1.0%
EPS (₹)
₹28.4
₹26.8
₹28.4
+6.0%
Flat
Commentary: Revenue is growing faster than the fields they till, but profit growth is crawling like a diesel engine uphill. Margins (OPM 13%) are stable, and other income has gone full Bollywood blockbuster—₹1,714 crore in FY25 vs ₹525 crore in FY24. When “Other Income” contributes this much, you know the real hero might be finance, not manufacturing.
