Escorts Limited A Mid Cap Stock : 197.72% Return Potential

Escorts Limited
Rate this post

Escorts Limited was originally established as Escorts Agents Limited in 1944 by two brothers Har Prasad Nanda and Yudi Nanda.  He started a household owned enterprise in Lahore named Nanda Bus Company.

Escorts Limited was set up in 1960 when the organization set up its manufacturing base in Faridabad and began manufacturing agricultural equipment with Westinghouse, X-ray machines and heating factors with Elpro. Escorts Kubota Limited, incorporated in the year 1944, is engaged in Auto sector.  Which is a mid cap company with a market cap of Rs 28,646.12 crore.

Achievements of Escorts Limited

Year 1954: Take Massey Ferguson Tractor Franchise for North India.

Year 1961: Commenced manufacturing of its own brand of tractors in collaboration with URSUS of Poland. Ambassador is moving at a high pace to explore more opportunities by promoting two wheelers along with the production of motorcycles.

Year 1962: Started manufacturing of shock absorbers for passenger coaches with Bogey and Germany countries.

Year 1966: Leading manufacture of automotive shock absorbers in India.

Year 1969: Entered into a joint venture with global giant Ford Motor Company to produce Ford tractor. Establishment of Training and Development Center in Bengaluru.

Year 1974: Crossed the national frontier and started exporting tractors for the first time.

Year 1977: The company has entered the world of self-developed technology and set up independent R&D center.

Year 1991: Shares of the company listed on NSE and BSE.

Year 2006: Set up new manufacturing facility at Rudrapur, Uttarakhand.

Year 2010: Becomes the first Indian company to indigenously designed Backhoe Loader.

Year 2011 : Launches India’s first inverter tractor FT45.

Year 2012: Develops most fuel efficient tractors Powertrac 425. Indigenously developed Bogie Mounted Brake Systems for Indian Railways.

Year 2015 :

Launches Anti-Lift Tractor – India’s first lift- resistant tractors for commercial haulage operations. Enters into Joint Venture with Amul Group for manufacturing of specialty tractors, Steeltrac. Partners with Cognizant Technology Solutions to digitally transform businesses and deliver superior customer experience.

6 reasons why we should invest in Escorts Limited

Expenses of Escorts Limited

 The company has spent less than 1% of its operating revenue on interest expense and 7.21% on employee cost in the year ended March 31, 2023.

Returns of Escorts Limited

Escorts Limited has given  57.17% return in last 1 year, 130.72% in last 3 years and 195.77 % in last 5 years. The current stock price of Escorts Limited is ₹2,586.85. If you hold 500 stocks of the company for 5 years, you can get a return of 195.77%, that is, if you have invested a total of 2,586.85*500=₹12,93,425.  So after 5 years you will have an income of 12,93,425*195.77% = ₹ 25,32,138 in which your profit will be ₹12,38,713.

In this, you can understand that the way the inflation rate is increasing by 6%, which is not affecting your  returns, at least you need 12% returns to stay away from the effect of inflation and this in the stock  you are getting returns of more than 12%.

Dividend records

Escorts Limited will pay 70% dividend to its shareholders in 2023, 70% in 2022, 25% and 50 %in 2021  and 25% in 2020.  You must have seen that the percentage of dividend is increasing every year and also the company has provided dividend to its shareholders time to time.

Financial performance of Escorts Limited

Escorts Limited  has generated a total income of ₹ 2449.52 crores in the first quarter of the financial year 2023-24 and a growth of 6.96 % has been seen In total income IT. There has been a growth of 52.38% in EBIT and 33.91% in PAT.  The net profit of the company has been 11.83%, which means the company has earned a profit of 290 crores.  Also, the current Basic EPS of the company is ₹26.76as compared to ₹19.99 in the previous quarter.

Also Read : Lithium Stocks in News : Investment in Lithium stocks Battery Manufacturers In India

PE Ratio

The full form of PE Ratio is price to earning ratio. Through PE ratio, we can know whether the stock we want to buy is cheap or expensive. The ideal value of PE ratio should be up to ₹ 20, it is neither too cheap nor too expensive. . But it is not necessary that the PE RATIO of a company’s stock is low, only then we should buy the stock because the stocks of growing companies trade on high PE only.

There is a formula to get PE Ratio

PE Ratio= The Current Price of Stock / EPS

Here the full form of EPS is Share on Earnings.  EPS means that how much profit the company is generating from its own shares.  The current EPS of Escorts Limited is around ₹ 26.76  And the PE ratio of Escorts Limited is around ₹36.44.

Bonus Ratio

Year 1968: 1 share for every 5 shares held.

Year 1974: 1 share for every 2 shares held.

Year 1977: 3 shares for every 5 shares held.

Year 1979: 3 shares for every 5 shares held.

Year 1987: 3 shares for every 5 shares held.

FAQs (Frequently Asked Questions)

What is Escorts Limited and its history?

Escorts Limited is an Indian company established in 1944, initially as Escorts Agents Limited, which later became a prominent manufacturer of agricultural equipment, tractors, and other automotive components. It was founded by Har Prasad Nanda and Yudi Nanda and has a history of collaborations with international giants like Massey Ferguson, URSUS, and Ford.

What are the key achievements of Escorts Limited?

Escorts Limited has achieved several milestones, including obtaining the Massey Ferguson Tractor Franchise, joint ventures with Ford Motor Company, pioneering self-developed technology and setting up an independent R&D center, becoming the first Indian company to design Backhoe Loaders, launching innovative products like the inverter tractor FT45 and the Anti-Lift Tractor, and establishing partnerships for digital transformation.

Why should someone invest in Escorts Limited?

There are several reasons to consider investing in Escorts Limited, including its strong financial performance, consistent dividend payments, impressive returns on investment (57.17% in the last year, 130.72% in the last 3 years, and 195.77% in the last 5 years), and a history of innovative product development. Additionally, the company’s PE ratio suggests a relatively reasonable valuation.

Can you explain the financial performance of Escorts Limited?

In the first quarter of the financial year 2023-24, Escorts Limited generated a total income of ₹2449.52 crores, indicating a growth of 6.96%. The company’s EBIT grew by 52.38%, and its PAT (Profit After Tax) increased by 33.91%. The net profit for the quarter was ₹290 crores, and the Basic EPS (Earnings Per Share) rose to ₹26.76 from ₹19.99 in the previous quarter.

What is the PE ratio of Escorts Limited and how does it affect investment decisions?

The PE ratio, or Price to Earnings ratio, is a measure of a stock’s valuation. Escorts Limited’s PE ratio is approximately ₹36.44, which indicates how much investors are willing to pay for each rupee of earnings. While an ideal PE ratio is generally considered to be around ₹20, it’s important to note that growing companies often trade at higher PE ratios. The PE ratio can help investors gauge whether a stock is cheap or expensive.

How has Escorts Limited’s stock performed over the years?

Escorts Limited’s stock has shown remarkable performance, with returns of 57.17% in the last year, 130.72% in the last 3 years, and 195.77% in the last 5 years. Holding 500 shares over 5 years could potentially yield substantial returns, as illustrated by the example provided in the post.

1 thought on “Escorts Limited A Mid Cap Stock : 197.72% Return Potential”

  1. Pingback: MSCI index changes likely to inflow $1.4b into stocks : How to invest?

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
5 large-cap stock ideas Escorts Limited A Mid Cap Stock : 197.72% Return Potential Hybrid Mutual Fund : which give you high returns at moderate risk 3 stocks of Nifty Smallcap 50: Giving high returns in the short term 5 Key Benefits of Investing In Cipla Stock Highlights for 5 large cap companies’ performance in Q1 FY2023-24 What is happening with Tata Power? is now the Time to Buy? FII stake is increase in 10 mid cap stocks : Chance to invest