Escorts Kubota to Invest Rs.4,500 crores For Expansion in The Next 3-4 Years

Escorts Kuborta is an Indian MNC that operates in the sectors of agricultural machinery, construction machinery, material handling, and railway equipment. The Company is set to invest Rs.4,500 crores For Expansion in the next 3-4 Years in a new manufacturing plant in Ghiloth, Rajasthan.

About The Plant 

Escorts Kubota Ltd has planned to invest up to Rs.4500 crores for this new manufacturing plant, The greenfield plant aims to double tractor production capacity to 3.4  lakh units annually while establishing a new engine and construction equipment line in phases. Estimated to cost between Rs.4,000 crore to Rs.4,500 crore over the next three to four years, this project is set to significantly expand the operations and enhance its manufacturing capabilities. The company is currently in talks with the Government of Rajasthan for a site in Ghiloth, which is the place for setting up the above-mentioned greenfield plant.

CFO Bharat Madan on this plant

Bharat Madan, CFO of Escorts Kubota has said,” The greenfield plant will involve doubling tractor production capacity, setting up a new engine line and a construction equipment line in phases. Overall, the greenfield project may cost Rs.4,000 crore to Rs.4,500 crore over the next three to four years, He further said,” This year we expect to procure land which may cost Rs.400 crore to Rs.450 crore and then start construction by the end of this fiscal.” At present, the company has a total annual tractor production capacity of 1.7 lakh units. The main plant of the company is located in Faridabad and the engine production capacity for it is 1.5 Lakh units annually.

Madan also mentioned that the Capex for FY25 will be around Rs.300 crore, regarding the tractor sales outlook for FY25 he said that the industry is anticipating a “mid-single-digit growth with demand likely to gain upward movement only in the second half of the fiscal year.

Conclusion: The company is set to construct its largest Kubota facility in Ghiloth, Which will double its production capacity to around 3.4 lakh units annually. The greenfield plant will manufacture tractors, engines and implements for the Indian market and export markets also. The stock price for Escorts Kubota Ltd. currently trades at Rs.3,594.45 a piece up by 1.05% from its previous day’s closing price. The stock has given returns of more than 70% over the past year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.