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ESCORTS - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 20 Dec 25, 11:15 pm
Back to Fundamental ListFundamental Rating: 4.0
| Stock Code | ESCORTS | Market Cap | 40,544 Cr. | Current Price | 3,624 ₹ | High / Low | 4,180 ₹ |
| Stock P/E | 33.4 | Book Value | 1,064 ₹ | Dividend Yield | 0.75 % | ROCE | 13.7 % |
| ROE | 12.8 % | Face Value | 10.0 ₹ | DMA 50 | 3,666 ₹ | DMA 200 | 3,535 ₹ |
| Chg in FII Hold | 0.05 % | Chg in DII Hold | 0.37 % | PAT Qtr | 321 Cr. | PAT Prev Qtr | 315 Cr. |
| RSI | 45.8 | MACD | -3.86 | Volume | 79,839 | Avg Vol 1Wk | 50,349 |
| Low price | 2,776 ₹ | High price | 4,180 ₹ | PEG Ratio | 1.77 | Debt to equity | 0.01 |
| 52w Index | 60.4 % | Qtr Profit Var | 6.12 % | EPS | 209 ₹ | Industry PE | 34.2 |
📊 Financials Overview:
- Revenue & Profit Growth: PAT rose from 315 Cr. to 321 Cr. (↑ 6.12%), showing steady growth.
- Margins: ROCE at 13.7% and ROE at 12.8% indicate moderate profitability.
- Debt Ratios: Debt-to-equity at 0.01 reflects a virtually debt-free balance sheet.
- Cash Flows: Dividend yield at 0.75% provides modest shareholder returns.
💹 Valuation Indicators:
- P/E Ratio: 33.4 vs Industry PE of 34.2 → fairly valued relative to peers.
- P/B Ratio: Current Price / Book Value ≈ 3.4, reasonable compared to sector norms.
- PEG Ratio: 1.77 → valuation moderately stretched relative to growth.
- Intrinsic Value: Fair value estimated near 3,200–3,350 ₹; current price (3,624 ₹) slightly above comfort zone.
🏭 Business Model & Competitive Advantage:
- Escorts operates in tractors, construction equipment, and railway components.
- Strong domestic presence and diversified product portfolio provide resilience.
- Low debt ensures flexibility for expansion and R&D investments.
📈 Entry Zone & Long-Term Guidance:
- Entry Zone: Attractive accumulation range between 3,200–3,350 ₹.
- Long-Term Holding: Suitable for investors seeking steady growth; fundamentals strong but valuations slightly stretched.
Positive
- Debt-to-equity at 0.01 indicates strong financial health.
- Consistent PAT growth quarter-on-quarter.
- Institutional confidence with FII (+0.05%) and DII (+0.37%) holding increases.
Limitation
- ROCE and ROE are moderate compared to industry leaders.
- PEG ratio of 1.77 suggests valuation premium.
- Dividend yield at 0.75% is modest.
Company Negative News
- No major negative news reported; valuation premium remains the key concern.
Company Positive News
- Quarterly PAT growth of 6.12% shows operational stability.
- Institutional holdings increased, reflecting investor confidence.
Industry
- Industry PE at 34.2, close to Escorts’ 33.4, indicating fair valuation.
- Sector growth driven by rural demand, infrastructure expansion, and mechanization trends.
Conclusion
⚖️ Escorts demonstrates strong fundamentals with negligible debt and consistent profit growth. Valuations are aligned with industry averages, though slightly stretched. Long-term investors may consider accumulation near 3,200–3,350 ₹ for margin of safety, while current levels require cautious entry given RSI at 45.8 and weak MACD momentum.
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