InvestorQ : I am holding shares of Escorts that I had bought at higher price levels. After the results, should I hold on to the stock for now?
Rutuja Nigam made post

I am holding shares of Escorts that I had bought at higher price levels. After the results, should I hold on to the stock for now?

Answer
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Arti Chavan answered.
1 year ago


The company reported a fall in revenues and net profits for the June quarter. Total income was down 5.7% at Rs.1458 crore while net profits were down by 27.6% at Rs.87.7 crore. The company took a hit on top line largely due to the slowdown in the tractor industry and the weak agri output and tepid monsoons have kept the demand for tractors on the lower side. That impacted the sales of Escorts in the June quarter. The company also faced cost pressures and that led to a sharp fall in the net profits too.

The company stock price has halved over the last one year and is currently available at nearly 11 times historic earnings. That is a very attractive level to enter the stock. If you have bought the stock at higher levels, you can look to gradually average and keep accumulating the stock at lower levels. The company still remains a sound bet on the Indian agri space but has just faced pressures due to the slowdown in agri and also in the automobile space.