If you look at the latest results the profits are up marginally around 8% to Rs.121 crore. However, if you look at the full year profits then it up nearly 41% at Rs.484 crore. So growth has surely been coming for Escorts in the core tractor market. For the full year, revenues were up by 23% at Rs.6196 crore which shows that the company has benefited from higher spending in agriculture. That is evident from the 7% growth in its tractor volumes in the latest quarter. The only issue could be that the Operating Margins have contracted by 50 bps to 9.2%.

Let us come back to your question of whether you should buy the stock at current prices. Escorts is a very good play on rural growth, rural incomes and higher allocations to agriculture. So scope for growth is very huge. If you look at the P/E ratio, it is now quoting at around 15-16 times past earnings. In terms of future earnings, the P/E ratio should be more attractive. Compared to other tractor / auto stocks, Escorts is relatively cheaper and also it has been less vulnerable to cycles compare to the other auto companies. You can surely buy Escorts from an investment perspective.