HSBC has maintained buy rating on the stock, though it slashed price target to Rs 770 from Rs 980 per share amid lower sales growth
Escorts shares gained 2.7 percent intraday on September 11 after global brokerage house HSBC retained its bullish stance on the stock.
According to the firm, the stock is cheap at 9x FY21 EPS estimates.
The stock gained nearly 8 percent in last 15 days. It was quoting at Rs 510.80, up Rs 6.70, or 1.33 percent on the BSE at 1018 hours IST.
HSBC has maintained buy rating on the stock, though it slashed price target to Rs 770 from Rs 980 per share amid lower sales growth.
Escorts’ agri machinery segment sold 4,035 tractors in August 2019, lower by 16.1 percent compared to same month last year as domestic tractor sales fell 19.5 percent YoY, but exports increased 97.1 percent.
In first five months of financial year 2019-20, tractor sales declined 14.2 percent to 29,946 units YoY as domestic sales volume slipped 16.7 percent.
“Tractor demand may bottom out in second half of FY20. UP/Maharashtra/Gujarat states are likely to see pick-up in growth post monsoons while MP/Rajasthan should continue to do well,” HSBC said, adding Escorts has reduced inventory in recent months.