Atrump Games

Atrump Games
Atrump Games

Escorts Sells Auto Product Business - Boom for Shareholder

Escorts yesterday released press note that they are going to sell the Auto product business to Pune based company wherein they will transfer the assets basis with valuation post 45- 60 days. The loss making unit used to be the drag of Escorts EBITA and EBIT. It also impacted the equity price and kept it suppressed for the quite some time. I in my previous blog recommended reader to invest in Escorts and my analysis came true. The equity price shot up by more than 15% post news break. The sell out of the loss making unit will support Escorts earning moving forward.

The latest monsoon in North India will help Escorts Tractor and construction business along with that  it will improve overall margin.

In my point of view, the land assets of Escorts is huge and along with profitable unit will improve the overall market cap of the company. I wont be surprised if they start expanding their business in South India too.

Keep holding the stock for next 4 to 5 Quarter to get very good return from Escorts. If one donot own the equity then they should use market sellout as an opportunity to accumulate stocks in small quantity to average out the price

Disclaimer : Contact your financial advisor before investing
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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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