Escorts shares soared as much as 19.99 per cent on Thursday after the company announced the divestment of its OEM and export business of Auto Product division to Badve Engineering Ltd in an all cash deal as a part of the planned strategic reorientation of the business to focus on core verticals in the agri-machinery, construction equipment and railway equipment. Escorts auto products business caters to OEMs and replacement market globally for all vehicle including scooters, commercial vehicles, passenger cars, motorcycles and multi-utility vehicles.
Shares of the company closed 17.39 per cent up at Rs 305.10. The scrip opened the day at Rs 261.80 and touched a high and low of Rs 311.85 and Rs 255.20, respectively, in trade so far. Benchmark BSE Sensex settled 84.72 points, or 0.31 per cent, up at 27,859.
Dipankar Ghosh, chief executive officer, Escorts Auto Products & Escorts Railways Products in a release said, “We believe the transfer of OEM and export business to Badve will help us to focus on our core areas.”
For the quarter ended June 30, 2016, the company reported a net profit of Rs 46.96 crore, up 33.47 per cent, against Rs 35.18 crore in the same quarter last year. Net sales of the company jumped by 9.45 per cent year-on-year to Rs 1047.35 crore in April-June 2016 quarter as compared to Rs 956.93 crore in the same quarter last year. Operating profit of the company grew by 41.54 per cent year-on-year to Rs 98.20 crore for the quarter under review.