Escorts earmarks Rs. 400 crore for foray into metro rail sector

Escorts' railways equipment division, a unit of the Escorts Group, is planning to invest almost Rs. 400 crore for possible acquisitions in India or Europe to help its entry into the lucrative metro rail sector.

Potential targets could be companies in areas such as air-conditioning, traction equipment and coupling systems which are all important components for metro rail.

Notably, the company is eyeing to increase by four-fold the revenue of its railway division in the coming three-four year period from the current Rs. 350 crore. Presently, the division accounts for almost 6 per cent of the company's total revenue. Company expects good traction in demand for its new products such as bogie-mounted brake systems for freight wagons and axle-mounted disc brakes for LHB (stainless steel) coaches.

In the last quarter of fiscal year 2018, the railway division registered a growth of 14.2 per cent yoy and current order book for this division is Rs. 350 crore which will be executed in the next 12-13 months.

Escorts' overall profit in Q4FY18 jumped around 89 per cent yoy. The company’s board of directors have recommended a dividend of Rs. 2 per equity share of face value Rs. 10 for FY18.