Escorts partners with Kubota to boost market share

Escorts has entered into 40:60 joint venture partnership with Kubota Corporation to manufacture high-end technology tractors for domestic and export geographies with an initial investment of Rs. 300 crore.

Under this JV, both the companies will develop new products with an initial capacity of 50,000 tractors by FY20-21 and the products will be sold in the domestic market, Escorts informed the bourses on Monday. Also, as a part of this JV, Kubota will export tractors to Escorts via Kubota global distribution network. Further, Escorts and Kubota will develop their distribution channels independently.

Kubota Corporation is a tractor and heavy equipment manufacturer based in Osaka, Japan and generates 67 per cent of its revenue outside Japan markets.

In the recent quarter Q2FY19, Escorts' volume of tractors grew by 3.4 per cent YoY to 21,039 units, whereas revenue from the segment grew by 7 per cent YoY.

On Monday, the stock opened at Rs. 615 per share and made an intraday low of Rs. 602.50 on the BSE in a struggling market. At 11:26 hours, the stock was trading nearly at Rs. 613.30 on the BSE.