Escorts Kubota Q3 Profit Jumps 12%, Announces ₹18 Special Dividend

Introduction to Q3 Performance

Escorts Kubota Limited has announced a robust financial performance for the third quarter ending December 31, 2025. The company reported an 11.8% year-on-year increase in its consolidated net profit, which stood at ₹358.3 crore. This growth was supported by a healthy rise in revenue and a significant improvement in operating margins, signaling strong operational efficiency. In a move that rewards shareholders, the company's board also declared a special dividend of ₹18 per equity share.

Detailed Financial Breakdown

The company's consolidated revenue from operations for the quarter grew by 11.3% year-on-year, reaching ₹3,280.5 crore compared to ₹2,948 crore in the same period last year. This top-line growth was accompanied by an even stronger performance in operational profitability. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a sharp increase of 30.7% YoY, rising to ₹434.8 crore from ₹332.6 crore a year earlier. This surge in EBITDA led to a significant expansion of the EBITDA margin, which improved by 200 basis points to 13.3% from 11.3% in the corresponding quarter of the previous year. The improved margin indicates better cost management and enhanced profitability from its core operations.

Shareholder Returns and Dividend Announcement

A key highlight of the Q3 results announcement was the declaration of a special dividend. The Board of Directors approved a special dividend of ₹18 per equity share of ₹10 each for the financial year 2025-26. The company has set Monday, February 16, 2026, as the record date to determine the eligibility of shareholders for this dividend payment. This move reflects the company's strong financial position and its commitment to sharing profits with its investors.

Strategic Expansion with Greenfield Project

Looking towards future growth, the board has given its consent for a major strategic investment. The company plans to acquire approximately 154 acres of land in the YEIDA Industrial area in Gautam Buddha Nagar, Uttar Pradesh, to establish a new greenfield project. This project is aimed at significantly enhancing the production capacity for tractors, construction equipment, and other products. The initial phase is planned to add a capacity of 60,000 tractor units and 15,000 construction equipment units per annum within seven years. The estimated initial investment for land acquisition and development is up to ₹593 crore, with a total projected outlay of ₹2,268 crore for the entire project. This expansion will be funded through internal accruals and proceeds from a previous preferential issue, underscoring the company's confidence in long-term demand.

Operational Context and One-Off Items

While the overall performance was strong, the company's financials for the quarter included an exceptional expense of ₹52.46 crore. This charge is related to employee costs arising from the implementation of the new labor code. It is important for investors to note this as a one-off item that impacted the final net profit figure for the quarter. The company's results are reported for continuing operations, as figures from previous periods have been adjusted to exclude the Railway Equipment Division (RED), which was sold in the first quarter of the financial year.

Corporate Governance and Board Changes

In another significant development, the board approved the appointment of Mr. Hitoshi Sasaki and Mr. Satoshi Suzuki as Additional Directors. Both are nominees of Kubota Corporation, Japan, a key stakeholder in the company. Their appointment strengthens the board and reinforces the strategic alliance between Escorts and Kubota, bringing global expertise to the company's leadership.

Market Reaction and Outlook

The market responded positively to the strong quarterly results and strategic announcements. Shares of Escorts Kubota Limited closed higher on the NSE at ₹3,823.60, marking an increase of ₹46 or 1.22% for the day. The robust financial performance, coupled with the ambitious greenfield expansion plan, positions the company well for sustained growth. Investors will be closely watching the execution of the new project and its impact on future revenue and profitability. The company's focus on improving margins and expanding capacity signals a positive outlook for its operations in both domestic and international markets.