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Escorts FY09 net profit at Rs. 89.74 Crore

Profit Before Tax at Rs 111.06 crore
New Delhi, December 29, 2009

Annual sales at Rs 2157.78 crore, up 8 per cent
EBIDTA for FY09 increases by 35% to Rs 205.92 crore
Fourth Quarter sales up 14 per cent
Fourth Quarter Profit at Rs 60.03 crore as against loss corresponding Quarter
Announces Dividend of 10 per cent

Escorts Limited today reported a Net Profit of Rs.89.74 crore for the financial year 2008-09 ending September 30, 2009, an eight fold increase in profit from the Rs 11.87 crore registered for the last financial year of 2007-08. Net Sales grew 8% to Rs 2157.78 crore as against Rs 1992.93 crore registered in last fiscal. Escorts Limited follows an October-September fiscal year.

Escorts Limited increased its Profit Before Tax (PBT) by 325% Year on Year (YoY) to Rs 111.06 crore from Rs 26.14 crore. EBIDTA for the financial year grew by 35% to Rs.205.92 crore from Rs 152.44 crore registered in the previous fiscal. Material costs as a percent of sales has been brought down by 6% through a series of cost reduction measures.

In the fourth Quarter of 2008-09 (July-September 2009), Escorts Limited recorded sales of Rs 598.86 crore as against Rs 525.69 crore in the corresponding quarter, reflecting an increase of 14 per cent. Profit for the Quarter stood at Rs 60.03 crore as against a net loss of Rs 1.19 crore in the corresponding quarter.

The Board of Directors have recommended a dividend of Rs 1.00 per equity share of Rs 10/- each, to its shareholders for the fiscal year 2008-2009 which will have an outgo of 9.07 crores plus dividend distribution tax.

Speaking on the results, Chairman and Managing Director Mr Rajan Nanda said, "Combining financial prudence, market aggression and top-drawer talent, Escorts has re-emerged as a strong business. In the current financial year, Escorts has achieved significant increase across all performance parameters. The Agri Machinery Division further improved its profitability with company wide initiatives for quality enhancements. The division increased its market share and launched new global quality higher horse power tractors that are adding to the volume of tractor sales. The division has now embarked on an aggressive strategy to address southern and western markets in the current fiscal year. Several new products were launched that have been well received in the markets and are adding to the volume of tractor sales. Escorts Railways Division has achieved significant growth of 39% and has got a good order book for the current fiscal. The division will be introducing 4 new railway products for coaches and wagons built for the Indian Railways. The railway business offers good opportunities and potential for growth and Escorts is giving high priority to its railway division."

Mr Nikhil Nanda, Joint Managing Director said, "We continue to focus on creating a top-quality efficient business that builds and delivers higher value for all stakeholders. In 2008-09, Escorts achieved a higher EBITDA margin at 9.4% against 7.4% of previous financial year. Cost rationalization and resource optimization initiatives have been further strengthened. All key ratios have shown significant improvement. Debt-Equity ratio is lower at 0.12 in the current year as compared to 0.38 last year. Substantial term debts have been reduced and liquidity has been comfortable through out the year. This is evident from the reduced interest payout and lower level of working capital utilization. The focus on efficiencies has led our EBITDA to grow by over 35% annually consistently over the last two financial years. Going forward our focus on agriculture and infrastructure will be reinforced and the Company is developing a blue print for further growth and profitability which will unfold as we go along. A combination of manpower and dealer productivity, products mapped to market and application and aggressive market activation is the cornerstone of Agri Machinery's growth strategy."

The audited accounts of 2008-09 ending September 2009 has been approved by the Board of Escorts Limited.

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