Escorts Kubota posts rise in adjusted quarterly profit on stronger demand

India’s Escorts Kubota reported a rise in adjusted first-quarter profit on Monday, driven by higher tractor sales.

The company, majority-owned by Japanese tractor maker Kubota , said net profit from continuing operations rose to 3.87 billion rupees ($40.50 million) in the quarter ended June 30 from 3.73 billion rupees a year ago.

Profit from continuing operations before exceptional items rose 26%, the company said.

In the year-ago quarter, the company had reported a one-time gain of 759.9 million rupees, related to the sale of certain assets.

Revenue from operations climbed 28% to 31.79 billion rupees, supported by strong volume growth across segments.

Expenses increased 30.3% year-on-year, primarily driven by higher raw material costs.

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Operating profit margins fell to 11.2% from 13.1% in the year-ago quarter.

Revenue from agricultural machinery products, the company’s main revenue-generating segment, rose nearly 26.8%, driven by higher tractor volumes.

Total tractor sales grew 20.5% in the quarter, with domestic volumes up 22.9%.

Analysts had expected the tractor maker to benefit from resilient tractor demand and healthy retail sales, but added elevated input costs and monsoon-related uncertainty could weigh on margins.

Shares closed 0.94% higher after the results.