Escorts Limited (NSE: ESCORTS) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Prateek Singhal — Head of Investor Relations and Environmental, Social and Governance
Neeraj Mehra — Chief Officer in Tractor Business Division
Bharat Madan — Director and CFO
Sanjeev Bajaj — Chief Officer in Construction Equipment Business Division
Analysts:
Mumuksh Mandlesha — Analyst
Gunjan Prithyani — Analyst
Ajox Frederick — Analyst
Vijay Bhasin — Analyst
Mitul Shah — Analyst
Jinesh Gandhi — Analyst
Vikram Damani — Analyst
Ayush Anand — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Q3FY26 earnings conference call of Escorts Kubota Limited hosted by Anand Ratty Share and Stock Brokers Limited. As a reminder all participants line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mumuksh Manlesha from Anandrati Share and Stock Brokers Limited. Thank you. And over to you sir.
Mumuksh Mandlesha — Analyst
Yeah. Good evening. On behalf of Ananati Shares and stock brokers I welcome you all for The Escorts Kubota Q3 and 9 month FY26 earnings conference call. I take this opportunity to welcome the management team from Escort Scuboter Limited. Today we have with us Mr. Bharat Madan, Full Time Director and Chief Financial Officer. Mr. Neeraj Mehra Chief Officer Tractor Business Division. Mr. Sanjeev Bajaj, Chief Officer Construction Equipment Business Division and Mr. Pratik Singhal, Investor Relation and ESG. Before we start I would like to add some of the statements made by the company in today’s call will be forward looking nature and are subject to risk as outlined in the annual report and investor relations releases of the company. Now I hand over over to the management for the opening remarks. Thank you.
Prateek Singhal — Head of Investor Relations and Environmental, Social and Governance
Thank you Mumuksh. Good evening everyone and thank you all for joining us today. We hope you had an opportunity to see the financial statement and earning presentation uploaded to the stock exchanges. Let us begin with a few highlights of the company’s standalone financial performance for the quarter ended December 2025. Operating revenue from continuing operation is 3261.4 crore up by 11.1% yoyo. EBITDA at 438.7 crore up by 30.9% yoy. Highest ever quarterly EBITDA. Now EBITDA margins at 13.5% up 203 basis point yoy. PBT from continuing operation before exceptional item at 522.7 crores up by 37.5% yoy.
Net profit from continuing operation came at 362.4 crores up by 24.7% yoyo. Please note that this quarter there was an one time impact of new labor code of Rs. 52.5 crore. Adjusted for this net profit came at 401.6 crore up by 38.3% Highest ever quarterly profit after tax EPS including discontinued operation stand at 32.93 rupees as compared to 29.39 Rs. Yoyo the Board of Directors has declared a one time special dividend of rupees 18 per equity share of face value rupees 10 on completion of the railway business divestment on consolidated basis. Company financial performance for the quarter ended December 2025 is as follows.
Revenue from continuing operation at 3280.5 crore up by 11.3% YoY EBITDA at Rupees 434 crores with a margin of 13.3% up 196 basis point YoY reported net profit at 358.3 crores up 11.8% YoY and adjusting for one time impact from new labor code, normalized profit grew by 38.1% yoy. Moving on to the segmental business performance starting with the tractor business in Q3FY26 the total tractor industry domestic plus export was at 3.5 lakh tractors up by 23% as compared to the corresponding quarter last year. Our total tractor volume was at 36,955 tractors up by 13.5% as against 32,556 tractors in the corresponding quarter previous year.
On the domestic front, the domestic tractor industry reached 3.3 lakh unit in Q3FY26 registering 23.2% growth YoY. This momentum was supported by favorable government policies, lower GST rate, healthy agriculture conditions including adequate water reservoir levels and state level subsidiary program that enhanced farmer affordability. While the industry delivered strong growth, our domestic performance was moderated by regional disparity. The north and the central market continued to underperform as compared to the other region. Other region grew by 34.2% and limited availability of E models impacted our sales momentum. Our domestic sales were at 35,373 tractor up by 12% YoY as compared to 31,585 tractor in the corresponding quarter.
Our recent product introduction strengthening financial partnership and deeper dealer engagement help maintain healthy market share for farm tech brand. In the cold geographies the Pro MAX series continue gain traction with the order inflow now exceeding current supply level and we are scaling up our production to meet this demand. In the coming next six to eight months we will be launching new models and upgrade across all brands to address key product gap. The full market impact of this refreshed product portfolio is expected in the end of FY27 and we are confident that these initiatives will further reinforce our competitive position.
Looking ahead, we expect the current industry momentum to sustain its growth trajectory. Domestic tractor industry is likely to reach a new peak of around 11.5 lakh units this fiscal year supported by healthy water river reservoir, anticipated robust crop yield, reduced GST rate, higher MSP minimum support price and improved terms of trade. On export front, the tractor industry in Q3 FY26 at 26,600 tractors up by 20.1% as against 22.1 thousand tractors in the corresponding quarter. Our export volume was at 1582 tractors up by 60 approximately 63% as against 971 tractors in the corresponding quarter. During quarter sales to Kubota Global Network account for approximately 68% of the total export on the non tractor revenue comprising of agri solution business, engine business and spare part in the service part business in Q3 constitute around 21% of the agri machinery segment revenue at par with the corresponding quarter and as against 17% in the sequential quarter during the quarter.
Under agri solution business we have introduced the next gen of rice transplanter Ka6 and Ka8 model engineer in Japan for precision efficiency and comfort. These new models deliver higher productivity, superior planting precision and enhance operation comfort and as we move forward we remain committed to introduce more advanced product to the market. Agri machinery product segment revenue came at 2769.6 crore up by 14.6% as against 2416.6 crore in the corresponding quarter. EBIT margin for the agri machinery business were up by 310 basis point at 13.5% as against 10.4% in the corresponding quarter. Led by easing material costs, better operating leverage and cost control measures coming on to the construction equipment business in Q3 FY26 industry volume across crane, backloader, mini excavator and compactor declined by approximately 60% primarily due to the higher base of last year caused by pre buying ahead of emission norm change coupled with extended monsoon and slower mobilization on infrastructure products.
Our total volume for construction equipment business were at 1716 machines as against 1989 machines in the corresponding quarter and up by 49.7% as against 1146 machine in the sequential quarter. Construction equipment segment revenue came at 489.9 crore as against 515.7 crores in the corresponding quarter. EBITDA margin for the quarter ended December 20th, 2025 came at 6.6% as against 11% in the corresponding quarter and was up by 280 basis points as against 3.8% in the sequential quarter. In our journey to innovation during the quarter, company expanded its earth moving and construction equipment portfolio with the Launch of Kubota U22.6 mini excavator offering advanced precision and compact performance for urban and confined area applications.
We also showcase Hydra 15 mining and BLX 75K backloader prototypes reflecting our focus on rigid mining requirement and next generation fuel efficient back loader technology leading the concept lineup. The Hydra 72 cranes represent a major leap in high end lifting with a new 72 foot beam and enhanced safety system. With this introduction we reinforce our commitment to engineer excellence and addressing emerging customer need. It is worthwhile to note that the level of degrowth in the construction equipment segment is coming down gradually for our volume from around 23.7% in Q1 to 17.8% in Q2 and 13.7% in Q3 and with Jan ending at 3.7% thus showcasing early sign of stabilization and we expect this gradual improvement to continue with the timely awarding of key infrastructure projects and better on ground execution momentum.
The Union budget for 2026-27 has further reinforced positive commitment for the construction equipment industry with public capital expenditure rising to 12.2 lakh crore. Collectively, these factors position the sector for the healthier and more robust demand environment in the coming month and the fiscal Now I will request the moderator to open the floor for the Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wish to ask a question may press STAR and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Gunjan Prithiani from Bank of America. Please go ahead.
Gunjan Prithyani
Thanks for taking my questions. Just a couple of questions. Firstly on the industry. Just wanted to hear your thoughts on the lumpiness of the industry because like you mentioned, there are a lot of these state government subsidies which have come in the last couple of months. Does this mean that, you know, as these subsidies, you know come off the industry will, you know will see some sort of deceleration. So some thoughts on how we think about F27 and the impact of these state subsidies on the growth.
Neeraj Mehra
Hi Gunjan, Good evening. This is Neeraj Mehra. So yes, to a certain extent you are right that subsidies have played a major role in the growth of the industry. But subsidies are not the only reason. The primary driver over the last 3, 4 months has been the impact of GST 2.0 plus adequate rainfalls and good reservoir levels going forward. Yes, the impact will be there if the subsidies come down. But overall the macroeconomic parameters as also mentioned by Pratik, are very positive. So at this point of time it is very early to comment on financial year 27, but we see a robust growth in quarter four and also a very robust growth in quarter one.
Gunjan Prithyani
Okay, got it. But if you were to like sort of just crystal, you know, crystal gaze into the F27 number, is it fair to say that we are not sort of fearing a down, sudden downturn hitting us in F27 because there’s been so much bunching up? I’m just trying to draw comfort. Can it be like a really down year because we’ve seen 20% plus growth for industry in fiscal 26.
Neeraj Mehra
So Gunjan, it will be very early to comment on the entire financial year now. So we’ll have a better understanding as we get into quarter one of financial year 27 plus also what the forecast of the rainfalls is. All those things will play an important part. So it is very difficult for me to comment on the overall growth or degrowth for financial year 27 as of now.
Gunjan Prithyani
Okay, got it. And this, the second question is on the, on the export business. Can you just talk about how do we see the scale up now? I know the capacity is the new capacity plan has just been announced but if you can just share a bit more color on how do we think about the ramp up over the next two years because the new plant is still going to take a couple of years given it’s a greenfield one. So some outlook on that as well.
Bharat Madan
Hi Gunjan, this is Bharat Madan. So I think on export like you said, so it’s not totally dependent on the new plant because even the existing plant also we making now products which are getting exported and that really will continue going forward too. The new greenfield plant was more meant for, you know, shifting some of the key models from Kubota system in other countries to India. So that will take some time. But the normal export which is happening to other countries within Kubota network also that will continue. So we do expect the momentum should continue in export even though the base now is slightly becoming higher. So you won’t see the similar growth of 50, 60% what you see now. But still we expect it will continue to be double digit growth in export number going forward. Even from the existing facility.
Gunjan Prithyani
Okay, got it. And last question for me on the commodity side, I mean there’s generally been a lot of commodity headwind that we’re seeing in the other segments. Can you help us understand where we stand in terms of tractors is precious is a big risk that we need to bear in mind. How is the commodity basket faring for tractors? And if there is any price intervention that’s been taken.
Bharat Madan
Till December though, we had mostly zero impact and there’s some favorable impact only of the commodity prices if you look at cumulative nine months of this fiscal. But yes, this quarter there will be some pressure because some of the metals like copper and aluminium are getting expensive. So we expect maybe some impact will be there. Tractor, we still don’t expect it’ll be a significant impact, but on construction equipment we’ve seen quite an impact this quarter. So from January itself, I think we’ve seen the steel price have gone up, so which we have taken some price increase in the CE space.
But I think the inflation was way more than what we had increased. So there is some correction which we intend to do in the prices in the construction equipment space on tractor. I think we’ll have to wait and watch and see what is the final outcome coming with the. It takes a lag of a quarter to really negotiate and finalize the prices with the supplier. It also depends on how the competition actually responds to that. So based on that, we’ll take a call. So if there’s a requirement and the industry also passes on the prices, then we’ll also take the similar move.
Gunjan Prithyani
Okay, got it. No price action taken so far, right?
Bharat Madan
No, it’s not on our overall portfolio level.
Gunjan Prithyani
Okay, got it. All right, I’ll join back with you. Thank you.
operator
Thank you. The next question is from the line of Ajax Frederick from Sundaram Mutual Fund. Please go ahead.
Ajox Frederick
Hi sir. Thanks for the opportunity. So the first question is a slight extension of Gunjan’s question. We have a probability of El Nino happening this year. My question is, are the reservoir levels enough to take us through despite us lower monsoon for the year.
Neeraj Mehra
So. Hi Ajax, this is Neeraj. Again this. So as I mentioned to Gunjan, also the reservoir levels are better. So they will actually help substantially if El Nino actually comes into effect because levels are relatively better because of the last year’s rain. But what impact they will have actually will actually get to know as we get into the end of quarter one or when the forecast for rainfalls actually come in.
Ajox Frederick
Okay, okay, so fair enough. Secondly, on the mix, sorry yeah. So sir, secondly on the mix, we’re seeing that the lower HPS less than 50 hp kind of picking up in a very small manner. But if you look at the past three years, we’ve seen that kind of dipping relatively versus the others. Is there anything structurally happening in that space where we can see that inching up further?
Neeraj Mehra
So Alex, what has actually happened is post the reduction of GST on tractors, the liquidity with the farmer has actually increased. So the farmers who were earlier looking at a 40hp or a sub 40hp tractor are now going in for a 45-50hp tractor. So over the last three to four months we have actually seen a shift towards 45-50hp segment. So that segment in the last four, five months has actually grown. It is primarily because of the additional liquidity with the farmer. So he has an additional play to. Buy a higher HP tractor with the. Same amount of money.
Sanjeev Bajaj
Okay, got it. That’s very helpful. That’s it for me. Thanks.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Vijay from Nuvama. Please go ahead.
Vijay Bhasin
Thank you for taking my questions. A couple of questions. First I wanted to check on the construction equipment side. So our volume has increased quite on sequentially. So is it fair to assume that now the industry is recovering and though there may be some year on year declines, but sequentially we should expect a better fourth quarter and going into Q1?
Sanjeev Bajaj
Yeah. Hi Vijay. Sanjeev Desai. So yes, you know, sequentially we’ve seen there is a growth or there is a lower dip in the industry quarter on quarter. And we believe that the way December month has gone by, we believe that it is a sign of reversal. However, it is yet to be seen. We believe that quarter four. Last year quarter four was low because BS5 products were introduced already. So last year quarter three was bigger than quarter four. This year it may be quarter four may be better than last year’s quarter four. If that happens, may be slightly positive, then it is a clear sign of reversal of the industry trend.
We are very hopeful. The announcements of the new projects from the government are there. It is only now we are waiting for the actual fund flow to happen to the projects and real mobilization on ground which should be visible in fourth quarter as well as in the first quarter of next year before monsoons. We are quite hopeful on that.Yes
Vijay Bhasin
Okay. How is our the industry exports on the Construction equipments are looking with the after the new norms. So our norms are now comparable to the European. So just are we seeing some reaction there?
Sanjeev Bajaj
See, we do not have much of an exposure on the products which which are exported to Europe or America. Largely our customer base is confined to Africa, Sark countries and Middle East. We see there is attraction. We see there is a growth not primarily because of the emission norm changes because most of these countries they are still at BS3 level of products. So we make BS3 products for these countries. But going forward we also intend to introduce certain products which are going to go into larger markets. For example Southeast Asia and some of the countries where BS5 products or seeing certified products are being used.
So there are new platforms which we are introducing in the due course of time in next few months which will also give us a foothold in some of the countries where the new emission norms are will take larger share of business.
Vijay Bhasin
Okay. The price increase that happened in April last year that has been fully bought in by the customer. So we are not seeing any now any weakness because of the price increase. I expect.
Sanjeev Bajaj
Yeah. On construction equipment, CB industry generally introduces price increase in from 1st of January every year. And last year, 1st of January there was a dual increase. One because of the BS5 norms change and second because of the annual inflation passed on to the customers. So that took some time. It took a couple of quarters for price realization to happen. By Q3 we realized that the price had almost stabilized in most of the product categories. However, the big dampener is the slow growth. So if the demand picks up then it will be very easy for the price increases to stabilize quickly. But when the demand is slow, of course it takes longer time for price stabilization. That’s what we’ve seen over last six months or first two quarters. In this year it has been quite slow.
Vijay Bhasin
Thank you sir. Thank you. And all the best for upcoming quarters.
Sanjeev Bajaj
Thank you.
operator
Thank you. The next question is from the line of Pramod Ante from Incred. Please go ahead. Pramod, you can go ahead with your question. As there is no response from the participants, we move to the next question. The next question is from the line of Mittul Shah from Pentomath Financial Services. Please go ahead.
Mitul Shah
Yes sir. Thank you for the opportunity and congratulations on a very strong performance. So my question is again on the FY27 outlook as we consider positive first half maybe around 15, 17% type of growth and current inventory being one of the lowest level which should help for next few months. But August onwards this year base effect Will have impact. And as we understand the monsoon 2026 will be the deciding factor for second half. But if we go into the detail in terms of the state wise number all these states are going to report a record high volume performance for FY26.
And additionally support for few states like Maharashtra, subsidy and all. So in best case scenario second half can be flattish type of number. So full year number would be like a low single digit growth which will be much lower than the long term average. Do you what is your understanding on that? Sir, even if the growth would not be there then growth would not be very high. Maybe not even 6, 7%.
Neeraj Mehra
So. Hi Mikul, Neeraj again this side. So I think your understanding is actually very very good. So you are very rightly putting all the factors in terms of the growth in terms of the first six months and post that a decline on a high base. So I tend to agree with you. But I’m being a bit cautious on giving some kind of a figure. But what all figures you have actually to a certain extent quoted seem very very logical. And to a certain extent looking right at this point of time.
Mitul Shah
Thanks sir. The second question on the construction equipment side is industry has done reasonably good on sequential basis. Why? OI of course because of the base effect there was an impact. But still if you look at a longer period of last many years, four, five years or even going forward, the industry is not picking up the way other segments like recently one construction or commercial vehicle also started doing very strong with 2030% growth. So what are the major challenges or do you think Anytime soon in next one year or two we’ll see similar 2030% growth possible as base has been much lower over last many years.
Neeraj Mehra
Yeah. Thank you Mithil. Sanjeev, this side. So. So yes, you know what, the growth which we had seen in financial year 24 was dramatic and it was. It was really encouraging. But if you look at five years period I think the CAGR has always been 8 to 9% and it is expected to grow at about 6 to 7% till FY30. 20 to 30% will be a big ask from the industry. But I think the government is doing its part by allocating the capex required for infrastructure development. Industry is also taking part in accommodating all the changes which are happening especially on the emission norms and electrification of the products or whatever technological changes are accepted.
Industry is also investing into it. If you look at last 12 months I think a lot of variables were in place. Say, for example BS5 was to be introduced. There was a price increase because of BS5 and there were monsoon which was extended monsoon for four or five months. So across the country there are various places the elections were also. Local elections were also playing a part. Now considering that all these factors are over for next year, we believe that next year should start with a strong base because these renewables will not be there. And if the investments from the government continue, we believe that next year is going to be a know turnaround year for construction equipment till FY30.
It will continue to show the momentum momentum of 6 to 7% CAGR.
Mitul Shah
Sir, related to this any color on the sub segments within construction where we see very high growth and where the segment will still face some problems.
Neeraj Mehra
Yeah. So within construction equipment our served industry we do four products. We are into cranes, mini excavators, backhoe loaders and compactors. So the sectors which are expected to do well will be connected to the roads and railways. Those sectors will definitely have the highest traction. The sectors which are not available are the sectors which are related to the construction. For example, the concrete equipments or material processing equipment industries will also do well within our product range. We believe that crane will grow faster and at the same time mini excavator has already shown signs of growth in this year and it will continue to grow next year.
Also backhoe loader and compactors will grow at a nominal rate of about 5 to 6%. But cranes and mini excavators will grow much faster.
Mitul Shah
Thank you and all the best. Thank you.
Neeraj Mehra
Thank you.
operator
Thank you. Participants who wish to ask a question you may press star and one at this time. The next question is from the line of Mumuksh Manlesha from Anandrati share and stock brokers. Please go ahead. Mumuksh. You can go ahead.
Mumuksh Mandlesha
Yeah, yeah yeah. Thank you sir. Congress on the strong business. So just this to Bharat Madan sir, board has consented the investment for the capex for acquiring the land. And also there’s a mention about the indicative investment outlay of 22.68 billion. Just if you can run through what kind of timelines we are planning to go ahead for this capex.
Bharat Madan
So mox right now the majority of I think the intent was to finish the acquisition of land this year. So which is why the investment which is approved by the board right now is only for the land acquisition. The investment which we mentioned in the DPR or the project report which has been submitted to UP government is more like indicative and that assumes certain capacities which will be built up. You Know right now for tractor and construction equipment plant in the greenfield facility. So that will depend on the demand scenario in the market or the volume silly ramp up.
But in the existing facility also we can take the overall production level a bit higher by 10, 15% from the current capacity perspective. So it really depend if the demand picks up is strong and we expect the volume gain is happening and then obviously we’ll prep on the investment in construction activity in that facility. Right now what we indicated to the government is to start this somewhere in 2029, 30, the first commercial production. But it can get preponed depending on the demand or it can get postponed also depending on the requirements.
Mumuksh Mandlesha
Got it. So and also even for some of the engine products, also spare parts also would it also start around 129.
Bharat Madan
So engine for the existing product line, obviously we’ll expand because the existing capacity in the existing Freedom facility is there for engine which can ramp up to take care of the expended facility for phase one, even for the greenfield. But as far as the quota engine line is concerned, that is not in this phase one. So that will happen in phase two depending on again the volume which we do for quota products in India.
Mumuksh Mandlesha
Got it. So then sir, for the JV companies it will take more time for the margins to further improve with the engine line coming up little later, no?
Bharat Madan
So I think there’s a plan to introduce the Indian platform under quota brand name. So that will be using Indian engines only. So the idea is to expand the margin by localizing those product and they’re working on the quality and other aspects, you know, which can really be suitable for putting the brand, quota brand on those products. So that is the first priority. But there the volumes will pick up and the margins can be at par with the Indian product line. So which is what we are trying to do first. I think engine is something which right now is a very limited uses for Kubota because we do only about 10 to 12,000 factors which are using Kubota engine today.
So rest of the product which will get introduced in future will be with the local platform. So the numbers will not be really justifying putting additional investment, you know, to justify that sort of volume. Unless like I said, the export volume really picks up and then we’ll have to use those engines. So but that will be slightly later, not in phase one.
Mumuksh Mandlesha
Got it, sir. And anytime space source, how do you see that going up?
Bharat Madan
So we intend to put up a spare part warehouse will be a mother warehouse. Right now we are using a rented facility for Spare parts using component export or for spare parts sales.
Mumuksh Mandlesha
Yes, right.
Bharat Madan
Component export, yes.
Mumuksh Mandlesha
Components. Yes sir.
Bharat Madan
Okay. Okay. So that is continuing even today it’s happening. So. So that’s a hurrying. The intent is to continue with that and ramp it up. So we adding more product now. So I think next year we’ll see the better number coming in from component export side also because we are putting up a line for transmission for the harvesters now in the existing facility and that has started production. So for this quarter also I think the numbers will start looking, looking up. So next year almost you’ll see probably the good ramp up will happen on the component export.
Mumuksh Mandlesha
Got it. So and so finally just on the construction equipment we plan to do something 15,000 kind of capacity. Currently we have 10,000. So just a little thought on the, I mean over a medium to long term should we expect construction equipment to be more stronger growth area for the company as there’s a more bigger plan to expand
Bharat Madan
No, so the idea was the existing facility is not sufficient actually space wise. So we actually using lot of rented space in the existing facility to do this production today. So the idea is once you set up a greenfield facility we will probably look at shifting some of this facility in Sridharbar to that place and we get this facility. So the 15,000 will be the total cumulative capacity which will be there at that time. So some of the facility in Freedabad police will shut down after this infill gets comments.
Mumuksh Mandlesha
Got it sir. Thank you so much for the answers.
operator
Thank you. The next question is from the line of Jinesh Gandhi from Oakland Capital. Please go ahead.
Jinesh Gandhi
Yeah, hi audible. Yeah, My question is on exports, exports of tractor. Given that this USPA has been signed and probably it will come into effect in another year, year and a half, does it now open up EU market for us in a material way? Given existing foothold of Kubota in the European markets, what else we will need to do to enable this opportunity on the European export side?
Bharat Madan
Europe we are already exporting and today the duty on tractor in Europe is zero. So there’s not going to be any impact of the any fta you know which we signed with the EU the bilateral agreement which is signed. So that doesn’t have any significant impact on the tractor industry per se. This will impact some of the component export for the auto component manufacturers from India. But on tractor it’s not going to be any significant impact. But yes, if the US deal gets you know signed off. So today a lot of exports are happening from Koda, Japan to US and Japan, I think there’s a tariff of 15%, and against that, if India comes at 18%.
So even with the blended rate of the metal tariff of 50%, the blended rate will be somewhere around 22, 23%, which in Japan today is about 18%. So it’s a 4 to 5% delta differential which will come from India. But I think it will make a lot more sense to produce in India at a lower cost and still look at exporting to US market. So that’s the potential scenario, which in any case, Kubota was working on. So there’s a plan to shift some of the products to India. So I think that will happen for the greenfield facility will be up and running. So. So that’s very much in the plan.
Jinesh Gandhi
Okay. Okay. So the current Kubota’s requirement in Europe for small HP tractors is met through India, or it’s only partly metro Indian throughout the geography.
Bharat Madan
So we are supplying from India. So. So they do have some of the manufacturing in Europe also, and they’re also importing some of the stuff from Thailand and Japan. But what we supplying from India essentially is being used to compete against many supplies from India and China in those market because they can’t compete with their product portfolio, you know, with those supplies, with the cost differential is very high. So the Indian supplies are helping them in retaining market share in the European market. And today I think we’re looking at good numbers coming in, I think the order requirements.
So the order book is quite good, I think, from Europe today. And we are trying to ramp up the capacities and add more product to the portfolio to continue supplying to them.
Jinesh Gandhi
Got it, Got it. Great. Thanks. And all the best.
Bharat Madan
Thank you.
operator
Thank you. The next question is from the line of Vikram Damani from Damani family office. Please go ahead.
Vikram Damani
Hi, good evening. Am I audible? Yeah, we can hear you. So you all were to publish an updated midterm business plan, as per some previous calls. Any status, any status updates on that?
Bharat Madan
So right now I think the parent company is to first adopt the overall midterm business plans. So we expect they will do, I think sometime in the. Maybe within this quarter or maybe in the coming meeting. So I think we’re not tired. Maybe they were exposed to do it in February. So maybe once the adoption happens at their end, then the India plan discussion will start. So we expect maybe within few months, maybe in next quarter, we should be able to come up with the one plan.
Vikram Damani
Okay. The reason why I ask is because. The new plant has taken quite some. There’s been quite a bit of delay. So just trying to get a sense of where we are today as a company with all the duties and everything. So like you said, hopefully in the next three months we should get an updated midterm business plan. Yes.
Bharat Madan
Yeah, that’s right.
Vikram Damani
Okay. Thank you so much. All the best.
Bharat Madan
Thank you.
operator
Thank you. The next question is from the line of Ayush Anand from Paris Cap Ventures. Please go ahead.
Ayush Anand
Good evening, sir. So my question is which all machines are covered under the CIE scheme? ARTA incentives, PLIs based on capital subsidies.
Bharat Madan
You’re asking for the construction equipment side?
Ayush Anand
Yes, sir.
Bharat Madan
Rajiv, can you respond to that?
Sanjeev Bajaj
Yes, sir. So if you’re referring to the latest announcements in the budget about pli, these are primarily, you know, export substitution equipment. So equipments on which are currently are largely imported. Say for example tunnel boring machines, we don’t produce in India. And it is, it is being imported hundred percent. And similarly very large cranes or you know, crawler cranes which are primarily imported. So those are the segments which government wants to substitute with the local manufacturing. And that is where the PLI has been announced. Although the fine print is yet to come. But the direction is wherever we are dependent on imports, 100%.
Those sectors need to be localized. That’s the direction. And that does not apply to us because we are not in those segments as of now.
Ayush Anand
Okay sir, that is from my side.
operator
Thank you. Anyone who wishes to ask a question may Press Star and 1. The next question is from the line of Mithil Shah from Pantomat Financial Services. Please go ahead.
Mitul Shah
Sir. Thanks for follow up opportunities. My question is on market share. If you look at the market share fall and then again we started now recovering. But in overall this scenario of last two two and half year, Kubota brand has been still struggling despite Maharashtra and South doing much stronger performance in last one one and a half year. So where do you see the exact challenges and what could be the strategy going forward for that?
Neeraj Mehra
So you are right. Mithul Neeraj, this side. So yes, Kubota initially had been struggling and that struggle to a certain extent has reduced with the introduction of certain new products in July and August. I think the market share in terms of Kubota will improve as certain new product introductions are also lined up in the Kubota brand over the next couple of quarters. So we will see a gradual increase in market share in Kubota, I think from H2 onwards.
Mitul Shah
What is your understanding? Where is the challenge in terms of competition, launching new products or any price aggression by competition or our cost structure is some issue. So where do you see major problem which was not the case earlier. In fact Koverta was doing much better till last year. In last one and a half, two years sudden decline has come.
Neeraj Mehra
So Mithul, major I think issue is on the product side but the product lineup is not very strong there. So we had only two models which we are producing for Kubota in India. So there was a market potential, there was very limited. Second since most of these stuff are getting imported even today like engine we are still importing. So the cost structure doesn’t really justify. So the kind of pricing which we have for quota products in the market is way higher than believe what competition is offering today locally. So these two factors are the key factor which are impacting the overall volume.
Which is why we are very positive. Once we introduce the Indian platform under this, that brand name which is what the other competitors multinational competition has done then your profitability will increase. You’ll be able to compete much better and the product portfolio will also expand. So today it’s very restricted portfolio catering to only about 40, 50% of the market addressable market. But once you take it light to level of 70, 80% then you will have much larger opportunity. And then they can also start looking at expanding on a regional basis. Right now they’re very focused on southern and western market but they’re not really very strong in the in the northern, central.
So radius when the portfolio is there then we can also expand to these market. So that is in the pipeline. So that’s why it says from this year I think we’ll see the launches will start happening. Although the Indian platform will still take I think what year, year and a half to really come where you get a complete range under that brand name.
Mitul Shah
Understood sir. Thanks.
operator
Thank you ladies and gentlemen. That was the last question. I would now like to hand the conference over to the management for closing comments.
Prateek Singhal
Thank you ladies and gentlemen for being present on this call. For any feedback or queries, Please write us. Relationscortscobota.com thank you very much and have a good evening.
operator
On behalf of Anand Rati Share and Stock Brokers Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.