Escorts in red as it vies to get trimmer

Escorts is in a bit of a spot today, with the stock trailing in the red, currently down 1.5% at Rs.159 levels. The stock as recovered since low levels of Rs.156 it hit in the early morning trades.

The stock price is reacting to the news of the company aiming to get leaner and trimmer by reducing its bulge of employees.

The company has announced a restructuring package wherein it has initiated a VRS, the largest at Escorts to be availed by some 350 employees. The company has stated that the impact of this exercise will be around Rs.30 crore, with a payback running into two years. It expects a one-time impact in current Q2 numbers. This VRS will close within 30 days.

Meanwhile monthly sales number for Sept’14 was good, with the company showing an over 9% growth in volume sales in agri machinery products. It sold 7,072 tractors, growth of 9.4 percent against 6,465 tractors in September 2014). Domestic sales in September 2014 stood at 6,844 tractor as that of 6,397 in September 2013. Export for the month of September 2014 stood at 228 tractors as that of 68 tractors in September 2013