Escorts Kubota Ltd

Powering sustainable growth through deeper integration and shared excellence

At Escorts Kubota Limited, we have always believed that true progress stems from strong foundations, purposeful collaboration, and a commitment to creating lasting value. Nearly three years ago, our integration with the Kubota Group marked a pivotal moment in our journey, bringing together Escorts' legacy of trust and engineering prowess with Kubota's global capabilities and future-facing innovation. The result: a unified, future-ready enterprise with a clear vision and a powerful sense of purpose. Today, this powerful synergy continues to unlock new pathways for growth, transformation, and long-term societal value. Anchored in the spirit of ‘On Your Side,' we remain persistent in our commitment to standing alongside our customers, employees, shareholders, partners, and communities. By understanding their aspirations, addressing their evolving needs, and delivering solutions that drive sustainable progress, we are shaping an organisation that is ready for tomorrow. We are pleased to present our 79^th Annual Report, an enduring testament to our commitment to delivering consistent value and our ongoing transformation into a Company that is trusted by society, admired by employees and positioned to serve both India and the world. The year 2024 marks a momentous milestone as we celebrate 80 years of Escorts Kubota, a journey shaped by resilience, innovation, and a deep commitment to nation-building. This anniversary is not merely a reflection of our past; it is a reaffirmation of our purpose and promise for the future.

It is a time to express gratitude to generations of customers, partners, and employees who have placed their trust in us, and to renew our resolve to drive prosperity and create lasting value in the decades ahead. We are also proud to share that during the year, we successfully completed the merger of Kubota Agricultural Machinery India Pvt. Ltd. (KAI) and Escorts Kubota India Pvt. Ltd. (EKI) into Escorts Kubota Limited (EKL). This strategic consolidation, approved by the EKL Board and requisite regulatory authorities, marks a pivotal milestone in our evolution. By bringing our joint ventures under a single umbrella, we have embraced the spirit of 'One EKL', a unified entity geared towards greater agility, efficiency, and resilience. This integration unlocks powerful operational synergies, streamlines our corporate structure, fortifies our business fundamentals, and strengthens our overall risk posture. Under the unified identity of One EKL, we are better positioned to accelerate innovation, broaden market access, and drive sustainable long-term growth across both the agriculture and construction equipment sectors. Our focus is persistent on delivering customer-centric solutions and building future-ready capabilities that generate enduring value for all stakeholders.

Our partnership with Kubota signifies a compelling convergence of complementary strengths bringing together Japan's hallmark precision, technological excellence, and process rigour with India's entrepreneurial agility, executional speed, and cost competitiveness. More than a cultural amalgamation, this collaboration reflects a deliberate and deeply strategic alignment that positions us at the intersection of innovation and efficiency.

In a world where Indian companies are increasingly competing on a global stage both domestically and internationally the need to deliver world-class quality at competitive costs has become a strategic imperative. This duality forms the bedrock of our approach, empowering us to design advanced, scalable solutions without compromising on the responsiveness and agility that define market leadership in today's dynamic environment.

At the heart of this Indo-Japanese alliance lies a shared commitment to co-creating value through close collaboration. Converging Japan's engineering depth with India's dynamic execution is a complex yet high-impact endeavour that demands seamless integration across geographies and functions. From process design to real-world deployment, our cross-border teams of Indian and Japanese engineers are jointly developing technologies that are both future-ready and market-aligned. This spirit of partnership rooted in continuous learning and purposeful innovation fortifies our stakeholder relationships and enhances our ability to lead with resilience and intent in an increasingly competitive global landscape. This year marked a significant milestone in strengthening the strategic integration between EKL and the Kubota Group. As Kubota advances toward becoming a world-leading brand, India and EKL in particular is poised to play a pivotal role in driving this global transformation. A key development in this journey was the establishment of shared service capabilities within EKL, especially in IT and R&D. Though these capabilities began at a modest scale, they lay the groundwork for a centralised support system designed to serve multiple Kubota entities worldwide. This evolution not only enhances operational efficiency and cost-effectiveness but also creates a scalable platform for innovation, collaboration, and accelerated speed-to-market. These shared services are designed to unlock group-wide synergies, accelerate product development, and improve our responsiveness to rapidly shifting global market needs. EKL's growing competence in this space positions us as a strategic enabler of Kubota's operational excellence and long-term competitiveness. Looking ahead, we remain focussed on expanding our shared service portfolio and reinforcing EKL's role as a centre of excellence. Our ambition is to support Kubota's growth aspirations across geographies and firmly establish India as a strategic cornerstone in the Group's global vision.

At Escorts Kubota, building for India is not merely a commitment, it is the purpose that propels every action we take. We are proud to be a key contributor to India's growth story, capitalising on the immense opportunities within the agriculture and construction sectors. In agriculture, the nation's focus on enhancing farm productivity and ensuring food security resonates strongly with our commitment to mechanisation. The Indian agricultural machinery market is poised for significant expansion, with projections indicating growth from USD 18.15 billion in 2025 to USD 27.29 billion by 2030, at a compound annual growth rate (CAGR) of 8.5% (Source: Mordor Intelligence). This strong growth trajectory is underpinned by the increasing adoption of advanced farming technologies. We are privileged to be at the forefront of this transformation, delivering solutions that enhance the productivity, profitability, and prosperity of Indian farmers. Looking ahead to 2025, the Indian construction equipment industry is poised to play a pivotal role in driving the nation's economic progress. A strong alignment between government policies and industry needs, along with the rising adoption of sustainable and digital solutions, is expected to propel the sector forward. While challenges such as high capital costs and evolving environmental compliance frameworks persist, the immense opportunities created by infrastructure development, rapid urbanisation, and technological innovation far outweigh these obstacles. The sector is entering a transformative phase, with a strong growth trajectory that will define the next era of India's economic advancement. A supportive policy environment, together with the growing focus on sustainability and digitisation, is set to propel this transformation and unlock new frontiers for the construction equipment industry. Realising this potential will require shared commitment from both the government and industry stakeholders. By working together with manufacturers, suppliers, contractors, and regulators, we can transform India's infrastructure landscape in a way that balances growth with responsibility.

At Escorts Kubota, we are fully aligned with the aspirations of India's future. By combining our technological expertise with a deep understanding of local market needs, we are empowering stakeholders across agriculture and construction to achieve new levels of innovation, productivity, and resilience. Our focus on mechanisation and excellence enables us to play a meaningful role in building a stronger, more resilient India for today and the future.

At Escorts Kubota, the spirit of ‘On Your Side' remains the driving force behind every initiative we undertake. Through strategic collaborations, innovative solutions, and a relentless focus on excellence, we continue to create lasting value for all our stakeholders, today and for generations to come.

Our customers remain at the heart of everything we do. As we continue to build a future-ready organisation, we are committed to delivering innovative products and solutions that exceed expectations. Through initiatives like the launch of Escorts Kubota Finance Limited (EKFL), we have expanded access to tailored financing solutions, ensuring customers have the right support when they need it most. Guided by the ‘On Your Side' philosophy, we listen actively to our customers, understand their evolving needs, and offer solutions that empower them to succeed. We also continue to build knowledge and capability through programmes delivered by Escorts Kubota Advanced Farming Institute (EKAFI) and structured training for dealer sales teams. These initiatives help customers adopt modern practices, increase productivity, and navigate challenges with greater resilience.

We remain deeply committed to driving sustainable shareholder growth by strategically investing in high-potential sectors, fostering innovation, and maintaining a consistent dividend policy. Over the years, our market capitalisation has witnessed remarkable growth, rising from 600 crores as on March 31, 2013, to more than 36,300 crores as on March 31, 2025, reflecting a growth of approximately 60 times over the past 12 years. This strong performance reflects the strength of our strategic decisions, operational excellence, and commitment to delivering long-term value.

In line with our commitment to delivering enhanced value to our shareholders, the Board has declared an interim dividend of 10 per equity share (100% of face value) for the fiscal year 2024–25. Additionally, a final dividend of 180% has been recommended, amounting to 18 per equity share. With the interim dividend already paid, the total dividend payout for FY 2024-25 will amount to 28 per equity share (on a face value of 10 each), representing a 56% increase over the previous year. This significant increase reflects our appreciation for the continued trust and support of our shareholders. As we continue to drive innovation, maintain transparency, and invest strategically in future growth opportunities, we are confident in our ability to deliver sustainable and superior returns in the years to come.

We view our dealer partners as vital extensions of our brand and business. Their success is central to our own. By offering a wide portfolio under Kubota, Farmtrac, Powertrac, and other Escorts brands, we equip dealers to better address a diverse range of customer needs. To strengthen their profitability and efficiency, we have introduced enhanced financing solutions, optimised inventory management, and streamlined working capital cycles. We continue to nurture both longstanding partners and new entrants—whether by providing structured growth opportunities to high performers or hands-on support to those just starting out. Recognising that profitability is the strongest motivator, we remain committed to ensuring that every dealer, regardless of scale or tenure, has the tools to grow sustainably.

Our people are our greatest strength, and we are committed to nurturing a high-performing and inclusive workforce, one that thrives in a culture of trust, respect, and continuous growth. This commitment has earned us recognition as a certified Great Place to Work by GPTW Institute, reflecting the strong people practices and positive environment we've built together. The formation of One EKL marked a significant milestone in our journey. We ensured that the integration process of bringing two legacy organisations together was guided by empathy and a strong focus on people. Every team member was engaged throughout this seamless transition, underscoring our commitment to stability, trust, and shared growth. Building on this foundation, our talent strategy in FY 2024–25 remained centered on developing internal talent, fostering inclusion, and preparing our workforce for global opportunities. Over 85% of key leadership roles were filled internally, reinforcing our belief in nurturing talent from within.

Simultaneously, targeted campus and lateral hiring brought fresh perspectives into critical areas such as R&D and IT shared services. To strengthen engagement and work-life balance, we implemented a 5-day work week for all managers across organisation and structured onboarding and mentorship programme for campus hires. Our internal engagement score consistently remained above 80, reflecting a culture where people feel valued and empowered. We continued to scale impactful learning platforms like Escorts Kubota Capability Advancement Program (EKCAP) for capability building and UDAAN for women's leadership development—both of which delivered measurable business outcomes. The Management Development Program with premium management institutes for senior management, along with cross-border learning opportunities with Kubota Japan, U.S.A., Europe and Thailand have further equipped our teams with global exposure and cultural intelligence. Our focus on diversity and inclusion has yielded tangible results, including 40%+ women among campus hires and improvement in overall gender diversity from 7.1% to 8%. Women-centric initiatives now span career development, wellness, and flexibility, providing holistic support. We continue to prioritize employee well-being through comprehensive health coverage, maternity and parental benefits and flexible work options. Our strong safety framework, infrastructure accessibility, and regular POSH training reinforce a culture rooted in respect and care. As one EKL, we move ahead with gratitude for the resilience of our people, the strength of our shared culture, and the opportunity to build a future where everyone thrives together. With our people always On Your Side, we remain committed to a workplace where trust, inclusivity and continuous growth empower every individual to rise.

As we reflect on the year gone by, we are pleased to share the significant strides we have made towards strengthening our leadership position across the agri machinery and construction equipment sectors. Our commitment to innovation, operational excellence, and customer-centricity has been instrumental in achieving these milestones.

During FY 2024-25, EKL achieved a new milestone in financial performance from continued operations. Our highest ever standalone operating revenue reached 10,187.0 Crores, reflecting a 4.7% year-over-year increase. Our EBITDA grew by 4.0%. Net profit stood at 1,110.0 Crores with a PAT margin of 10.9%. We are thankful to all our customers, dealers, suppliers, employees and other stakeholders who contributed to helping us achieve current level.

The domestic tractor industry witnessed a strong recovery in FY 2024–25, recording 7.3% growth with total sales reaching ~9.40 Lakhs units. This performance brought the industry close to its all-time peak, reflecting a healthy rebound following the previous year's moderation. The growth was driven by favourable rabi and kharif seasons alongside improved terms of trade. Exports remained relatively stable, with a modest 1% increase. Escorts Kubota's total tractor sales grew by 1 % year-on-year, reaching 115,554 units in FY 2024-25 compared to 114,396 units in the previous year. With the formation of One EKL, we have 3 powerful brands, Farmtrac, Powertrac and Kubota which have distinct and differentiated positioning in the market catering to 3 customer segments. Our Company is accelerating investments for strategically expanding product portfolio to cover all segments ranging from 'Value for money' to 'Premium'. A step in this direction is the launch of the Promaxx Series under the Farmtrac brand, offering advanced technology and versatility in the 31 to

50 HP range. This series targets key markets such as Gujarat, Maharashtra, Chhattisgarh, Odisha, and parts of Madhya Pradesh, addressing product gaps in this HP segment. The Promaxx Series is expected to contribute meaningfully to market share gains over the coming years. Our product development is closely aligned with the changing customer needs, such as, 4-wheel drive, higher comfort and ease in operation. Our plan for strengthening R&D for developing superior products for India and value innovative products for the world is progressing well. We have restructured our New Product Introduction Process by taking the best of Kubota and Escorts, Japan and India.

Non-tractor revenue streams continued to strengthen. Revenue from agri solutions, engines, service, and spare parts accounted for 20% of Agri Machinery revenue, up from 17% a year ago. The strong performance in the Agri Solutions division was primarily driven by the success of our paddy-focused products, particularly harvesters and planters, along with sustained momentum in land preparation and mass implement segments. Encouraged by this robust growth, we are reinforcing our commitment to this sector through targeted investments in manufacturing capacity, product innovation, and solution development. In a pioneering move, Kubota introduced half-feed technology combined harvesters in India. This innovation enhances efficiency in harvesting long-grain rice while significantly improving straw and crop residue management, reducing at least two additional field operations for farmers. We also launched the Kubota harvesting plough commercially in East and South India, along with safer, next-generation balers in the southern region as part of our post-harvest solutions. Building on this momentum, we are set to roll out advanced precision planting solutions for paddy in the upcoming quarter. The Services and Spare Parts business delivered a strong performance during the year, underscoring our commitment to enhancing the lifecycle value proposition for our customers and supporting the long-term sustainability of our core offerings. While the performance of the spare parts segment remains closely tied to the tractor business, we continued to drive operational efficiencies and improve service delivery across the board. A key step in this direction was our transition to a larger, more advanced central warehouse, a move designed to enhance productivity, streamline operations, and support future growth. In the Engine Business, we strengthened our market presence through grassroots marketing efforts, active participation in local exhibitions, and strategic expansion of our dealer network. While brand visibility continues to grow, our consistent on-ground engagement and focused channel development have established a solid foundation for long-term growth.

In FY 2024–25, Escorts Kubota sold 6,484 construction equipment units, compared to 7,141 units in the previous year, reflecting a 9.2% decline in volumes amid market challenges.

Despite a mixed volume performance across products, we continued to invest in building a well-rounded and future-ready construction equipment portfolio. While Backhoe Loader (BHL) volumes declined by 17.5%, and Compactor volumes declined by ~29%, these movements reflect broader market conditions and transitional dynamics around regulatory compliance and product readiness. In line with evolving regulatory norms and sustainability priorities, we introduced Stage V emission-compliant products during the year, including an entry-level Hydra crane and the BLX 75 backhoe loader under the E-Kubota brand. While the adoption of Stage V products may create some near-term pricing adjustments and volume impacts in FY 2025-26, we are confident that government-led infrastructure investments will continue to unlock long-term growth opportunities in the construction equipment sector.

During the year, the Board approved the sale of the Railway Equipment Division as a going concern on a slump sale basis. This strategic decision followed a thorough review of our long-term priorities. With limited global presence, the division was identified as non-core. Its divestment allows the business to grow under more focused ownership while enabling us to sharpen our focus on core sectors, agriculture and construction equipment, where we see strong potential for leadership, innovation, and sustained growth.

Our export strategy is a key pillar in reinforcing our global presence and capitalising on emerging opportunities in high-growth international markets. By leveraging Kubota's expansive distribution network, we are positioned to cater to the diverse needs of over 120 markets worldwide. Our strategic focus includes deepening penetration in high-potential regions while expanding further into Kubota's well-established markets like Mexico and Turkiye. Beyond scaling supply, our approach is centered on aligning product offerings with the distinct requirements of each region, with a strong emphasis on enhancing retail penetration. In parallel, our compact tractor segment continues to demonstrate strong and consistent performance, reinforcing our ability to cater to diverse market needs. In FY 2024–25, we exported a total of 4,991 compact tractors, of which 70% units were in the sub-30 HP category. France remained a leading destination followed by Poland. When compared to FY 2023–24, where compact tractor exports totaled 5,619 units, the performance in FY 2024-25 reflects a marginal decline in overall volumes but continued strength in key European markets especially France and Poland. This steady demand across France and Poland highlights our sustained relevance in mature European markets, particularly in the compact segment, and reaffirms our strategic focus on product-market alignment. As we scale our export operations, we remain deeply committed to refining our product portfolio, including compact and high-horsepower tractors to meet specific regional needs. This strategic direction reinforces our goal of positioning Escorts Kubota as a trusted global brand, grounded in innovation, quality, and customer-centricity.

In line with our long-term growth strategy, we took decisive steps during the year to strengthen our capabilities, expand our global footprint, and build a future-ready organisation. We are pleased to share that Escorts Kubota Finance Limited (EKFL), a captive NBFC received its Certificate of Registration from the Reserve Bank of India (RBI). With operations set to scale fully in next 12-18 months, EKFL will significantly enhance our ability to offer customised financial solutions, empowering customers and strengthening our overall value proposition.

A key contributor to our philosophy of shared excellence has been the establishment of our dedicated components export hub. This strategic initiative enhances our integration with Kubota Group's global supply chain, enabling us to supply high-quality components more efficiently to international markets. By supporting global operations with Indian manufacturing strength, we are not only expanding our international footprint but also fostering greater collaboration, value creation, and mutual growth across borders.

We continued to drive manufacturing excellence across our tractor and crane portfolios during the year. In our tractor manufacturing operations, we focussed on enhancing production efficiency through automation and the modernisation of assembly lines. This has enabled us to deliver high-end, compact, and safe models with enhanced performance, durability, and overall product quality. By integrating design-for-manufacture principles, we are optimising material usage, reducing costs, and elevating manufacturing standards. In the construction equipment segment, we are making significant strides towards the development of safer, higher-reach models equipped with advanced performance features and elevated safety standards. Our strategic focus is on optimising material costs, refining production techniques, and leveraging precision manufacturing to enhance operational efficiency. This approach enables us to achieve superior throughput while maintaining consistent, high-quality standards across all our construction equipment. By continuously improving these aspects, we are positioning ourselves to meet the evolving demands of the market and deliver reliable, high-performance machinery that aligns with industry needs. To support our expanding portfolio, we are reinforcing our service and spare parts logistics network, minimising equipment downtime and ensuring swift, reliable access to critical components. In parallel, we are investing in operator training programmes aimed at enhancing the effective use of our machinery, enabling customers to maximise performance and extract greater value from their investments. Together, these initiatives underscore our continued focus on manufacturing excellence, service reliability, and superior customer satisfaction.

We are enhancing customer engagement and operational efficiency through strategic digital innovations. Several digital platforms have been introduced to support our ecosystem: the HumDum Plus App for customers, the Seva Chakra App for dealers, and the HumDum App for distributors, retailers, and local mechanics. These tools provide features like real-time tractor tracking, service reminders, ticket management, and instant feedback, enabling quicker and more effective service resolution.

To meet the growing demand for skilled technicians, we have built a comprehensive digital training ecosystem. This includes interactive e-learning modules and instructor-led sessions designed to improve knowledge retention. Our network of training centers across India, anchored by our flagship facility in Bengaluru, operates in partnership with government agencies to deliver advanced skill development, ensuring high-quality, responsive service that meets our customers' evolving needs.

Our capital allocation philosophy remains clear and compelling: deploying resources strategically where they create maximum value, innovate with intent and ambition, and deliver consistent returns to our stakeholders. With this approach, we are not just expanding capacity, we are shaping the next chapter of Escorts Kubota's journey, built on strength, resilience, and shared progress.

We have earmarked 400 crores in capital expenditure for the year ahead. Majority of this investment is dedicated to new product development, strengthening our innovation pipeline across agriculture and construction equipment. The remaining is allocated towards enhancing and modernising our manufacturing capabilities to ensure we remain at the forefront of quality, safety, and efficiency. We are embarking on one of the most transformative initiatives in our journey, a significant greenfield expansion that will unfold over the coming years in carefully planned phases. The upcoming greenfield facility marks a major step forward in expanding our production capabilities, especially for high-horsepower tractors that are seeing rising demand across Europe. More than a capacity enhancement, this strategic investment reflects our ambition to transform operations and reinforce our industry leadership. With early groundwork already underway and strong institutional support backing the vision, this initiative is poised to play a pivotal role in strengthening our leadership, driving breakthrough innovation, and unlocking long-term value. As we move into FY 2025-26, we are ready to embrace a new era defined by purposeful investment, innovation-led growth, and a renewed commitment to excellence.

At Escorts Kubota, we believe that growth finds its true purpose only when it uplifts communities and contributes meaningfully to a sustainable future. Over the past year, we have further strengthened our commitment to environmental stewardship through focused initiatives that reflect our deep sense of responsibility towards the planet. We have made substantial investments in the upgradation of effluent treatment plants and rainwater harvesting systems across our operations, critical steps towards responsible resource management are aligned with our long-term environmental objectives. While many of these initiatives were launched last year, several are currently underway and are expected to reach completion in the current financial year. For us, these are not merely compliance requirements, but deliberate investments in a greener, cleaner tomorrow.

Our broader CSR philosophy is rooted in the belief that businesses must act as catalysts for positive societal transformation. At Escorts Kubota, we are committed to fostering inclusive and sustainable development through initiatives that drive agricultural transformation, environmental stewardship, and community empowerment—especially for women and marginalised groups. A key pillar of our commitment is the Escorts Kubota Advanced Farming Institute, aimed at building a resilient agricultural ecosystem. This institute focuses on enhancing farmers' capabilities by promoting scientific and sustainable farming practices and facilitating access to advanced technologies. It stands as a testament to our long-term vision of uplifting farming communities through knowledge and innovation. In response to the urgent challenge of climate change, our Swachh Akaash (Clean Skies) Initiative is a pioneering program designed to empower grassroots women farmers in Gujarat. Through targeted skill development and entrepreneurship training, the initiative equips vulnerable women to mitigate, adapt, and build resilience against climate-induced risks—helping transform adversity into opportunity.

Our commitment to community development extends further through educational and environmental initiatives. We have worked to strengthen the infrastructure of government primary schools and provide soft skills training for young women from underserved communities in Haryana, initiatives that aim to equip the next generation with tools for a better future. Additionally, as part of our environmental stewardship, we have rejuvenated a wastewater pond in Sadpura village, Faridabad, and carried out tree plantation drives to restore the local micro-climate, benefiting both the ecosystem and the wider community. As we look ahead, we are committed to deepening our ESG journey - embedding sustainability, inclusion, and responsibility into every layer of our operations. Our focus remains on scaling our initiatives, evolving with the needs of society, and contributing meaningfully to a resilient and better future for all.

As we look ahead, our strategic priorities will focus on accelerating growth and expanding margins by introducing new products built on efficient and smart design principles. Strengthening our channel ecosystem and expanding our product portfolio remain key to deepening market presence. A significant thrust will be on identifying and entering white space opportunities across our businesses, unlocking new avenues for innovation and future-ready offerings. Guided by this agenda, we are committed to harmonising global best practices with deep local insights, scaling innovation, and driving excellence across every facet of our operations. Our overarching strategy is anchored in sustainable growth, powered by advancements in technology, expanded manufacturing capacity, a stronger farmer connect, and a deep integration of environmental, social, and governance (ESG) principles into the fabric of our business. Stronger integration with customers, partners, and teams will further enable us to deliver smarter solutions faster, enhance competitiveness, and build a more agile, resilient organisation. As India transforms, Escorts Kubota is proud to be a catalyst for rural prosperity, infrastructure development, and a greener, more inclusive future. As we turn the page to a new chapter, we express our heartfelt gratitude to all our stakeholders. Together, we are not only strengthening Escorts Kubota, but also shaping a future built on impact, resilience and shared success.