Escorts Kubota to Invest ₹4,500 Cr in New Plant Expansion

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Escorts Kubota Limited intends to invest ₹4,500 crore in a new plant, doubling tractor production to 3.4 lakh units annually, with engine and construction equipment lines. FY25 capex is ₹300 crore. Tractor sales outlook expects mid-single-digit growth.

Escorts Kubota News Today

Escorts Kubota Limited, a prominent farm and construction equipment manufacturer, aims to invest up to ₹4,500 crore in the next three to four years to establish a new manufacturing plant. The decision comes from the company's whole-time director and CFO, Bharat Madan.

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Greenfield Plant Development

The company is currently in negotiations with the Rajasthan government for a suitable site in Ghiloth, where it plans to construct the greenfield plant. This new facility is crucial for doubling the domestic tractor production capacity to 3.4 lakh units annually. Moreover, the expansion includes setting up new engine and construction equipment lines in phases.

Project Costs and Timeline

The greenfield project's estimated cost ranges between ₹4,000 crore to ₹4,500 crore over the next three to four years. The initial phase involves land procurement, expected to cost ₹400 crore to ₹450 crore, with construction slated to commence by the end of the fiscal year.

Current Production Capacities

Presently, Escorts Kubota boasts a total annual tractor production capacity of 1.7 lakh units, with its main plant situated in Faridabad. Additionally, its engine production capacity stands at 1.5 lakh units annually, with Kubota engines being imported.

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Financial Outlook and Industry Projections

The normal capex of around ₹300 crore is anticipated for FY25. Regarding tractor sales outlook, the industry expects mid-single-digit growth, with a potential demand surge in the second half of the fiscal year. The initial quarter may witness a degrowth, with possible recovery post-September contingent on monsoon distribution.


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