Multibagger Alert: Escorts Kubota Shares Soar 561%, Emkay Upgrades Rating – 3 Reasons Why Analysts Are Bullish on This Auto Ancillary Stock

Escorts Kubota has given impressive returns over the past five years, with its share price rising by over 561%, making it a multibagger stock. Recently, Emkay Global Financial Services upgraded its rating for this auto ancillary stock from ‘Add’ to ‘Buy’ and set a target price of ₹4,700.

Stock Performance and Technical Analysis

Despite its long-term gains, Escorts Kubota’s share price has faced some pressure recently. It has increased by only 15.89% over the past year and has underperformed its sector by 46.83%, according to data from Trendlyne. Rajesh Bhosale, an analyst at Angel One, pointed out that the stock has corrected from its September high of ₹4,420 and is currently hovering around its key support level at ₹3,900. If it holds this level, there could be a bounce back toward ₹4,200, but a drop below could push it down to ₹3,700.

On Monday, the stock opened at ₹3,936.70 on the BSE, reached a high of ₹3,995, and a low of ₹3,897.

Why Emkay Global is Bullish on Escorts Kubota

Emkay Global highlights three main reasons for upgrading the stock:

1. Tractor Upcycle Expected in H2 Due to Good Monsoons
   The recent monsoon season saw 8% more rainfall than the long period average (LPA), which has helped increase Kharif crop acreage, the highest in four years. This, along with improved reservoir levels, sets the stage for a strong agricultural recovery in the second half of FY25. The brokerage also expects double-digit growth in the December to March period, with a positive outlook for the next two crop cycles. Escorts is well-positioned to benefit from strong rainfall in key regions and new product and channel development efforts.
   
2. Big Opportunity in Global Sourcing for Escorts and Kubota
   Kubota plans to increase its global sourcing from India to 15-20% by 2030, from the current 9%. Escorts could gain around USD 500 million if it manages to capture even 5% of Kubota’s global sourcing needs. This presents a huge growth opportunity for the company.
   
3. Initiatives to Boost Exports
   Escorts is taking several steps to tap into the export market. These include launching export-specific products for Europe in Q3FY25, starting direct part supplies to Kubota’s global network, expanding dealer channels with Kubota, and building a new greenfield plant to support future growth. The new plant, which will produce tractors, engines, and implements, is expected to cost ₹45 billion in phases.

These reasons show why Emkay is optimistic about the future growth of Escorts Kubota and sees it as a strong investment opportunity.