Shares of Escorts surged to 9-month highs. Know why

Shares of Escorts Ltd., a midsized maker of agricultural and construction equipment, surged to 9-month highs after the company's quarterly earnings rose modestly.

Escorts said its first quarter net profit rose 6.3 percent to 36.3 crore rupees compared with 34.1 crore rupees in the same quarter a year ago and 12.7 crore rupees in the sequential quarter in the previous 3 months. Sales during April-June fell 13 percent to 977.7 crore rupees from 1,129 crore rupees in the year ago period.

The company saw lower revenue coming in from its agri machinery and construction equipment divisions. It also reported operating losses in its ancillary products and construction equipment division.

Escorts gained 2.35 rupees, or 1.6 percent, to 153.75 rupees, its highest since November 11th, on the National Stock Exchange, where 29.1 lakh shares were traded by 2:54 pm compared with the 5-day average of 16.4 lakh shares.

Escorts' market capitalisation has gained 34 percent to 1,874 crore rupees over the past one year.

(Image credits: Indiatimes)