Escorts has been an underperformer in a strong market. It has fallen 9.5 percent in the last one month as compared to Nifty's gains of 7.5 percent.
Till November 12, the stock had gained 134 percent YTD.
The delivery volume is on the higher side. 25 percent was the average delivery volume between November 12 and December 29 and it was at a peak of 50 percent on December 17.
At the technical levels, the stock is trading between 50 and 100-day moving average (DMA).
So, why has the stock underperformed Nifty?
FY21 is expected to be the peak of the volume of sales for tractors and FY22 is expected to be flat. So investors are shifting from tractor manufacturers to car, two-wheeler and commercial vehicle (CV) manufacturers given the fact that two-wheeler, car and CV sales have been down in the last two years and FY22 is expected to be strong.
Large institutional investors and HNIs are selling in the counter and Emkay expects December sales to be 5,000 units, up about 22 percent YoY but down 51 percent MoM.
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