Escorts Kubota reported a sharp rise in contractual manpower costs during Q2 FY27, with wages in its home state of Haryana climbing 35% from 1 April 2026, even as the tractor and construction equipment maker posted a 20.6% year-on-year drop in net profit to ₹255 crore.
Chief Financial Officer Bharat Madan confirmed the wage pressure on the company’s post-earnings analyst call. “In Haryana, this manpower cost has gone up by 35% from 1st of April,” Madan said during the earnings call.
The wage increase, he added, is “not just commodity” but also includes “manpower cost increase” that has moved into other expense lines, along with process and conversion costs. He said the higher contractual manpower costs were already visible in Q1 FY27 as well.
Operating revenue for Q2 FY27 rose 16.3% to ₹3,231.4 crore, but EBITDA margin narrowed to 9.9% from 13.1% a year earlier. Other expenses jumped 22% year-on-year and 14% sequentially, driven partly by high festive-season production where sales ran 20% to 25% below production, pulling manpower and manufacturing costs into other expense buckets.
The wage increases are not limited to Haryana. In vendor-concentrated Uttar Pradesh, contract wages have risen 22% to 23%, Madan said earlier in the year, levels he described as “unlikely to reverse”.
Earlier in the year, during the Q1 FY27 call, Escorts Kubota had flagged that about one percentage point of a 5% input cost increase came from higher minimum wages for contract labour in Haryana, a burden the company said is specific to it rather than industry-wide.
Consolidated H1 FY27 revenue from continuing operations rose 21.9% to ₹6,450.96 crore, while segment profit from construction equipment expanded sharply, aided by operating leverage and price hikes.
