VST Tillers — Healthy Q4, FY26 Goal Unchanged, Await Tangible Volume Prints In Tractor Space: ICICI Direct

ICICI Direct Report

VST Tillers Tractors Ltd. reported a healthy performance in Q4 FY23. Net sales for the quarter came in at Rs 323 crore, up 48% YoY amid power tiller sales volume of 12,813 units (up 38% QoQ) and tractor sales volume of 1,963 units (up 25% YoY).

VST Tillers' Ebitda for the quarter came in at Rs 55 crore with corresponding Ebitda margins at 16.9%, up 600 basis points QoQ versus the normalised range of 13-14%. Profit after tax in Q4 FY23 was at Rs 40.2 crore, up 82% YoY.

Key triggers for future price performance:

• With increase in dealership count pan India, healthy farm income and import restrictions in place, we expect power tiller sales volume to grow at a compound annual growth rate of 10% in FY23-25E to 46,279 units in FY25E versus 38,247 units in FY23.

• With focus on higher hp space, sales volume in tractor segment is expected to grow at 20% CAGR over FY23-25E to 9,900 units in FY25E.

• The management reiterated its commitment towards achieving ~Rs 3,000 crore sales by FY26 banking upon its foray in the higher hp tractors, electric tractors, exports and farm mechanisation solutions.

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