Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
VST Tillers Tractors Ltd (BOM:531266) reported a 63% growth in their Power Beater business and a 22% growth in the Power Reaper business.
-
The precision component division, focusing on external business, grew by 71% in its first year.
-
Domestic tractor sales saw a significant increase, with new products under the Power Series driving a 180% sales jump.
-
The company expanded its geographical reach, entering new markets such as Cyprus, Czech Republic, Russia, Angola, Turkey, and Mali.
-
The distribution business improved significantly, with a 56% increase in distribution capability.
Negative Points
-
International trade uncertainties, particularly in logistics, continue to pose challenges, affecting availability, costs, and timely dispatches.
-
The European market faced demand challenges in Q4, impacting international business performance.
-
Tractor exports saw a decline due to lower demand in the European market, with a shortfall in Q4 resulting in a drop from 16,180 to 1,411 tractors year-over-year.
-
Operational EBITA showed a decline, with a percentage drop from 12.83% to 11.17%, attributed to increased expenses in R&D and product development.
-
The company faces ongoing geopolitical challenges, affecting logistics and inventory rotation in the European market.
Q & A Highlights
Q: How is VST Tillers Tractors Ltd expanding in the northern market, particularly for tillers? A: Unidentified_2, CEO: We are experiencing significant growth in the northern market, referred to as the one VST market, where all products are sold under one dealer. In FY 24, we sold about 200 power tillers, and in the last year, this number increased to 900. We are seeing positive responses and expect continued growth in this region.
Q: What is the impact of US tariffs on VST Tillers Tractors' exports, particularly for Monarch tractors? A: Unidentified_2, CEO: There is a tariff effect, but Monarch imports from India, China, and Mexico, with more impact from China and Mexico. Negotiations are ongoing, and while we don't expect business in Q1, we are hopeful for resolution in the near future.
Q: Can you provide an update on the VST Zetor brand's performance and future expectations? A: Unidentified_2, CEO: In FY 25, we focused on seeding VST Zetor tractors in various markets. We received positive feedback and are working on upgrades to meet customer expectations. We aim to launch these upgrades in H2 and maintain our sales targets.