Shares of VST Tillers Tractors recovered and rose 3 percent on June 1 after the company released its monthly sales figures. At 12:25 pm, the stock was quoting at Rs 2,828.50, up 1.19 percent, on the BSE.
Total power tiller and tractor sales for May 2023 came in at 3,756 as compared to 3,628 reported in May 2022. Power tiller sales increased to 3,319 from year ago’s 3,037, whereas sale of tractors fell to 437 from 591.
For the overall tractor segment, Nomura had estimated volume to decline by 9 percent YoY in May 2023. It has built in flat volumes for FY24.
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VST Tillers Tractors is the leading farm mechanisation player domestically with a dominant market share in the power tiller segment of around more than 50 percent and prominent market share in the compact tractor space. As per FY23 segment mix, share of Power tiller is at 58.6 percent, tractors at about 27.4 percent, and others at around 14 percent.
The company’s stock has not given any meaningful returns over a five year period -- since May 2018 -- wherein it traded at around Rs 2,870 levels, ICICI Securities pointed out in its research report dated May 15.
The brokerage firm has been positive on this space for quite sometime but with recent gains in stock price, regulated nature of power tiller market, and a hazy pathway to Rs 3,000 crore topline by FY26 amid limited volumes in higher HP tractor space as well as exports, ICICI Securities downgraded its rating on the stock to ‘hold’ from ‘buy’.
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