VST Tillers & Tractors Plans To Launch Zetor Tractor Range In This Quarter

VST Tiller & Tractors Ltd. recently announced its Q3 FY2023 earnings on a conference call. Mr. Pankaj Khemka, Chief Financial Officer, and Mr. Antony Cherukara, Chief Executive Officer, of VST Tillers & Tractor, participated in the conference call meeting.

Mr. Pankaj Khemka started the meeting with opening remarks on the third quarter, "To begin with, the income from operations for the quarter ended quarter three of 22 is INR213.69 crores, compared to INR208.44 crores for the same quarter the previous year. EBITDA as a percentage is 14.56%, compared to 16.62% in the same quarter last year. PAT for the quarter is INR19.43 crores, compared to INR21.05 crores in the same quarter last year."

He continued saying, "In terms of volume for various businesses, power tiller registered a volume of 7,456 numbers for the quarter, while tractor volumes were 1,537 numbers. And the turnover for each business is as follows: the small farm mechanization business has a turnover of INR121.58 crores for the quarter; the tractor business has a turnover of INR61.42 crores; and the spares division has a turnover of INR22.8 crores."

Following that, Mr. Antony Cherukara stated that the company will launch its premium range of tractors under the Zetor brand by the end of this quarter, a move that will not only help the company become a pan-India tractor player but will also increase tractor volumes and revenue.

To strengthen its position in the higher markets, both in India and abroad, the company partnered with the Czech Republic, company Zetor Tractor. By the end of this quarter, the company plans to launch its Zetor brand of higher-horsepower tractors.

"As a result of this, the share of high HP in our tractor volumes is expected to reach 20% in FY24 and 30-40% in the following years," said Antony Cherukara, CEO of VST Tillers & Tractors, during the company's Q3 FY23 earnings call.

It will sell value-for-money tractors under the VST brand and premium products under the Zetor brand in the higher HP tractor segment. It has already built capacity for higher horsepower tractors, and its total tractor capacity is approximately 40,000 units per year. The business will expand its network in the northern region, which is a strong market for higher HP tractors, to support the expansion of premium tractors.

As per the officials, the company has a robust network of 650 dealers in the western, southern, and eastern regions for small farm equipment. Nonetheless, it has a network of roughly 350 dealerships for tractors that are dispersed throughout the southeast and west.

Currently, the distribution networks have about 350 dealerships, predominantly in the South, East, and West. VST only have around 30 tractor dealerships in North, but they'll be adding more this quarter and moving on with the debut of VST Zetor.

To support its future growth goals, which include achieving revenue of 3,000 crores by FY26, transitioning from power-tiller-centric operations to a strong small farm mechanization company, and further strengthening its position in the compact tractor segment, among others, the $854 billion company will also double its current annual R&D capex of 40 to 50 crore to 100 crores in the coming years. With a market share of 58% in the domestic power tiller market, the firm holds a commanding position.

The partnership with Zetor is anticipated to boost the company's exports even more because it will focus on higher HP markets like Africa and Latin America.

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