Shares of VST Tillers rose 18 per cent to Rs 2,575 in Wednesday’s intra-day trade on the BSE after the company announced it has crossed the production milestone of 500,000 power tillers from its manufacturing plant at Malur – Bengaluru in Karnataka . ,
at 11:07 am; VST Tillers was up 12 per cent at Rs 2,434 as compared to 0.05 per cent rise in the S&P BSE Sensex. With a combined 80,000 shares changing hands on the NSE and BSE, the average trading volume at the counter increased 10 times.
Presently, the total power tiller industry in India is around 60,000 units and is expected to grow to 100,000 units by the year 2025. VST is the leader in the segment and holds a market share of over 65 percent in the country.
VST is focusing on small farm mechanization and has introduced a wide range of smart farm machines for small and marginal farmers. The company has introduced Electric Start Power Tiller in 16 HP and 9 HP range, range of Power Weeder starting from 3.5 HP to 8 HP, range of Brush Cutter, Multi-Crop Reaper, to the segment.
VST Smart Farm machines are suitable for all stages of cultivation and applications like puddle, inter-cultivation, bund construction, tillage and weeding, and can be used for crops like sugarcane, paddy, cotton, vegetables, horticulture most suitable. Turmeric, Ginger etc.
The organization is the largest Indian manufacturer of tillers and 4WD compact tractors, and is one of the leading producers of tractors, engines, transmissions, power reapers and other range of precision components. VST also exports products to European, Asian and African markets.
However, in the last one year, VST Tillers has underperformed the market with a fall of 2 per cent compared to a gain of 0.25 per cent in the S&P BSE Sensex. The stock hit a 52-week high of Rs 2,896 on April 29, 2022.
For the first nine months (April to December) of the current financial year 2022-23 (9MFY23), VST’s business grew 7.6 per cent year-on-year (YoY) to Rs 683.82 crore from Rs 635.50 crore. last financial year. Net profit declined by 28 percent to Rs 55.22 crore. The company’s performance was weak due to a sharp decline in EBITDA margin due to increase in raw material inflation and other operating expenses.
VST Tillers is well positioned to retain its dominant market share in the power tiller market. Increase in market share from new product launches across all brands will increase the addressable market of the company. Also, the company is strengthening its distribution network across the country. The company has technical tie-up with Pubert (France) and Zator (Czech Republic) for product development. VST Tillers has invested in California-based US-based Ximeno Inc., a manufacturer of driverless powered electric tractors under the Monarch brand.
With the increasing demand for small agricultural machines, the company is well positioned to reach its operational targets. With the growing demand for energy-efficient and environment-friendly equipment for the agriculture sector, products such as electric tractors are gaining prominence. To be at the forefront of these changes, the company has invested in Zimeno Inc, b/d/a Monarch Tractor and is also working on other strategic alliances, VST Tillers said in the FY22 annual report.