ICICI Direct’s research report on VST Tillers Tractors
VST Tillers & Tractors (VST) continued to report dismal numbers amid a fall in sales volume and muted EBITDA margin trajectory Power tiller volume in Q3FY19 was at 4,507 units, down 35.6% YoY while tractor volume was at 2,063 units, down 2.3% YoY Net sales in Q3FY19 came in at Rs 146.0 crore, down 11.9% YoY EBITDA for the quarter was at Rs 13.4 crore with consequent operating margins at 9.2%. Margins came in lower tracking higher other expenses amid controlled raw material & employee costs PAT in Q3FY19 came in at Rs 10.1 crore. Higher PAT was supported by higher other income, which came in at Rs 6.6 crore
Outlook
We build in a 310 bps decline in EBITDA margin in FY18-20E. We value VST at Rs 1250 i.e. 15.5x P/E on FY20E EPS of Rs 80.7 and maintain our SELL rating on the stock.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
