VST Tillers sees Rs 1,000 revenue from this investment

Mumbai: VST Tillers Tractors, the country's largest power tillers company that meets almost two-thirds of the year, expects to close this budget with a record high of Rs 1,000 crore in better sales of its cash-cow tillers and rising demand for its compact tractors. The Bengaluru-based company, which is part of the VST Group, has shut down the epidemic FY21 with a revenue of Rs 764.24 crore (so far the highest Rs 677.7 crore in FY17), from Rs 543.7 crore in FY19.

This was achieved as the closure did not affect the agricultural sector as much as the industry and in the aftermath of the excellent weather.

"Our main power tiller and small tractor business, which is booming now, should make us grow by 30 percent last year when we close with Rs 764 million," said Antony Cherukara, chief executive officer of VST Tillers Tractors. , told PTI.

The company will be impacting the Rs 1,000-crore revenue mark this financial year after a 30 percent increase in tillers, he added.

VST, promoted by VST Motors as a joint venture with Japan's Mitsubishi Heavy Industries, has been producing and selling its flagship VST Shakti for the past 50 years.

It uses two plants - Malur and Hosur near Bengaluru, and a unit of precision parts in Mysuru. The farm products list includes power tillers (VST Shakti, and VST Mitsubishi and VST Shakti tractors), rice weeders, rowers harvesters, rotary tillers, power weed, brush cutters, and fence cutters.

While the company was booking the last Rs 105 crore of revenue, Cherukara did not provide a profit forecast for this year.

He said the company expected the demand for a tractor to grow beyond the growth of the industry, which had low numbers, adding that it was looking to recover in the past two months which had not been sold much due to heavy rains in some areas. year.

From a quarterly perspective, the last two months have been very low for two reasons - floods in the southern provinces and the impact of a higher MSP that could translate into farmers' incomes.

"But our power tiller business is still growing at this time. It has grown even last month, albeit small. We feel we are moving forward, as dams are full and cash flow is expected to improve and reach the hands of farmers, this should result in higher tractor growth," he said. Cherukara.

Although power tillers earn more than 55 percent of their revenue, the accounts of the tractors and the remaining parts work on some.

High inflation expectations are also based on the recently announced 4-5 percent inflation rate to reduce commodity inflation by more than 8 percent, adding that the remaining cash is deducted by better cost management to protect margins that are usually average 15 percent.

It has an annual capacity of 60,000 power tillers (compared to the industry demand of about 50,000 units per year) after an increase in capacity of Rs 250-crore two years ago. Tractors, whose annual capacity is 40,000 units.

Although VST is the undisputed leader in the power tillers category with 63 percent of the market, when it comes to tractors it is only 10 percent for compact tractors. The company still has to make a mark with the 45- and 49-HP high-power tractors, which came in just two years ago.

The company plans to double its export revenue from 5-6% now to 10 percent over the next three to four years, as it sees a huge market opportunity for its compact tractors in Europe, Cherukara said.

Its exports to Europe are growing at more than 200 percent, already from the lowlands, and this year it will export more than 1,000 tractors, sold as Fieldtrac, France, Germany, Spain, Portugal, Belgium, and the Netherlands.

Since last year, the company has also shipped t-shirts to these markets but the numbers are very small, he added.