VST Tillers surges 9% on inking distributorship agreement with ETGL Africa

In last 16 trading days, the stock of VST Tillers has soared 52 per cent after the company reported strong set of numbers for the quarter ended June 2021

Shares of VST Tillers Tractors rallied 9 per cent to Rs 2,875.65 on the BSE in intra-day trade on Tuesday, in an otherwise weak market, after the company launched the VST range of tractors and power tillers in Southern Africa. Meanwhile, the S&P BSE Sensex was down 0.40 per cent at 58,065 around 10.20 am.

“The company has entered into an agreement with ETG (Export Trading Group), for distribution of its tractors, power tillers, power reapers and diesel engines in the Southern African markets, including South Africa, Namibia, Botswana, Zimbabwe, Swaziland, and Zambia,” VST Tillers Tractors said in a BSE filing.

The company further said the objective behind the distribution model of VST Tillers Tractors in ETGL’s portfolio is to expand its offering in the industry. The launch introduces the complete range of VST’s tractors and power tillers into the Southern African market.

ETGL, a global conglomerate with expertise across various industries, operates an established automotive and farm equipment distribution business in the Southern African region.

VST Tillers is the largest Indian manufacturer of tillers, 4WD compact tractors and amongst the leading producers of the other category tractors, engines, transmission, power reaper and precision components. It has also entered into strategic alliances with Pubert from France for power weeders and zetor from the Czech Republic for tractors.

Since August 16, in the last 16 trading days, the stock of VST Tillers has soared 52 per cent after the company reported a strong set of numbers for the quarter ended June 2021 (Q1FY22). The company’s profit after tax (PAT) rose 40.7 per cent year-on-year (YoY) at Rs 24.01 crore on the back of 32 per cent YoY jump in turnover at Rs 193.60 crore during the quarter. Earnings before interest, taxes, depreciation and amortization (Ebitda) margin increased to 18.11 per cent from 16.47 per cent in the previous year quarter.

"The agriculture and allied sector happens to be the silver lining to the pandemic that the country is grappling with. There is immense room for future growth in the domestic tractor and farm machinery industry market. Further, the government has also consistently prioritised this sector and announced several initiatives for rural development and farm mechanisation, which are likely to contribute to the increase of sales volume of tractors in the long run," VST Tillers said in the financial year 2020-21 annual report.

On the international front, the company plans to expand into newer geographies including Eastern Europe, Africa, Indonesia, and several others. In Europe, the company is growing its brand ‘VST’ through various social media campaigns that increase reach in existing and new markets, it said.