Hold VST Tillers Tractors; target of Rs 1300: ICICI Direct

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ICICI Direct's research report on VST Tillers Tractors

VST Tillers & Tractors (VST) reported a dismal Q4FY20 performance. The company reported negative EBITDA margin to the tune of 5.4% with consequent loss of Rs 3.4 crore at the PAT level in Q4FY20. Power tiller sales volume in Q4FY20 was at 4917 units, down 32% YoY while tractor sales volume was at 1470 units, down 31% YoY. Sales in value terms for Q4FY20 came in at Rs 120 crore, down 33% YoY. For full year FY20, net sales were at Rs 544 crore with EBITDA at Rs 17.3 crore and PAT at Rs 18 crore (EPS Rs 20.8).

Outlook

We maintain HOLD rating on VST with a target price of Rs 1300/share i.e. 18x P/E on FY22E EPS of Rs 72.2. VST stays a net cash positive company.

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