**VST Tillers** - Q1 FY21 (Unaudited – standalone)
CMP: 1,495
Revenue from operations 146.2 Crs
139.7 Cr (5.01%) YoY | 119.8 Cr (22.68%) QoQ
Year ending revenue: 543.7 Cr Vs. 585 Cr (-7.19%)
Net Profit of 17.07 Cr
11.55 Cr (47.11%) YoY (3.38) Cr (602.13%) QoQ
Year ending Net profit: 18 Cr Vs. 46 Cr (-60.84%)
EPS (in Rs.) 19.76
13.37 YoY | (3.91) QoQ
Year ending EPS: 20.83 Vs. 53.32
View: Result is overall good and strong. YoY revenue marginally up but profit up with good margin . EBITDA and margin also improved and EPS also got strong.
**Business Updates & Highlights**:
EBITDA in Q1FY21 was around INR 16.33 Cr Vs. 14.33 Cr in Q1FY20 therefore up by 13.9% in YoY. EBITDA margin in Q1FY21 was around 11.1% Vs. 10.2% in YoY.
**Financial**
ROE and ROCE is around 8% and 13% respectively and book value per share is around INR 668 and share is currently trading at 2.3x of its book value. Company is currently trading at annualized PE of around 25 which fair as per Industry benchmark. Promoter holding in the company is around 54.8% which is strong and stable. FIIs and mutual fund hold around 4.6% and 15.5% respectively.
Position: Share strong support price is INR 1,490. Long term investor should continue with the company and any correction will give good opportunity to enter.
**Share View**: Share price high 1,552 (52 week) and now 1,495. VST Tillers Tractors Ltd. was promoted by VST Motors as a joint venture with Mitsubishi Heavy Industries Ltd, Japan. The current shareholding of the Indian promoters in VST is 51.06% while Mitsubishi’s stake is 2.93%. The company is now the largest manufacturer of Power Tillers in India.
**Opportunities**
Strong quarterly performance and benefitting the rural economy govt focus towards agriculture sector growth. With eye on global opportunity, the company has expanded its presence in more than 20 countries over a decade and established itself as a most preferred brand for the compact tractors. VST SHAKTI is India's No 1 brand in Power Tiller (walking Tractor) in India introduced over five decades ago. A pioneer in compact four - wheel drive tractors initially introduced as "VST Mitsubishi", has now expanded its presence under the brand "VST SHAKTI" with range of compact and agricultural Tractors. Consistently maintained ROE for past several year and average ROE was around 20%. With small equity base, Zero debt and strong promoter holding and highly follow corporate governance model. July business update was good. Mom tiller 2880 Vs. 3040 and tractor 719 Vs. 850. Govt has also put curbs on imports of power tillers and it's components from china this will also benefitted to pricing power of VST.
**Risk**
Topline growth is subdued for past several years. Subdued demand in key markets for Q2 as well due to Covid-19 pandemic spread. Last year Long-term rating downgraded to AA- by ICRA. Top management changed in last year CEO, CFO resigned.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.