VST Tillers Tractors - Company Update - ICICI Securities

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).

Valuation & Outlook

VST's stock witnessed a sharp up move (>2x) from early April 2020 lows with key positives on China dependency shift and regaining of higher margin trajectory and now trades at ~19x P/E on FY22E numbers with RoCE at 12%. The present valuations leave little room for upgrade. We will wait for the company to execute these positives before any meaningful change in our stance. 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.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_VSTTillers_CoUpdate_Jun20.pdf

Shares of V.S.T.TILLERS TRACTORS LTD. was last trading in BSE at Rs.1329.75 as compared to the previous close of Rs. 1359.25. The total number of shares traded during the day was 1930 in over 180 trades.

The stock hit an intraday high of Rs. 1372.5 and intraday low of 1328.05. The net turnover during the day was Rs. 2610560.

Source : Equity Bulls

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