Shares of VST Tillers Tractors were locked in the 10 percent upper circuit at Rs 2,964.80 on the BSE in Friday’s session after the company announced that it has entered into a master service agreement with Zimeno, Inc, USA. to develop an integrated tractor powertrain for the electric tractor of Zimeno.
The stock was trading at its 52-week high level and surpassed its previous high of Rs 2,898.90 touched on September 7, 2021. It had hit a record high of Rs 3,085 on April 24, 2018.
Till 12:45 pm, a combined 152,000 shares had changed hands and there were pending buy orders for around 34,000 shares on the NSE and BSE combined. In comparison, the S&P BSE Sensex was down 0.89 percent at 58,599 points.
Last month, VST Tillers had launched the VST range of tractors and power tillers in Southern Africa. “The company has agreed 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 had said in a BSE filing.
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.
VST Tillers Tractors is the leading farm mechanization player domestically with a dominant market share in the power tiller segment (54 percent) as of FY21) and a prominent market share in the compact tractor space (10 percent).
Import restriction led to volume growth in the power tiller segment with VST already an on-boarding couple of domestic players for which it intends to do contract manufacturing could drive future price performance. Analysts at ICICI Direct expect the power tiller sales volume of VST Tillers to grow at a CAGR of 19.6 percent in FY21-23E to 39,051 units in FY23E. VST has set an ambitious target to be a Rs 3,000 crore global brand by 2025 in farm mechanization and solutions. Margins are seen in the 12-14 percent range, the brokerage firm said.