This article first appeared on GuruFocus .
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Revenue:INR 313.4 crores, an 11% increase from INR 282.4 crores in the same quarter last year.
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Operational EBITDA:INR 40.3 crores, with a margin of 12.85%, down 45 basis points from 13.3% in the prior-year quarter.
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Profit After Tax (PAT):INR 48.7 crores, up from INR 44.6 crores in the same period last year.
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Power Tiller Volume:Grew approximately 18% year-over-year.
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Domestic Tractor Volume:Grew 4.5% year-over-year, with 275 tractors sold in the quarter.
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Power Weeder Volume:Recorded impressive growth of 56% year-over-year.
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Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Power tiller business grew 18% in volume during Q1 FY27.
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Domestic tractor sales increased 4.5% year-over-year.
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Power weeder segment recorded an impressive 56% growth.
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Revenue grew 11% to INR313.4 crores from INR282.4 crores in the same quarter last year.
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Bajaj Finance retail financing for tractors nearly doubled to around 1,000 units in Q1.
Negative Points
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Operational EBITDA margin declined by 45 basis points to 12.85% due to raw material cost inflation.
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Uneven monsoon and below-normal rainfall outlook pose risks to agricultural demand.
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Tractor production ramp-up was slower than expected, limiting Q1 sales to 275 units.
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July volumes declined year-on-year due to a high base, especially in tillers.
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US market expansion plans are uncertain due to potential tariffs and geopolitical tensions.
Q & A Highlights
Q: What is the broad outlook for FY27, considering the current monsoon situation? A: Antony Cherukara, CEO, stated that while the monsoon has been normal so far with sowing levels similar to last year, the next 15-20 days are critical for standing crops and will determine kharif production and water table levels for the rabi crop. He noted that the outlook is positive until September, but it is too early to give a full FY27 outlook, as a more accurate assessment can be made in another month's time.
Q: Can you provide an update on the tractor business, given the Zetor tie-up and the launch of new products? A: Antony Cherukara, CEO, explained that while new variants have been launched, production ramp-up is still in progress, which limited Q1 supply. He expects Q2 to show growth and Q3/Q4 to see substantial volume increases. He acknowledged the 40-50 HP segment is crowded and competitive but affirmed the company is in for the long haul, planning many more variants in the next 12-18 months.
Q: What is the strategy to increase tractor sales and compete with larger players, especially with the launch of the Phantom series? A: Antony Cherukara, CEO, outlined a consistent strategy of increasing coverage, expanding into northern markets, and launching over 30 tractor variants in the next three years. He reiterated the target of reaching 15,000-20,000 tractor sales by FY30. The Phantom series is being launched state-by-state, starting with Gujarat and Maharashtra, and the VZ tractor production is being ramped up to contribute to volumes.
Q: How is the financing partnership with Bajaj Finance performing, and are there plans for additional partnerships? A: Antony Cherukara, CEO, reported that the Bajaj Finance partnership is doing well, with retail financing volumes nearly doubling to around 960-1,000 tractors in Q1, up from about 400 in the same period last year. While this represents about 8-9% of retail, the goal is to grow it to 15-20% this year. The company already has partnerships with Chola, TVS, and nationalized banks and will consider regional financial support as needed.
Q: Are there any plans to expand tiller exports, and what is the strategy for international markets? A: Antony Cherukara, CEO, stated that tiller exports are currently small (around 300 units last year), but there is a good opportunity for a reconfigured tiller in the European market. The company is developing a new geared tiller with differential features and also exploring electric tillers and weeders for international markets. In Africa, they have seeded 75 horsepower tractors and see it as a future growth market for higher horsepower tractors.
Q: Can you address the decline in July volumes year-on-year and any moderation in demand? A: Antony Cherukara, CEO, attributed the July decline to a very large base from the previous year, especially in tiller volumes. He reiterated that there is no demand issue in tillers and expects growth to continue at least until September. The key factors will be the next 20 days of rainfall for crop survival and the remaining monsoon for the rabi crop. He expects tiller volume growth of 16-20% and power weeder growth of 50-60% to continue.
Q: What is the capital allocation policy, and is there any update on the sale of non-core assets? A: Antony Cherukara, CEO, stated the policy is to maximize shareholder value, and the company is exploring several strategic opportunities for deploying capital, with expectations of good deployment in the next 18-24 months. Regarding non-core assets, there is no development as of now. The company has already moved all manufacturing outside Bangalore, and the 19-acre land in Bangalore is only used for administrative offices, with no immediate plans for monetization.
Q: What are the implications of upcoming emission norms (TREM 3A and TREM 5) on the company's products and costs? A: Antony Cherukara, CEO, confirmed that VST is fully prepared for the first stage of emission norms from October 2026 (Stage 5 for products less than 25 HP) and for TREM 3AA from April 2028. The major cost implications will come in 2032 when all tractors move to Stage 5, requiring DOC and DPF technology, which could increase costs by 25-30%. However, he noted that technology costs typically decrease over time as volumes climb globally.
Q: What is the roadmap to achieve the target revenue of INR2,500-3,000 crores? A: Antony Cherukara, CEO, reaffirmed the vision of achieving INR3,000 crores by 2030. He outlined that all five business verticals have growth strategies being implemented, with scaling up of R&D, capacity, and people. The company will also need to invest in a new production facility in the next two years to support this growth.
Q: What is the current status of dealership expansion and counter expansion strategy? A: Antony Cherukara, CEO, stated that the company added 40-50 dealers last year and is targeting 50-60 more this year, with a key focus on North India. In the SFM space, they have opened more than 500 counters in the last three months, on top of the existing 750-800 dealers, with a goal to expand to about 2,000 counters by the end of the year.
Q: Can you provide a three-year view on exports, considering the current geopolitical uncertainties and FTAs? A: Antony Cherukara, CEO, acknowledged the difficulty in predicting due to uncertainties like potential US tariffs. However, he expressed confidence in continued growth in the European market, with expansion into Turkey and the Nordics with hydrostatic transmission products. He sees Africa as a huge opportunity, having launched 50 and 75 horsepower tractors there. The US expansion plan is currently unclear due to the lack of emphasis on environmental initiatives.
Q: What is the company's position in the European tractor market, and what is the growth potential? A: Antony Cherukara, CEO, stated that VST sells about 1,400-1,500 tractors in Europe, which is decent for its segment (0-30 HP). The largest Indian player in this segment sells around 9
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
