VST Tillers up 9% after signing distribution agreement with ETGL Africa

Shares of VST Tillers Tractors rose 9 per cent to Rs 2,875.65 on the BSE during intra-day trading on Tuesday in a generally weak market after the company launched its VST range of tractors and power tillers in South Africa. Meanwhile, the S&P BSE Sensex index fell 0.40 per cent to 58,065 around 10.20am.

"The company has entered into an agreement with ETG (Export Trading Group) to distribute its tractors, power tillers, mechanical harvesters and diesel engines in South African markets including South Africa, Namibia, Botswana, Zimbabwe, Swaziland and Zambia." ," Exness Indonesia said in a statement.

The company also said that the distribution model of VST Tillers in the ETGL portfolio aims to expand its offerings in the industry. The launch introduces VST's full range of tractors and power tillers to the South African market.

ETGL, a global conglomerate with expertise in various industries, operates a mature automotive and agricultural equipment distribution business in the South African region.

VST Tillers is India's largest manufacturer of power tillers, four-wheel mini tractors and one of the leading manufacturers of tractors, engines, transmissions, harvesters and precision components in other categories. It has also entered into strategic alliances with Pubert of France for weeding machines and Zetor of the Czech Republic for tractors.

Since 16 August, VST Tillers shares have risen 52% in the last 16 trading days after the company reported strong results for the quarter ended June 2021 (first quarter of FY22). The company's profit after tax (PAT) rose 40.7% year-on-year (y/y) to Rs 24.01 crore on the back of 32% y/y growth in turnover at Rs 193.60 crore for the quarter. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin increased to 18.11% from 16.47% in the previous quarter.

"Agriculture and allied sector is the silver lining to the pandemic the country is battling. There is huge scope for future growth in the domestic tractor and agricultural machinery market. In addition, the government has also consistently prioritised the sector and has announced several rural development and farm mechanisation initiatives that are likely to boost tractor sales in the long term," VST Tillers said in its annual report for the financial year 2020-21.

Internationally, the company plans to enter new regions including Eastern Europe, Africa, Indonesia and several others. In Europe, the company is developing its VST brand through various social media campaigns that are increasing its reach in existing and new markets.