Millat Tractors Ltd.

Millat Tractors is engaged in the assembly and manufacture of agricultural and industrial tractors, implements and multi-application equipments including diesel generating sets, forklift trucks, prime movers and other related products. Co. is organized into three business units: the Tractor segment, which deals with assembling and manufacturing of agricultural tractors, implements and multi-application products; the Equipment and Parts segment which is engaged in the business of manufacturing of automotive, agricultural and industrial vehicles parts and components; and the Castings segment, which is engaged in manufacturing of castings for tractors and automotive parts.
  • TickerMTL
  • ISINPK0009801017
  • ExchangePakistan Stock Exchange
  • SectorIndustrial Engineering
  • CountryPakistan
Abdul Ghani Mianoor

Pakistan government approves GST reduction on tractors; big catalyst for sales

The government has approved the subsidy on tractors amounting to PKR1.5bn, which was announced in May as part of the PKR50bn Agriculture support package. As a result, the GST on tractors is being reduced from 5% presently to 0% for one year (FY21). The government has also approved a PKR6.8bn subsidy on mark-up on Agri-loans. We expect demand for tractors to rebound strongly due to the reduction in GST and other measures to support farmer income. Measures of the Agriculture Package similar to ...

Abdul Ghani Mianoor

Pakistan Autos: Q4 20 preview – Depressed sales to drag profits sharply lower

For April-June 2020 results, we expect our Auto Universe to post combined NLAT of PKR683mn, down from a profit of PKR3,154mn last year, due largely to lockdown conditions until May and sluggish sales thereafter. Volumes during 4Q were down by a sharp 57% qoq. Key highlights for the quarter were: (i) 58% qoq average decline in sales because of lockdown conditions, (ii) PKR depreciation of c.5% qoq, and (iii) price hikes late in the quarter. The OEMs have rallied 45% on average in the past thre...

Muhammad Saad Ali

Pakistan's KSE-100 in May: Muted performance despite positive triggers

The KSE-100 was flat in May 2020 (down 0.5% mom), taking CY20td decline to 17%. There were some positive triggers, including the partial lifting of lockdown conditions by the government and the SBP cutting the policy rate further by 100bps to 8%. However, both failed to lift market sentiment. Market activity fell 9% mom to c.US$46mn average daily traded value. FIPI outflow (US$40mn in May) continued for the fourth consecutive month since the onset of Covid-19 pandemic. International oil price...

Abdul Ghani Mianoor

Millat Tractors: Upgrade to Buy on promising growth prospects

We have a Buy stance on MTL with a June 2021 TP of PKR902/sh. The government’s Agriculture package promises to lift the income of farmers and make tractors relatively more affordable for them. This drives our estimate of a 3-year sales/EPS CAGR of 18%/20% for MTL. The key catalyst for tractor sales is the reduction of GST to 0% (previously 5%). The last time GST was last reduced in FY 17, overall tractor sales grew by c50% per year during FY 17/18. However, this new cut will likely be in plac...

Abdul Ghani Mianoor ...
  • Rahul Hans

Pakistan government approves support package for agriculture

The ECC has approved a PKR50bn package for the agriculture sector. This was included in the PKR100bn earmarked for SMEs and agriculture sector out of the PKR1.2tn relief package to counter the Covid-19 outbreak. Salient features of the package are given below. Impact on fertilizer: Positive for demand As mentioned in our recent report, we expected the government to announce a subsidy on fertilizers, which underpinned our Urea off-take assumption for CY 20 of 5.7mn tons (same as previous 5yr a...

1 director bought

A director at Millat Tractors bought 10,700 shares at 869.055PKR and the significance rating of the trade was 56/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. The names of b...

Abdul Ghani Mianoor

Pakistan government approves GST reduction on tractors; big catalyst for sales

The government has approved the subsidy on tractors amounting to PKR1.5bn, which was announced in May as part of the PKR50bn Agriculture support package. As a result, the GST on tractors is being reduced from 5% presently to 0% for one year (FY21). The government has also approved a PKR6.8bn subsidy on mark-up on Agri-loans. We expect demand for tractors to rebound strongly due to the reduction in GST and other measures to support farmer income. Measures of the Agriculture Package similar to ...

Abdul Ghani Mianoor

Pakistan Autos: Q4 20 preview – Depressed sales to drag profits sharply lower

For April-June 2020 results, we expect our Auto Universe to post combined NLAT of PKR683mn, down from a profit of PKR3,154mn last year, due largely to lockdown conditions until May and sluggish sales thereafter. Volumes during 4Q were down by a sharp 57% qoq. Key highlights for the quarter were: (i) 58% qoq average decline in sales because of lockdown conditions, (ii) PKR depreciation of c.5% qoq, and (iii) price hikes late in the quarter. The OEMs have rallied 45% on average in the past thre...

Abdul Ghani Mianoor

Millat Tractors: Upgrade to Buy on promising growth prospects

We have a Buy stance on MTL with a June 2021 TP of PKR902/sh. The government’s Agriculture package promises to lift the income of farmers and make tractors relatively more affordable for them. This drives our estimate of a 3-year sales/EPS CAGR of 18%/20% for MTL. The key catalyst for tractor sales is the reduction of GST to 0% (previously 5%). The last time GST was last reduced in FY 17, overall tractor sales grew by c50% per year during FY 17/18. However, this new cut will likely be in plac...

Abdul Ghani Mianoor ...
  • Rahul Hans

Pakistan government approves support package for agriculture

The ECC has approved a PKR50bn package for the agriculture sector. This was included in the PKR100bn earmarked for SMEs and agriculture sector out of the PKR1.2tn relief package to counter the Covid-19 outbreak. Salient features of the package are given below. Impact on fertilizer: Positive for demand As mentioned in our recent report, we expected the government to announce a subsidy on fertilizers, which underpinned our Urea off-take assumption for CY 20 of 5.7mn tons (same as previous 5yr a...

Abdul Ghani Mianoor

Pakistan Autos: Negligible sales in April due to country-wide lockdown

Pakistan's auto industry sold only 39 units in April 2020, which comprised trucks and buses only. There was no passenger car sales, primarily because of the country-wide lockdown (started 24 March) which resulted in the OEMs shutting down their plants and dealerships being closed. The tractor segment recorded sales of 2,035 units, down 30% mom and 63% yoy. Sales for AGTL saw a 19% mom increase, while those of MTL declined 51% mom. This brings the 10M FY 20 industry sales to 25,534 units (down...

Muhammad Saad Ali

Pakistan's KSE-100 in May: Muted performance despite positive triggers

The KSE-100 was flat in May 2020 (down 0.5% mom), taking CY20td decline to 17%. There were some positive triggers, including the partial lifting of lockdown conditions by the government and the SBP cutting the policy rate further by 100bps to 8%. However, both failed to lift market sentiment. Market activity fell 9% mom to c.US$46mn average daily traded value. FIPI outflow (US$40mn in May) continued for the fourth consecutive month since the onset of Covid-19 pandemic. International oil price...

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