Saturday, May 18, 2013

V.S.T.TILLERS TRACTORS LTD - BUY



















  
Ever increasing demand for food and serious shortage of man power in farming sector creating challenges as well as opportunities for various participants.Government schemes like food security bill etc.. are expected to add fuel into fire. Increasing productivity using Scientific farming techniques and mechanization of farming activities are the only solution for this serious issue.VST Tiller and Tractor is one company which will benefit from this  emerging scenario.Company is India’s largest manufacturer of Power Tillers and other farming equipments.This Bangalore based company having four manufacturing facilities to produce Power Tillers,Mini Tractors,Paddy Transplanters and Diesel Engines.VST had technical  collaboration with Mitsubishi Corporation,  Japan .Company developed a good marketing network  with more than 160 dealers across India .Its products are also exported to countries like Middle East, Russia , Turkey , Korea and Thailand.In power tiller segment company commanding a market share of 45% in India.Supported by robust demand ,company recently increased its production capacity.Company having a strong balance sheet with negligible debt .Even during tough times for agriculture sector company showing good performance by all parameters.In FY 2011-12 , VST Tiller reported a Sales of Rs.528 Cr , net profit ofRs.50 Cr and an EPS of Rs.58 /- . Even in a bad year for entire farming related business due to delayed monsoon ,For the nine month December 2012,company reported  a net profit of Rs.33 Cr.VST Tiller is an uninterrupted dividend payer for the past 8 years and declared 90% each in past two years.
                                                             I believe , since there is no alternative for food and the attitude of new generation youth towards farming – mechanization is the only solution to avoid food crisis in future.Hence , the potential  for farming equipments like Tillers,Tractors,Paddy trans planters,Harvesters..etc  are bright.Even the company adopted technology from foreign companies in the initial years ,VST having its own R&D facilities,good brand name and marketing  and servicing network.Considering its strong balance sheet , well experienced promoters and good potential of the industry recommending a BUY for long term investors.Stock is trading near to its 52 week low price @ Rs.340/-


Link to Company website HERE 

Link to latest AR HERE

31 comments :

  1. Dear VP Sir,

    Nice pick sir, I was searching best paying company I Got VST Industries Ltd. L then I saw V.S.T.TILLERS TRACTORS LTD one week back. I'm going to buy from next month V.S.T.TILLERS TRACTORS LTD...Now you suggested its mean its a gem for me.

    ReplyDelete
  2. dear VP
    pls share your view on Polaris,GTL & GTL Infrastructure for long term view i. e. 3+ years
    suggest one pick from sugar sector

    thanks

    ReplyDelete
    Replies
    1. Not very positive on any of the mentioned stocks.

      Delete
  3. well spotted sir. I've already made few bucks in this counter and still holding it but after your recommendation will add few more. Thank you for boosting our confidence on this stock.

    -Mayur

    ReplyDelete
  4. Sir..

    Any opinion on the Infinite results and the counter's behavior... very baffling scenario... Holding it at 20% of my portfolio and now unable to decide if need to book loss or can hold for longterm.. eagerly waiting for your reply :(

    ReplyDelete
    Replies
    1. I am skeptical about Infinite computer.

      Delete
    2. Sir..

      All foreground parameters are looking good. Not sure why you are skeptical on it.. it means you are skeptical on their books?? or your intuition is saying something wrong with it...

      Thanks in advance.

      Delete
  5. Sir
    Out of canfin homes and Repco housing, which is best for investment and can give good return? Thanx

    ReplyDelete
    Replies
    1. Repco may turn as a dark horse from this pack , but bit higher risk compared with Canfin

      Delete
    2. Sir
      Can you pls tell, what is the risk involve in Repco? That will help us a lot before buying. Is Rs200, a good buy? Thanx &Rgds

      Delete
  6. Hello Sir,

    I have been following ur blog and hve started investing in ur value picks.. ur fundamentals are extremely awesome.. i use to go through all your comments, of which i found you saying that cairn is better investment in oil expo industry.. however we could'n see any big movements in the stock for a while.. any specific reason for that??

    ReplyDelete
    Replies
    1. Cairn is better option from this sector but the entire industry may be lacklusture for some more time.

      Delete
  7. Dear sir , can we buy Granules India at CMP ?

    ReplyDelete
  8. Dear Valuepick,

    There is no trading happening in Rossell India for last 2-3 weeks now, is there any concern that you forsee?

    ReplyDelete
    Replies
    1. Not due to any issue related with company ,but this scrip included in PCA

      Delete
  9. Dear sir whats your view on Aptech at CMP in view of the buybacks?

    ReplyDelete
  10. Sir your views on opto circuit?

    ReplyDelete
    Replies
    1. We have already discussed the issues related with Opto and request to avoid for low risk takers.

      Delete
  11. Your view on sun pharma advance co. .. It traded in a range of 60-90 for 3 years and now it is at 150... Most of the mutual funds are holding this stock ... Can it turn out to be a wealth creator if its formula works out ??

    ReplyDelete
    Replies
    1. If the company can successfully commercialise its innovations, it may turn as a multi-multi bagger.A high risk high profit kind stock suitable for an investor who are ready to keep it without any specific time frame.

      Delete
  12. Hi VP,
    Is it good time to buy;
    1. Advanta (712)
    2. Panasia Biotech (98)
    3. Sabero Organics (75)
    4. Sequent Scientific (135)

    Thanks

    ReplyDelete
  13. Even the business prospects of many of these companies are bright ,investors are avoiding low volume stocks only because of the possibility of inclusion in PCA in future .So, liquidity may be an issue .

    ReplyDelete
  14. Hello

    At the outset many thanks for your excellent and insightful blog. One question on VST- do u have any information on their conflict with Mitsubishi and the outcome of it ?

    ReplyDelete
  15. I don't know what is the case of conflict here.Actually they bought technology in the initial years on lump sum payment and not on royalty basis .They have no other obligation to Mitsubishi thereafter ,hence no question arising about conflict or royalty.

    ReplyDelete
  16. Tractor sales are up by 25%+ in May/June over last year. Might augur well for VST as well.

    ReplyDelete
  17. Profits of VST Tillers are up 31% on 16% increase in sales in Q1. Great results - if stock continues on same trend of earnings, it will be at less than 5 times 2013 earnings.

    ROCE is > 25% , Sales growth > 15% , Profit Growth >25% , 0 Debt, and available at 5 times earnings. Definitely will be rerated this year.

    ReplyDelete
  18. V.S.T.TILLERS TRACTORS LTD - of may2013-wow good appreciation

    ReplyDelete

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