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VST Tillers Tractors Annual Report 2023 Summary

1. VST Tillers Tractors Ltd is India’s largest manufacturer of power tillers, operational for 56 years. The company manufactures power tillers, tractors, and other agricultural multi-purpose equipment. We were established under VST Group of Companies, that holds a 53% equity stake.We are at the forefront of providing affordable and reliable SMART farm mechanization solutions to small and marginal farmers.

2. The company has successfully introduced new products with cutting-edge technology and features, solidifying our competitive position in the global market.

3. The Company's revenue hit four digits at Rs. 1,006.43 crore in 2023, for the first time in its history. It has generated an EBITDA of Rs. 152.16 Crores, a Profit Before Tax (PBT) of Rs. 123.94 Crores, and a Profit After Tax (PAT) of Rs. 92.36 Crores. 4. In product units terms the company has achieved significant milestones with a revenue crossing the Rs. 1,000 crore mark for the first time. Sales volumes included 38,247 power tillers, 1,434 reapers, 3,392 power weeders, 1,458 brush cutters, and 6,875 tractors.

5. The company's unwavering commitment to growth and success shines through in its recent accomplishment of Rs 1006 crores in revenue for FY23. This remarkable achievement fuels our confidence as we remain firmly on track to achieve our ambitious goal of reaching Rs 3000 crores of revenue by 2026.

6. Looking ahead, the company is focused on optimizing production capacity, emphasizing both compact and high-horsepower tractors, VST Zetor products, and smart farm machinery to meet increasing market demands.

7. As the company prepares for a projected global population increase, we remain committed to addressing agricultural challenges, prioritizing sustainability and innovative solutions.

8. The company's strategic focus includes the implementation of digital strategies and expansion into advanced markets, with an unwavering commitment to providing growth opportunities for our employees and long-term value for our shareholders.

9. It's operations thrive on three strategically located at Hosur, Malur and Mysore manufacturing facilities that play a vital role in supplying our products and critical components to OEMs and customers worldwide.

10. The Company is in the advanced stages of introducing new high-horsepower tractors to penetrate in the North Indian market. It currently has its presence across 40+ countries in Europe, LATAM, Africa and Asia.

11. At the distribution channel, the Company offers spare parts for tractors, power tiller , other small farm machinery, along with automotive lubricants.

12. We have recently entered the electric pump segment, introducing a diverse range including self-priming pumps, shallow well pumps, centrifugal monobloc pumps, and submersible electric pumps. Our initial launch covers Bihar and UP, with plans to expand to other states in subsequent phases

13. The company believes that investing in R&D and product development is essential to achieving our goals. This year, we have set aside Rs. 50 crores for these initiatives

14. This year, we are venturing into two new countries: the United Kingdom and Mexico. We hold a firm belief in our ability to secure a strong foothold in these markets and capture a significant share of the market

15. The company has set an ambitious goal to expand our dealership network, which currently consists of approximately 1000 dealers. Our goal is to establish an extensive pan India dealership network with a particular focus on strengthening our presence in the North region of the country.

16. We have a Joint venture agreement with Zetor Tractors (a company incorporated under the laws of the Czech Republic) and HTC Investments a.s, (a company incorporated under the laws of the Slovak Republic and holding Company of Zetor Tractors a.s).

17. This exciting collaboration focuses on trading higher horsepower tractors, agricultural equipment, and spare parts.We will use this collaboration to undertake important initiatives, including joint product development, manufacturing tractors at our advanced high horsepower facility, and selling these innovative products in India and global markets. These efforts will be carried out under the "VST-Zetor" brand.

18. As we look ahead to the next 3-4 years, a considerable portion of our business in the higher horsepower tractor segment will be led by the VST-Zetor joint venture.

Our initial product range will be further expanded to include fourwheel drive offerings, opening up opportunities for exports to select segments of the African market. This strategic move positions us for continued growth and success in the tractor industry, catering to a broader clientele with innovative and powerful machinery.

19. Additionally, the company is actively pursuing strategic collaborations with global players to develop electric tractors for both domestic and international markets.

20. We have launched a Digital platform across all plants to integrate Kaizen philosophy effortlessly into our corporate culture. The platform will provide a single source of information related to projects underway, personnel involved, and areas impacted, providing easy accessibility to data under one roof.

21. We aim to develop a product portfolio comprising of complete farm mechanization solutions.In pursuit of this goal, we have ventured into the precision implements segment with the launch of the SHAKTIVATOR series of compact rotary tractors, the STABILATOR range of high horsepower rotary tractors and sprayers.

22. VST planned to focus upon Compact Rotary Tiller & Tractor mounted sprayers range for domestic markets. Also, Front End Loader, Mowers & Compact Rotary Tiller for International Markets.

23. The integration of the Rotavator system directly into most of our compact and small tractors, tailored for vineyards and fruit orchards, exemplifies our commitment to meeting diverse agricultural needs, further empowering farmers to achieve greater productivity and efficiency in their agricultural practices.

24. We launched a special offer allowing up to 100% financing for our advanced brush cutters. Customers can pay just Re 1 as a down payment and settle the balance through flexible monthly instalments over 2 to 12 months.

25. In the tractor segment, we plan to pursue export opportunities in the United Kingdom and Mexico, targeting a 20% growth rate. With 1458 tractors exported in 2023, we emphasize strategic partnerships, innovation, and new product development to expand our global footprint.

26. Despite a relatively flat tractor business this year, the launch of our new products in Q4 has ignited positive prospects for the future. We are anticipating a substantial growth between 10-15%, surpassing the industry guidelines, we remain optimistic about the promising road ahead.



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