On Road Price
India’s largest power tiller manufacturer, reported 60% yoy volume growth in February 2018. It sold a total of 3,478 units in February 2018 against 2,178 units in February 2017.
Volumes for its tractor segment were up 46% yoy for the month. Against 651 tractors in February 2017, VSTTL sold 953 tractors in February 2018. Power tiller volumes were up 65% yoy in February 2018 at 2,525 units vs. 1,527 units in February 2017.
The strong volume growth in tractors (46% yoy) for February 2018 was similar to the one reported by Escorts (up 39% yoy) and M&M’s Farm Equipment Division (up 39% yoy). Tractor sales have been on an upswing due to two consecutive years of healthy monsoons, low penetration of tractors in India (20 tractors per 1,000 hectares against 500 per 1,000 hectares for Japan) and growing use of tractors for non-agriculture use (currently at 20%). India Ratings and Research has forecasted 14-15% growth in tractor sales in FY18. However, it expects growth to moderate in FY19 (number not specified), on a high base.
VSTT manufactures power tillers and tractors and enjoys 59% market share in tillers in India. Its revenue mix comprised of tillers (49%), tractors (39%) and others (12%) in FY17. VSTT’s products target small and marginal farmers accounting for more than 70% of the land holding. VSTT’s launch of 27HP tractor has enriched in portfolio and enhanced realizations. VSTT has recently entered into technology transfer agreement with Kukje Machinery Co., Korea, to manufacture higher 47HP tractors in Phase III.