Company overview
Millat Tractors Limited (MTL) - a leading engineering concern in the domestic automobile sector that started its operations in 1964 as Rana Tractors and Equipment Limited. In 1972, the company subsequently changed its name to Millat Tractors Limited (MTL) at the time of its take-over. The company is listed on all the three stock exchanges of the country. Millat Tractors is engaged in assembly and manufacture of agricultural tractors and equipments with the principal activity including distribution of “Massey Ferguson” tractors imported from UK in completely knock-down (CKD)/semi knock-down (SKD) condition. The company has achieved a deletion level of more than 90% with the successful implementation of a comprehensive plan on the back of installation of appropriate in-house manufacturing facilities and development of more than 200 vending associates.
Millat Group
The company owns 64.1% stake in its subsidiary company Millat Industrial Product. Besides investment in its subsidiary, the company also holds investments in associated companies. The company owns Bolan Castings Limited (46.26%), Millat Equipment Limited (45%) and Agrimall Pvt Limited (20%). In addition, the corporate structure of the company has changed into a group of four companies namely ‘Millat Group’, and is responsible to ensure professional management - supporting all group companies.
A significant market player
Domestically, during the FY08, Millat Tractors Limited was the market leader with 51% share versus 50% share held in CY07. Despite declining trend in tractor industry (4% drop), the company managed to increase its volumetric sales by 1% at 27,296 units. However, during 5MFY09 period (July-Nov 2008), Millat’s market share dropped by 470bps to 44.8% in comparison to 49.5% market share during the last year’s corresponding period. Unit sales of the company during 5MFY09 also declined by 9% to 9,075 units whereas, industry’s volumetric sales remained at par of pervious year’s period. Besides local sales, the company also exports tractors and agriculture implements. During FY08, the company’s exports were recorded at PRs153mn as compare to PRs48mn exported in CY07.
Accolades
Since 1979, the company has been a recipient of Corporate Excellence Awards of Management Association of Pakistan, Top 25 Companies Award of Karachi Stock Exchange, Best Corporate Report Award of ICAP and ICMAP, Best MF distributor award by Massey Fergusson (MF), England and Highest Achievement of indigenization by Pakistan Association of Automotive Parts & Accessories Manufacturers.
Products
The company offers wide range of tractors, industrial products including diesel generating sets, prime movers and forklift trucks and also an array of agricultural implements. The company has five different tractor variants ranging from 50HP to 85HP meeting all agro-climatic conditions, size of farms and buying capacity of various segment of farmers. The product line in agricultural implements includes chisel, disc & mould board plough, tine tillers, offset disc harrow, ridger, front blade, multi-purpose rear blade, agricultural loader, farm trailer, hydraulic tipping trailer, jib crane, post hole digger, lawn mover, and pneumatic pruning set etc.
Financial performance
During FY08, the company posted 27% higher PAT at PRs810mn as against PRs637mn in FY07. Whereas, sales revenue increased by 2% primarily on account of 0.6% higher units sold. Despite higher cost of production amid of soaring steel and fuel prices, gross margins swelled by 288bps to 13%, thus, gross profit grew by 30% at PRs1,473mn. However, in 1QFY09, sales revenue registered healthy growth of 25% at PRs2,873mn whereas, volumetric sales increased by mere 2% at 5,840 tractors. Although the company passed-on the impact of increasing production cost during 1QFY09, gross margins squeezed by 240bps to 10%. The company’s bottom-line increased by 5% at PRs151mn in 1QFY09 as against PRs144mn in the corresponding period of last year.
Research First Capital Equities Ltd
Millat Tractors Limited (MTL) - a leading engineering concern in the domestic automobile sector that started its operations in 1964 as Rana Tractors and Equipment Limited. In 1972, the company subsequently changed its name to Millat Tractors Limited (MTL) at the time of its take-over. The company is listed on all the three stock exchanges of the country. Millat Tractors is engaged in assembly and manufacture of agricultural tractors and equipments with the principal activity including distribution of “Massey Ferguson” tractors imported from UK in completely knock-down (CKD)/semi knock-down (SKD) condition. The company has achieved a deletion level of more than 90% with the successful implementation of a comprehensive plan on the back of installation of appropriate in-house manufacturing facilities and development of more than 200 vending associates.
Millat Group
The company owns 64.1% stake in its subsidiary company Millat Industrial Product. Besides investment in its subsidiary, the company also holds investments in associated companies. The company owns Bolan Castings Limited (46.26%), Millat Equipment Limited (45%) and Agrimall Pvt Limited (20%). In addition, the corporate structure of the company has changed into a group of four companies namely ‘Millat Group’, and is responsible to ensure professional management - supporting all group companies.
A significant market player
Domestically, during the FY08, Millat Tractors Limited was the market leader with 51% share versus 50% share held in CY07. Despite declining trend in tractor industry (4% drop), the company managed to increase its volumetric sales by 1% at 27,296 units. However, during 5MFY09 period (July-Nov 2008), Millat’s market share dropped by 470bps to 44.8% in comparison to 49.5% market share during the last year’s corresponding period. Unit sales of the company during 5MFY09 also declined by 9% to 9,075 units whereas, industry’s volumetric sales remained at par of pervious year’s period. Besides local sales, the company also exports tractors and agriculture implements. During FY08, the company’s exports were recorded at PRs153mn as compare to PRs48mn exported in CY07.
Accolades
Since 1979, the company has been a recipient of Corporate Excellence Awards of Management Association of Pakistan, Top 25 Companies Award of Karachi Stock Exchange, Best Corporate Report Award of ICAP and ICMAP, Best MF distributor award by Massey Fergusson (MF), England and Highest Achievement of indigenization by Pakistan Association of Automotive Parts & Accessories Manufacturers.
Products
The company offers wide range of tractors, industrial products including diesel generating sets, prime movers and forklift trucks and also an array of agricultural implements. The company has five different tractor variants ranging from 50HP to 85HP meeting all agro-climatic conditions, size of farms and buying capacity of various segment of farmers. The product line in agricultural implements includes chisel, disc & mould board plough, tine tillers, offset disc harrow, ridger, front blade, multi-purpose rear blade, agricultural loader, farm trailer, hydraulic tipping trailer, jib crane, post hole digger, lawn mover, and pneumatic pruning set etc.
Financial performance
During FY08, the company posted 27% higher PAT at PRs810mn as against PRs637mn in FY07. Whereas, sales revenue increased by 2% primarily on account of 0.6% higher units sold. Despite higher cost of production amid of soaring steel and fuel prices, gross margins swelled by 288bps to 13%, thus, gross profit grew by 30% at PRs1,473mn. However, in 1QFY09, sales revenue registered healthy growth of 25% at PRs2,873mn whereas, volumetric sales increased by mere 2% at 5,840 tractors. Although the company passed-on the impact of increasing production cost during 1QFY09, gross margins squeezed by 240bps to 10%. The company’s bottom-line increased by 5% at PRs151mn in 1QFY09 as against PRs144mn in the corresponding period of last year.
Research First Capital Equities Ltd
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