Millat Tractors Limited (MTL) reported consolidated earnings per share of PKR 32.82 for FY25, compared to PKR 55.46 in FY24. Furthermore, in 1QFY26, the company reported earnings per share of PKR 2.92, compared to earnings per share of PKR 2.43 in the same period last year (SPLY). MTL primarily manufactures Massey Ferguson–branded farm tractors ranging from 50 to 85 Horse Power (HP), including both two wheel and four wheel drive models.
The company recently introduced the MF 375 SE and has achieved an overall localization level of about 90%. Overall tractor industry sales declined by 36%, falling from 45,494 units to 29,192 units. MTL’s sales also decreased significantly, dropping from 30,620 units in FY24 to 18,580 units.
The removal of the Minimum Support Price system, combined with high input costs and persistent inflation, has reduced farmers’ purchasing power, directly impacting tractor demand. Sales tax refunds of approximately PKR 7.59 billion remain pending with the Government. Although MTL has won a High Court case directing the FBR to release the funds, the refunds have not yet been paid.
Deteriorating market conditions in Afghanistan have created challenges for Pakistani exporters, leading to an expected decline in tractor sales to the region, which historically ranged from 1,000 to 2,000 units annually. To offset this decline, MTL is actively targeting foreign markets, including Mexico, various African countries, and Sri Lanka. All exports are conducted on an advance payment basis to mitigate risk.
MTL believes that while schemes offer momentary boosts, they overall damage the market by causing farmers to wait for balloting results, leading to buying disruption and sales delays. Phase 1 of the Green Tractor Scheme, covering 9,500 tractors, has commenced, while Phase 2 is expected within the next six months. The recent dispatch of scheme units led to a notable month on month increase in October sales. The scheme is expected to temporarily support industry volumes. MTL’s best performing product has been the MF 385 Two-Wheel Drive model.
MTL has also been working on the National Tractor Policy draft. The Engineering Development Board (EDB) has now finalized and submitted the policy for approval, with a target for inclusion in next year’s federal budget. The Government provides subsidies directly to farmers, while MTL continues to sell at its standard retail price. Allocation of tractors is based on a balloting process determined by the applications received.
Important Disclosures
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