VST Tillers Tractors Shows Positive Growth in Q2 FY24-25, But Some Areas Need Improvement

VST Tillers Tractors, a smallcap company in the auto-tractor industry, recently declared its financial results for the quarter ending September 2024. The stock call for the company by MarketsMOJO is 'Hold'.

According to the financials, VST Tillers Tractors has shown a flat performance in the second quarter of FY24-25. However, there has been an improvement in the company's score from -13 to 5 in the last three months.

The company's Profit Before Tax (PBT) has seen a significant growth of 59.6% at Rs 30.46 crore compared to the average PBT of the previous four quarters at Rs 19.09 crore. The Profit After Tax (PAT) has also shown a growth of 62.1% at Rs 44.80 crore compared to the average PAT of the previous four quarters at Rs 27.64 crore. This indicates a positive trend in the company's near term profitability.

The Net Sales for the quarter have been the highest in the last five quarters at Rs 283.43 crore, showing a growth of 24.2% compared to the average Net Sales of the previous four quarters at Rs 228.13 crore. This also reflects a positive trend in the company's near term sales.

However, there are some areas that need improvement for VST Tillers Tractors. The Non Operating Income for the quarter is 46.77% of the PBT, which indicates a high income from non-business activities. This may not be a sustainable business model for the company.

The company's Cash and Cash Equivalents have been the lowest in the last six half yearly periods at Rs 7.56 crore, indicating a deteriorating short term liquidity. The Debtors Turnover Ratio has also been the lowest in the last five half yearly periods at 4.17 times, showing a slower pace in settling the company's debtors.

In the last five years, the Dividend Payout Ratio (DPR) has been the lowest at 14.22%, indicating that the company is distributing a lower proportion of its profits as dividends. Additionally, the Non Operating Income for the quarter has been the highest in the last five quarters at Rs 26.76 crore, which may not be sustainable in the long run.

Overall, VST Tillers Tractors has shown a positive trend in its financial performance for the quarter ending September 2024. However, there are some areas that need improvement for the company to sustain its growth in the long term. Investors are advised to hold their position in the stock for now.