The board meeting of Millat Tractors Limited (MTL) is scheduled on 27th Oct’21 to announce the financial result for 1QFY22. As per our expectations, earnings may clock-in at PKR 1,044mn (EPS: PKR 15.51), down by 8% YoY and 29% QoQ compared to PKR 1,135mn (EPS: PKR 16.87) and PKR 1,480mn (EPS: PKR 22.00), respectively.

Despite similar volumes of 7,197 units in 1QFY22 compared to 7,225 units in 1QFY21, we expect net sales of the company to surge by 13% YoY to PKR 9,593mn given multiple increase in tractor prices and change in sales mix.

Other income is expected to grow massively by 139% YoY to PKR 167mn. On a sequential basis, net sales of the company is expected to decline by 24% QoQ given 25% QoQ decline in tractor sales (units sold 9,600 in 4QFY21). That said, we expect margins to settle at 18.95%, down by 306 bps YoY and 59bps QoQ due to depreciation of PKR and surge in prices of raw material.

Courtesy – AHL Research