Millat Tractors Limited (MTL) announced its 1QFY22 financial result today where the company declared earnings of PKR 1,317mn (EPS: PKR 19.58) during 1QFY22, up by 16% YoY while down by 11% QoQ from PKR 1,135mn (EPS: PKR 16.87) and PKR 1,480mn (EPS: PKR 22.00), respectively.

Result Highlights

·        Net sales of the company surged by 17% YoY while down by 21% QoQ during 1Q to PKR 9,938mn. Despite similar volumes of 7,197 units in 1QFY22 compared to 7,225 units in 1QFY21, net sales of the company increased due to multiple increase in tractor prices and change in sales mix.

·        During 1QFY22, margins dropped by 118bps YoY to 20.83% due to depreciation of PKR and surge in prices of raw material.

·        In 1QFY22, other income arrived at PKR 248mn, up by 256% YoY and 91% QoQ due to increase in cash and bank balances.

·        That said, MTL booked taxation at 26.5% in 1QFY22 as compared to 24.2% in 1QFY21.

 Recommendation       

·        Currently, we have ‘BUY’ call on the stock with a Dec’21 target price of PKR 1,182.8/share.

Courtesy- AHL Research