Millat Tractors Limited (MTL) is expected to disclose its financial result for the period of 1HFY24 on 27th Feb’24, whereby we forecast net profit to arrive at PKR 4,843mn (EPS: PKR 25.3), showcasing a growth of 472% YoY. Earnings growth is expected because of better volumetric sales (+2.4x YoY). Every quarter, the bottom line is projected to clock in at PKR 2,551mn (EPS: PKR 13.3) in 2QFY24 vis-à-vis PKR 397mn (EPS: PKR 2.1) in 2QFY23, depicting a massive growth of 6.4x YoY.

The increase in profitability is primarily owed to the increase in tractor prices coupled with recovery in tractor sales (2.5x YoY) on the back of improved farmers’ income. The other income is anticipated to plummet by 42% YoY, settling at PKR 171mn in 2QFY24 because of one-time dividend income from Millat Equipment in SPLY. Finance cost is anticipated to decline by 88% YoY amid repayment of short-term borrowing.

Additionally, we expect the company to announce a cash dividend of PKR 20.00/share (PKR 20.00/share in 1HFY24).

Courtesy – AHL Research