Millat Tractors (MTL) set for a slower quarter (Q4 FY25), but still holding steady

Millat Tractors (MLT), Pakistan’s leading tractor maker, is expected to report earnings of Rs5.5 per share for the fourth quarter of FY25 (April–June 2025). While this is lower than last year’s Rs11.5, it still reflects steady performance in a tough market.

Why the drop in profits?

MTL’s profit is likely to fall due to slower tractor sales, both compared to last year and the previous quarter. Sales volumes are expected to drop:

• 43% lower YoY
• 8% lower QoQ

This means fewer tractors were sold, largely due to weaker farm activity in the quarter.

Revenue and margins

• Revenue is expected at Rs11.9 billion, a 49% drop from last year, and 5% lower than last quarter.
• Despite the slowdown, gross margins (the profit left after covering production costs) are still solid at 27.1%.
• Selling and distribution costs are also down by 19% compared to the previous quarter, a sign the company is keeping costs in check.

Finance costs and dividend outlook

• Good news on the debt side: Finance charges are expected to fall 12% YoY, thanks to lower interest rates.
• However, finance costs are still up 29% compared to last quarter due to temporary changes in interest income reporting.

Even with the profit dip, MTL is expected to announce a dividend of Rs11/share, showing management’s confidence in the company’s long-term strength.

The big picture

While Q4 might be a slower period for MTL, it’s not all bad news. The company is:

• Managing costs well
• Holding decent margins
• Still rewarding shareholders with dividends

As farm activity picks up later in the year, especially with government support schemes, MTL could bounce back stronger in FY26.

Source: Insight Securities (Private) Limited

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →