Millat Tractors (MTL) set to ride high on Punjab’s green tractor scheme

Millat Tractors Limited (MTL), Pakistan’s leading tractor maker, is all set for a strong rebound in FY26, thanks to the Punjab Government’s Green Tractor Scheme Phase-II.

Government support boosts tractor sales

Punjab’s new scheme will provide 20,000 subsidized tractors to farmers starting from August 2025. The breakdown includes:

• 10,000 tractors (50–65 horsepower) with a PKR 500,000 subsidy
• 10,000 tractors (75–125 horsepower) with a PKR 1 million subsidy

MTL is in a strong position to benefit from this program. Why? Because it already has a 64% market share and offers exactly the kind of tractors the scheme supports.

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Big impact expected in FY26

Deliveries from Phase-II are expected to begin in 2QFY26, and analysts believe MTL could sell an additional 8,000–10,000 tractors because of this program. That alone could boost the company’s earnings by PKR 14–17 per share in FY26.

In the first phase of the scheme (Nov–Dec 2024), MTL’s sales jumped to 18,580 units, far higher than earlier expectations. The scheme helped the entire tractor industry recover from weak sales, especially when farmers were struggling with poor crop prices and income.

Challenges in FY25, but recovery ahead

In the first nine months of FY25, MTL’s revenues fell by 43% due to weaker demand and higher finance costs. But sales recovered toward the end of the year, thanks to the earlier launch of Phase-I of the tractor scheme.

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Now with Punjab’s agricultural budget rising to PKR 123 billion, and a large chunk of that reserved for the Green Tractor Scheme, the outlook is turning positive again.

Valuation & stock recommendation

Analysts at Taurus Securities Limited maintain a ‘BUY’ rating on MTL, with a December 2025 target price of PKR 650, offering about 14% upside from current levels. The stock is expected to benefit from:

• Government subsidies
• Better farm conditions (especially in Punjab)
• Lower finance costs
• Improved margins

Risks to watch

• Delay in subsidy payments
• Weak farm economy
• Unresolved sales tax issues
• Loss of market share to competitors

With government backing and strong demand expected, Millat Tractors looks ready for a comeback. If you’re an investor tracking agri-sector growth or PSX-listed manufacturers, this is one stock worth keeping on your radar.

Source: Taurus Securities 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 →