MTL gained 20% in one month, here’s why

Taurus Securities Limited has just published a report on MLT’s monthly sales.

Millat Tractors Limited (MTL )sold 4,686 units in December 2024, the highest since April 2018. MTL Sales went up 2.3 times compared to the previous month. The main reason for this increase is the launch of the Green Tractor Scheme in Punjab. The Punjab Government plans to provide 9,500 tractors to farmers with a subsidy of PKR 1 million. Tractors with 50HP to 85HP, made locally, are eligible for this scheme.

MTL, with about 60% of the domestic tractor market, is expected to benefit the most from this scheme. News sources say that 3,973 tractors are delivered, with the rest expected to be delivered by March 2025. MTL is likely to provide another 3,000-3,500 tractors under the scheme until March 2025.

The total budget for the scheme is PKR 30 billion, which means around 30,000 tractors can be delivered under the entire scheme, considering the PKR 1 million subsidy per tractor. MTL may see significant sales growth in the second half of FY25 and FY26, but more details are awaited.

Initial estimates of Taurus Securities Limited suggest MTL sales to be around 19,000-20,000 units for FY25, higher than their earlier estimate of 14,500 units for FY25. This increase in sales is expected to lead to higher earnings and improve the company’s valuation.