There is a famous saying in the stock market “In the long run stock prices tend to follow a company’s revenue.” In short, it means, ultimately, stock prices are slaves to corporate earnings. Certain events can have an impact on the stock price for the short term but in the long run stock prices reflect corporate earnings. This is turning out to be true for one of the stocks on D-Street.
About the company
VST Tillers Tractors Limited (VST) is India’s leading farm equipment manufacturer. VST was established in 1967 by the VST Group of companies. With a legacy of more than 55 years, VST continues to drive farm mechanization and empowerment of Indian farmers. The organization is the largest Indian manufacturer of Tillers and 4WD Compact Tractors and amongst the leading producers of the other category of Tractors, Engines, Transmission, Power Reaper and Precision Components. VST also exports products to European, Asian and African markets.
Q4FY23 and Full year FY23 Earning
VST has achieved a historic milestone revenue of Rs 1,006.43 crore with a healthy growth of 17.8% over FY22. EBIDTA margin stood at Rs 152.16 crore, which is 14.75% on sales. This is despite commodity inflation prices and reduction in other income from the Mark to Market gain on investments. VST has achieved highest ever sales of power tillers at 38,247 units in FY23 and export of tractors is continuously growing with 1458 tractors exported for FY23.
For Q4 FY23, revenue stood at Rs 322.61 crore, registering strong growth of 47.7% over the same quarter last year. EBITDA for Q4 stood at Rs 59.78 crore, which is 18.23% of sales.
Dividend of 250%
The Board of Directors of the company recommended a final dividend of Rs 25 per equity share for the year, which translates to 250% of the face value of shares of Rs 10 each.
Stock performance on Monday
The stock opened with a gap-up and after opening at level of Rs 2674.95 on NSE, the stock has gone from strength to strength to touch the level of Rs 2900 on NSE. Currently, the stock price is trading up by 14% and the volume recorded in the first hour of trading is near about 1 lakh shares as against a 10-days average volume of 15,900.