VST TILLERS TRACTORS LTD (NSE: VSTT) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
V.T. Ravindra — Managing Director
Antony Cherukara — Chief Executive Officer
Nitin Agrawal — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
operator
Yes. Ladies and gentlemen, good day and welcome to VHC Tillers Practice Limited 3QFY26 post result conference call hosted by BNK securities from BSE Tillers and Tractors Limited Management. We have with us today Mr. VT Ravindra Managing Director. Mr. Anthony Sharikara Chief Executive Officer. Mr. Nitin Agarwal, Chief Financial Officer. At this point all participant lines will be the result only mode. And there will be an opportunity to ask questions after the management presentation and opening remarks open to you. Over to you sir.
V.T. Ravindra — Managing Director
Good morning everyone and happy to take you through the details of our performance for the last quarter and nine months so far. The safe harbor statement moving forward. I’ll be sharing with you the key highlights. Sales, volume, financial performance and awards and recognition. Some of the details of the awards and recognition that we have received in the past nine months and that last. Quarter.
V.T. Ravindra — Managing Director
Key highlights of our performance. We have had the highest ever turnover for nine months achieved 912 crores against 693 crores last year. Nine months is power tiller sales in nine months. 55% growth over the last year. Nine months 63% growth has been achieved in power veder sales as well at 8,399 weeders against last year of 5,142 numbers. We have turned around the domestic tractor business with an 18% growth. I’ll share more about it in the coming slides. We have had improved cash generation of 108 crore this year. And as I said for the nine months we have had the highest turnover.
Also for quarter three we have achieved Rupees 314 crore vis a vis 219 crore of previous year. Quarter three moving on, coming to the nine month sales volume power tiller we have grown by 55.1%. 37,374 power tillers against 24,100 power tillers the previous year. Tractor domestic 3352 against 2846 of the previous year with a 17.8% growth. Export has been a bit down at 886 against previous year of 1151 with a minus 23%. We expect to kind of gain back something in the quarter four on this one. Powervida8399 against 5142 of last year. So it is registering continued high growth at 63.3%.
Power Reaper 3305 against 2246 of last year with a 47.2% growth. Moving on to the sales volume of Quarter 3 Power Tiller was at 12545 against 6775. Of course that was a lower base last year with the sparse issues causing cash flow problems in the SFM business. Tractor domestic again at 32% growth has shown good growth and like I said some more details here. We are in the process of launching new products. In fact in Q3 we had not yet launched all the new products and also revamping the VST Zetor tractors. So this growth is without those volumes having been plugged in yet.
So going forward we should be able to register growth in this segment continuously. Tractor Export we kind of reduced the negativity which we saw in Q1 and Q2. In Q3 and Q4 we expect to catch up further. Tractor export was at 320 against previous year of 382. Power bidder we have again doubled the volumes in quarter three at 3429 against 1652 and power reapers it’s a seasonal business of course in quarter three typically tapers down. We did 1793 against 1614 for the previous year. Quarter coming to revenues nine months performance on revenue we are at a 32% growth at 912 crores.
Visa vis last year of 693 crores on operational EBITDA which is inclusive of the provisioning we have done for the new labor code is at 13.1%. The visa is last year of 10.2%. Now with on PAT we are at 100.7 crores against last year of 69.5 crores. Coming to Q3 performance the revenue is grown by 44% at 314 crores against last year of 219. Operational EBITDA at 12.9% against 8.9% of the previous year then PAT at 30.7 crores against a lower base of 1.7 wherein the previous year we had some mark to market losses in the set quarter.
Some of the awards and recognition. Happy to share that we’ve won Design Excellence award. Would like to elaborate a bit here. This shows the strength of the R D that we have been working on for the last 45 years. The competency that we have Developed and we have won winning awards now on the new range of tractors which is coming in from the VST stable with a completely newly designed engine which is fuel efficient and torque max. That is Phantom, fuel efficient and torque max. And also with the range of electric feeders which is also in the process of launch in various markets.
And you will see those figures coming in in Q4 slightly and mainly in the next financial year. Happy to share that. I was also awarded as ET India’s impactful Turnaround CEO. We’ve won several awards on the design front at the Global Design Summit. We also are working on several productivity improvement measures wherein we also won the jury challenger winner in the challenges trophy competition organized by CII and several other awards as well. Thank you so much. And we’ll move on to answering the queries from the other end.
Questions and Answers:
operator
Yeah, thanks sir. We will now begin the question answer session for participant who wish to ask a question. I request you to please raise your hands. Alternately, you can also type your questions in the chat box. We will wait for a moment when the question queue assembles. Yeah, first question is from Shreyas Gatani. Please unmute and ask your question.
Unidentified Participant
Morning sir. I had a few questions. So the first one was if you could comment on, you know, the marine engine entry that we saw. What is the plans there and what kind of market we are targeting. If you could just give us some color on that.
V.T. Ravindra
Yeah, quite frankly it’s very initial days in that segment we wanted to take an exposure. We believe there is an opportunity there in terms of providing our combat engines, especially on fishing trawlers and small boats. Not necessarily as an outboard engine, but an inboard engine which occupies lesser space. So we have tied up, created the complete drive system for the boards and this was our first kind of exhibition that we participated in to kind of make our presence felt in the market. It’s very initial day so we don’t have any numbers at as yet. But we feel this is a good opportunity we will pursue going into the future.
Unidentified Participant
Got it. So just trying to understand what the size of the market is, you know, in terms of numbers. What, what target market we are looking at.
V.T. Ravindra
No, the segments are very varied. So I won’t be able to give you a size unless I would. I, you know, you know, the segments are very different from large fishing trawlers to very small fishing boats, luxury boats, yachts to very small power boats. So we are learning more of it and you will hear from us more about it in the coming orders. Got it.
Unidentified Participant
Okay. My Second question was on the new launch of products. So the Phantom series I believe we’ve already launched in the quarter that went by. Right. Or was that not the case?
V.T. Ravindra
We have just launched in one state, which is Gujarat. So now we will be launching in Maharashtra, which is the next place we will be launching with Gudipadwa coming next month and then go on for launches in all the other states in the next financial.
Unidentified Participant
Okay, okay. And that will be the same for the Zetor series also.
V.T. Ravindra
Yes, Zetor is a complete revamped series. Now we will be launching because we have been seeding in the last one year or so and now we have a complete revamp product. So that process of relaunch is happening in Q4 to begin with in March and then going forward into the next financial.
Unidentified Participant
Got it. So my last question is on the commodity prices. So are we taking any price corrections with the rise in the steel prices.
V.T. Ravindra
That we’ve seen on ferrous metals, the fluctuation has not been very high or the increase has not been very high. So nothing is happening on that front. But on the copper it has been pretty steep. And in some of the areas, especially in radiator, on a particular model that we use a copper radiator, otherwise it’s aluminum only on that front. So it is not being material at this point in time.
Unidentified Participant
Okay. Okay. And on the electric tiller and the, you know, hybrid product, if you could give some color where we are on that.
V.T. Ravindra
Yeah. So like we said in the last quarter, we are introducing electric power weeders and electric power tiller. So we would be starting to seed them in this quarter, in March we should be able to start seeding them in the market and scaling up steadily based on the response from the market in the next financial year. So it is going as per plan.
Unidentified Participant
Got it. All right, that’s all from my end. Thank you.
V.T. Ravindra
Yeah.
operator
Reminder to participants, if you want anybody to ask question, please raise your hand. In the meantime, I’ll just go through some questions in the chat box. Tiller. So we are seeing some good traction. So what is driving this? And it’s expected to sustain.
Antony Cherukara
So like I have always said, the largest segment of farmers is small and marginal farmers in this country. And we have had a normal year. This year there is nothing significantly happened that these volumes. It is not that some extra order, special order or some government order came in for this volume growth. It has been a normal year with normal rainfall, normal everything and hence this growth which we always said will happen in this segment and we expect this to continue. However, you know, as I said, this is a very sensitive segment. If there is issues in rainfall, if there is issues in liquidity which we saw the last financial year wherein the sparse scheme kind of stopped everything that will definitely affect.
But the potential doesn’t go away. This continues to be a great market, great potential. And 80% of Indian farmers are in this segment. It is not 80% farmers are not tractor bias. In fact 80% farmers are looking for small and affordable solutions. And that is what I have been always saying that you know, this is the segment to watch out. This is the bottom of pyramid potential that is available to us. And I think that is the reason why you see power tailer is being growing. And also more significantly, I’ve said this before, the power meter segment will continue to grow and even grow faster than this going forward because that is even more affordable for the small farmer.
The price points are much lower than even the power tiller and hence it will continue to grow. And I don’t see this growth stopping anytime soon. Thanks. Next.
operator
Mr. Arjun Khanna, you can unmute and ask your question.
Unidentified Participant
Hello. Am I audible?
V.T. Ravindra
Yeah, you are.
Unidentified Participant
Yep. Thank you for taking my question. So I would like to just start with extending my heart for condolences on the passing away of Mr. V.K. surendra. So we all have had a privilege of meeting him in AGMs and in office. And obviously his dedication, integrity, soft spokenness and the values he’s embodied have left a lasting impression on everyone. So just wanted to start with this. Coming to the questions on the company, sir. Given that the international tractor business we have seen slight weakness and India has signed a few international trade deals especially with Europe and us.
How do you see this pan out in the year ahead? Is there scope for revival out here? Obviously Europe will probably take a year for it to fructify. But are there any advantages from these deals accruing to us?
V.T. Ravindra
Thank you Arjun. And definitely I’ll convey to our current chairman Mr. Arun Surendra. And. And he’s not in the meeting today but I’ll definitely convey it to him. Yeah. Going forward I think Europe has tremendous potential. We have always believed in it. And that is the reason. Couple of quarters back we said that we are now working towards establishing a base in Europe with our ground operations starting in Europe. So far we have been trading or rather exporting from India to our distributors in Europe. That had its own challenges with all the conflicts going around and the logistics cost and the time required for logistics varying through the year and creating complexities for the distributors in terms of cash flow, in terms of working capital involved in the business and the rotation of the same.
So first is we are establishing our base in Europe. Hopefully first quarter of next year that should be up and running. Second is we are studying the eu, fda. All the details are not out. It should benefit us in some ways. The taxation difference is not much because the tractors aren’t taxed much in the European market. But there could be other benefits in terms of putting our people on the ground in terms of easier visas employment possibilities which will help us scale up our operations in Europe faster. So we are working on it. Sure.
Unidentified Participant
So we were planning on launching platforms for the us. So is that on stream or had we delayed it given uncertainty on the USD?
V.T. Ravindra
Like I have said in the previous meets or talks that we have had, the product development was never stopped. So it continues because we believed that the tariff will go away one day. However, today it is considerably reduced and it’s feasible now for us to enter the US market. So like I have said before, in 2027 we will enter the US market. But all of us know it is a very volatile situation and things change every other day. So we are hoping things now are stable going forward.
Unidentified Participant
Sure sir. My next question is on the power vita business. So we were setting up manufacturing capacity you had mentioned we have now assembly operations of 10,000. Given that we are scaling up, are we looking at more launches increasing the size of manufacturing for us?
Antony Cherukara
Definitely yes. The answer is definitely yes. We will be scaling up the power batter business considerably. We are almost, you know, by the end of this year we’ll be close to doubling the business from last year and this growth will continue because the base is pretty large like I have been saying all the while. And we will definitely look at options because we will have to look at new manufacturing as our capacities are slowly getting completely utilized.
Unidentified Participant
Final question sir, what’s the CapEx for next year? How much do you envisage spending in FY27 both on R D and on physical capex?
Nitin Agrawal
See the outflow, cash outflow on capex. We expect next year to be around 60 crores and the commitment will be even larger because we would be looking at some long term projects. The technology projects continue to happen in vst. We are becoming a end to end enabled on becoming internal supplier of engines and also looking at opportunities outside. One of the opportunities we were looking at is marine and going forward we look at the opportunity of becoming an aggregate supplier in a big way so that investments will continue. So the commitments will be much larger but the cash outflow on capex will be around 60 crores.
Unidentified Participant
Sure. And this includes our product development R and D that’s over and above this.
Nitin Agrawal
This. Yeah. This will be some amount of it will go into the global tech center that we are developing also.
Antony Cherukara
Right. Portion of it will go into product development. Sure.
Unidentified Participant
Thank you and wishing you all the best.
V.T. Ravindra
Thank you.
operator
Thanks Ardentana. Anybody ask a question please raise your hand or type in your questions in the chat box. In the meantime Mr. Shubham, you can unmute and ask your question.
Unidentified Participant
Hello, I’m audible.
V.T. Ravindra
Yes.
Unidentified Participant
Hi. Hi sir. Congratulations on good set of results. My first question is on small farm machinery. I just want to understand when you say there’s a big headroom for you on growth in power bidders and power. I just want to understand on market size how big is the small firm machinery in market? We compare that with tactors and tractor. Implements and where do we see this market to grow in next five years?
Antony Cherukara
See we have to talk about potential here because the industry since if you look at it it won’t be very substantial at this point in time. The tractor industry today is at about a million. The number of households involved in farming in India is about 50 crores. And now if I take all the tractors get hired to five farmers at least which is not the case because many of the tractors run on commercial use. But even if I say that every tractor gets hired it’s about 5 crores that or 5 crores households that will get served.
Still There is about 10 crores households which won’t have any sorts of mechanization. And with the, with the large amount of small farm holdings this 10 crore households occupy which will all need mechanization because the labor costs are considerably high compared to the previous years. So that is the kind of potential, it’s the bottom of pyramid potential which is there which is continuing to be high. Why is it growing now? Many reasons. One is the penetration of Internet and information point number one. Point number two, the availability of finance, retail finance which used to be zero for example for power tillers couple of years back.
I’m very happy to say Today our almost 12 to 13% of our business is retail finance for power tillers which will continue to grow and kind of create capital enough for people to buy small farm machines. Third is government intervention and focus on small farm mechanization other than tractors. Government through its agri, universities and Krishi, Vigan, Kendra as a driving mechanization in a big way especially for small and Marginal farmers. So multiple reasons why this segment will continue to grow and that is the need of the hour. Because if agriculture has to grow above 4% in India, the large largest segment of farmers, which is a small and marginal farmer, their growth has to happen and the government is completely focused on it.
And we are, you know, dead in the center of this segment and we expect that this segment to grow aggressively going forward as well.
Unidentified Participant
Sure, sure. Thanks sir. And with that would. Would you be seeing any competition from Chinese imports or any other, you know, import from lower cost territories or something?
V.T. Ravindra
Power weeders for example? I’ll tell that sir, I first. Okay, let me tell about power tillers first. So power tiller, no Chinese imports are allowed. So you know, we don’t expect that to happen at all. Now coming to the power meter segment today there is still large inboards of Chinese equipment. But what we are seeing is with the manufacturing of power weeders in India and better quality products reaching the small and marginal farmers, they are adapting it faster and with more trust on the brand like vst, they are coming forward because we offer a two year warranty on these machines which the Chinese do not offer.
These things are creating trust on the brand. And hence we believe going forward based on reach and coverage, if we can reach and to every small farmer in terms of establishing a counter in every taluka, we will be able to penetrate this market and the growth will continue. So the Chinese influence will diminish over a period of time. Sure, sure.
Unidentified Participant
And there are few global brands, right. Which are still there in India and been built on a bigger scale in small farm machineries. So how do you see that competition laying out for you?
V.T. Ravindra
There is Deha three significant players, if I can name them. You know, there’s a, there’s a German player. There is a. There is a. There is, I would say a Japanese player. Japanese player. So. But I don’t see them really and most of them are still importing from China as well. So I don’t see them able to offer the same trust and the warranty and all that we are talking today and which we are offering today to the farmers. And that is why you see 107% growth in quarter three, for example. And I don’t think this is accidental or like I said in the beginning during my presentation I said it is not accident.
It is not as if the government suddenly gave some special scheme. Nothing has happened. It is normal growth. It is regular growth. As we penetrate more and more into the market and make products available at taluka level. I Think that is the key point if we can reach because for these products the farmers are not going to travel to the district headquarters. They will go to the nearest counter and buy. And that is where VSP is focusing. How to get to his village, how to get to his buying point and deliver the product to him with a two year warranty with the service available and the spare parts available.
And the third point which I said spare parts availability, that is one big point against the Chinese players because the support and service is not available for those products. Sure, sure.
Unidentified Participant
I just have one last question before I come back in. Kyo Just want to understand more from your distribution perspective when you say you want to be on the last mile for a farmer, right? Just to get to his service on spare parts and bit more nearer to him. So how do you want to expand your distribution?
Unidentified Participant
Would it be?
V.T. Ravindra
Yeah, good question. So you know we have been depending only on our dealer network so far but couple of quarters back we started working on a distributor retail network also for these segments. That is a power reader, brush cutter, chainsaw, that segment we have started working on a distribution retailer network. Today we have about 10 distributor. It was a pilot phase for us. We have about 10 distributors and about 300 retailers at this point in time. But we want to significantly scale it in the next few years.
Unidentified Participant
And how many dealers do you have. Today in SFM we have about 650 dealers.
Antony Cherukara
And this would be different from what you have for tractors, right? Because again ticket size are bit different.
Unidentified Participant
It is a separate channel. Sure, thanks. Thanks a lot. I’ll fall back into it.
V.T. Ravindra
Thanks Shubham
operator
. Next question is from Mr. Krish. Please unmute and ask your question.
Unidentified Participant
Yeah. Hi. Thank you for taking my questions. I have three questions basically. So I wanted to understand from a farmer perspective. You said in your SFM you are targeting the marginal farmers. So wanted to understand from the farmer’s perspective what is the advantage of buying a small farm machine rather than renting a tractor. And like also the second question is why enter the marine engineering market when you are specialized in the agri industry and have opportunities to cross sell there. Thank you.
V.T. Ravindra
Okay, so from. I’ll answer the first question first. The small and marginal farmer feeds it a small machine instead of renting a tractor. Primarily because the cropping season is limited. It’s few weeks for sowing, it’s few weeks for harvesting. Hence when he needs a tractor he necessarily doesn’t get a tractor. Like I said in the to the previous question that if assuming there is every single tractor gets Hired also you, you get to cover only about 5 crore households. But there are 15 crore households which is in farming. And that means around 10 crore households do not have any mechanism to address.
With the labor cost going up today also they are relying on Labor. But from 150, 200 rupees, most of the places the labor costs have become 500 rupees or 600 rupees. And in some of the southern states it’s above 800, 900 rupees as well. So with that kind of labor cost, it has become unaffordable for a 1.52 acre farmer to hire labor and he doesn’t get the mechanization or the tractor on time. And the third reality is there is unfortunately a caste system in India. We all know that. And some, some of the people do not get the machinery due to these circumstances as well, even though there are custom hiring centers.
So all these realities put together, you know, there is a huge demand coming up for small farm organization. And coming to the, you know, the second point on marine engines, it’s an adjacency for us. We have compact engines. There is no need for any separate capex required. We see this as an opportunity and we are exploring it. Like I said to the previous caller, it’s very initial days. We will see how it goes and probably in the coming quarters we will see how, how exactly this could be a future for us.
Antony Cherukara
Yeah, and the entire marineization is through a third party.
So it is not that we are getting a capex commitment on this.
Unidentified Participant
Okay, great. So if I could just squeeze in a last question. Coming to the tractors industry. So VST. Yes, it’s 50 HP and below tractors, what we primarily sell. So wanted to understand what is the trajectory of the Indian market right now? What are the farmers preferring above 50hp or below 50hp and what are your expectations of volume growth in the future?
V.T. Ravindra
Yeah, so I’ll just give you a color of the industry first and then talk specifically about VST’s role in this. So tractor segment typically is divided into up to 20 GP, 20 to 30, 30 to 40 and 40 to 50 and above 50 is very small in terms of the industry size. And up to 30 HP is also only about 50,000 to 60,000. And compact tractors and total industry size up to 30 HP is about a lakh out of the 1 billion. Right. So the largest segment, which is almost 8 lakhs plus or close to 9 lakhs, it is between the 30 to 50 HP and among these two segments, 30 to 40 and 40 to 50. The larger growth is coming in the 40 to 50 HP segment. So till recently VST was playing only up to 30 HP. Now we have some combat tractors that we have launched in 30-40hp and the larger segment which is the growth segment which is 40 to 50 HP segment where we are working with Zetor VST Zetor products are coming in. Typically 1% market share in this industry is about rupees 500 crore.
We are less than 1% market share today. But we strongly believe that in the next five years we can definitely claim 2 to 3% market share. That is definitely possible in the next four to five years. And that is why we are confident that is a good Runway for growth for VST in the tractor segment.
Unidentified Participant
Sure sir. That’s all from my side. Thank you.
operator
Thank you. I will read few questions from the chat box on the subsidy releasing of subsidy. What are the current status? Is there any challenges or. Now it’s fairly better.
V.T. Ravindra
Subsidy is normal, continuing regular. With the first scheme last year where they introduced a new mechanism of paying the state governments the central portion. All those things have been streamlined. So it’s been regular this year but not increased. It has been the same subsidy amount overall that has been coming. It has not been increased. So the subsidy allocation has been the same but it’s been more regular because it’s become systematic. I don’t see going forward anything happening to it because a new budget also has not changed allocations. It has neither increased nor reduced the allocation.
So I expect normal normalcy to continue. But in the first quarter of this year we have some elections, state government elections which could slow down a bit in the first half of the financial year. Especially in terms of subsidy flow. Whenever an election happens we have seen that trend is flows are stopped for a few months. So I think then it will regularize. But I don’t see at this point anything which should amber that unless there is a new surprise that comes up.
operator
Okay sir. Mr. Shubham, you can unmute and ask your question.
V.T. Ravindra
Yeah. Hi. So just my first question again would be is there any subsidy on SFM site from government which is pushing more on SFM versus tractors.
Antony Cherukara
There is no extra subsidy on sfm. That’s. That’s. You know the answer that I was trying to give in the previous question as well. There is no extra subsidy on sfm. It’s a regular subsidy. It’s become systematic and it is happening on a regular basis. The focus definitely is of the government as before. Even today they focus more more on the Small and marginal farm. Right.
operator
This question comes because we are present in both side. Right. The tractors as well as SFM just want to understand our positioning. Where do we to. There is no extra subsidy on az. Nothing extra?
Antony Cherukara
No, no, not from the subsidy perspective, but from the growth like we are presenting tractors visa vis. Both would be very contradictory at the simultaneous.
Antony Cherukara
Yeah. So like I said, I gave you two answers. One is SFM is based on potential and we are continuing to explore that potential. And like I have said in all the previous quarters that this potential is large and we are still scratching on the surface. We have more to do, lot of work to do on the ground and that is what we are continuing to do. We will have to get to every taluka. You know, that is about 6,000 counters is what we are looking at to begin with. We are roughly at around thousand counters at this point.
So we have to increase the number of counters six times of today to really penetrate into this possibility and exploring it fully. That is sfm. But tractors, there is a Runway, there is an industry size. We are looking at how to get to 2 to 3%, 2% market share in the next three, four years. And I think that is something which we can definitely do. Sure, sure.
operator
One question is on manufacturing. You mentioned the Japanese and German players are still importing from China, whereas we have capacities in India. So do you want to expand it going forward? How do you want to source your products?
Antony Cherukara
Yes, yes, we will have to expand it because our small farm machine factory based in Mallor is running to almost full capacity now. So we are evaluating various options. What’s the size of this capacity? We are at about 70,000 in terms of installed capacity. But if you do a third shift, we can go up to a lakh of power tillers plus, you know, weeders plus reapers, plus new products that are coming up, electric weeder, electric driller and all of that. So all of that put together, we feel that we will have to add capacity in evaluating whether this putting all eggs in one basket or diversifying.
We have never had a manufacturing facility in any other part of the country other than the south. We believe that it is time that we should look at having a factory somewhere in the north, somewhere in the west. So we are looking at options, but it’s too early. I am sure in the next few quarters we will finalize on that. Yeah.
Unidentified Participant
And are we able to achieve the cost parity with the Chinese imports? Assuming in breeders we are allowed to import, then are we at parity with them?
V.T. Ravindra
See, let me be Very frank with you. We won’t be able to achieve parity with Chinese costs. That is very clear. But what we can definitely do is more create more value for the buyer to buy from us. Provide him warranty, provide him service and provide him, you know, parts when he needs it. And I think that is what the customer values and that’s why he’s buying from us.
Unidentified Participant
Sure. So just to just want to quantify how. How much are we expensive than Chinese? Would it be in the range of 10, 15?
V.T. Ravindra
Depends on machine to machine. But roughly I can say we would be expensive by 15 to 20%. Roughly.
Unidentified Participant
Sure, sure. Thanks. Thanks for that. Just one last question. I’m comparing you the quality Chinese product.
V.T. Ravindra
There are throwaway Chinese products as well. I’m not comparing with that.
Unidentified Participant
Understood. And one last question is on smams, that submission on agricultural mechanization, when government is saying to, you know, develop custom hiring centers. So would that be a threat for. Us when you know, hiring of tractors become a threat for tractor industry, Would that the same thing happen for equipment market?
V.T. Ravindra
Custom hiring centers has been around for the last 10 years. Okay. And it is not. I have, every interaction I have had with the government, I have told them it will not work. The reason is simple. Because all the farmers need the machine at the same time. The cropping season is given like in a given geography. The cropping, the sowing happens in a window. Everybody needs at the same time. And there is no way one customer hiring center can satisfy everybody. So that is a practical difficulty. And also I said there are issues in various parts of the country related to the economic strata, the cash strata and all of that which creates its own issues.
So I think low cost mechanization ownership or innovative mechanization ownership, which is affordable for the farmer is what will solve, you know, the mechanization issue for the small and marginal farmer.
Unidentified Participant
Sure, very well understood. Just one last bit. Would are you seeing any pressure on your pricing and then margins going forward on this on the equipment markets due to competition or due to a bit of imports?
V.T. Ravindra
Not really because of imports, because we have already seen that when we got into the power meter segment two, two years back, we were actually late entrant into that market. We have been able to grow very significantly in the last two years. We have seen that of course there is a willingness to pay for a given product. We won’t be able to price it beyond that. But definitely there is a willingness to pay for a good product, good service and good trusted brand. So there is no real pressure in Terms of fighting the Chinese on the price front.
Okay.
Unidentified Participant
Okay. So you are comfortable in maintaining your margins at this level?
V.T. Ravindra
Yes.
Unidentified Participant
And how much that be? 30, 30 to 35% on gross in equipments?
V.T. Ravindra
Varies between equipment to equipment.
Unidentified Participant
But in blended terms some new products.
V.T. Ravindra
Will be lower, some old products will be better than what you mentioned and overall we will be around that.
Unidentified Participant
Okay. Okay, sure. Understood. Thanks. Thanks for answering my question. Sir.
operator
You can unmute and ask your questions but there’s lack of time so you can restrict your questions to one.
Unidentified Participant
So sir, just one question would be first, what is the outlook for Q4? And second part would be know with the US FTA, the free trade Agreement and now even the American companies are looking to now import into India. So would we be looking for some sort of tie up say to either be their distribution partner or say co marketer or something on that front?
V.T. Ravindra
I’ll answer the first one. I think the growth will continue. We don’t expect any problems in Q4. I think we are growing at about 30% so we should end up the year between 25 to 30% for sure. Coming to the second question, Eufta I’ve already answered there could be possibilities especially because the taxation was not big on tractors earlier. So it doesn’t affect that. But it could be helpful in terms of establishing our operations, employing our people down there on the ground or you know, kind of other taxation issues related to establishing a VST enterprise in Europe.
Coming to the US importing into India, the cost of those products are pretty steep. So I don’t think there is any threat to the Indian farm machinery market from the US And I don’t see anything in particular as a significant opportunity at this point in time. But we will be open to that. If there is a real opportunity that comes up, you know, we will take it with both hands. Sure.
Unidentified Participant
Just a small follow up sir, for Q4, what’s the outlook for tractors? Because tractors is kind of slightly behind what we have been guiding for H2. If I could look at the numbers. So any color on tractor will it start picking up and the exports outlooks are for Q4 and Q1.
V.T. Ravindra
Yeah. So cumulatively tractor domestic plus export I have guided with anywhere between 6,000 to 6,500. We will be meeting that this year. I am hopeful that we will cross the 6,000 numbers this year for tractors and the growth will continue. This will happen both on the domestic front and we would be better off on international compared to the first two quarters in Q3 and Q4. So some of the negativity should be reduced and we should be close to flat in the international business. But we could be slightly negative also. It’s too difficult to say on that front.
But we should be reducing some of the negativity on the international front. But going forward with establishing the Netherlands operations that we are putting up for Europe, we should be able to rotate faster and help our distributors in terms of cash flow for them. I think that will give us the much needed growth in Europe.
Unidentified Participant
Sir, for exports, what’s the breakup between, say, US Europe and rest of the world say? Keeping in view the full year FY26 guidance. So what constitutes. For what portion is it like Europe?
Nitin Agrawal
FY26 US is zero.
Unidentified Participant
Okay.
Nitin Agrawal
Europe is 90%, Africa would be 5% and rest of the world 5%. Okay.
Unidentified Participant
Thank you, sir. Really appreciate your time.
V.T. Ravindra
Yeah, I’m there.
operator
Do you want to make any closing comments, sir?
V.T. Ravindra
What is it?
operator
You want to make any closing comments?
V.T. Ravindra
I just. Oh, no. Thank you so much for attending this meet and look forward to meeting you the next quarter. Thank you so much.
operator
Okay, we thank all the participants and we can close the call.
V.T. Ravindra
Thanks.