VST TILLERS TRACTORS LTD (NSE: VSTT) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Unidentified Speaker
Antony Cherukara — Chief Executive Officer
Nitin Agrawal — Chief Financial Officer
V.T. Ravindra — Managing Director
Analysts:
Unidentified Participant
Presentation:
operator
Sam it. Can we start, sir? Yes. Yes.
operator
Yeah. Okay. Ladies and gentlemen, good day and welcome to VST Limited 4K FY25 Processor Conference Call hosted by BNK securities from VST Management. We have with us today Mr. B.T. ravindra, Managing Director. Mr. Anthony Sarkara, Chief Executive Officer. Mr. Nitin Agarwal, Chief Financial Officer. At this point all participant lines will be in the reason only mode. And there will be an opportunity for you to ask questions after the management presentation and opening remarks. Also being reminded of the safe harbor the company may be making some forward looking statements that has to be understood in conjunction with the uncertainty and the risk that the company faces.
Forward to you, sir.
Antony Cherukara — Chief Executive Officer
Good morning everyone. I’m Anthony Chiragara and CEO of PSP Tillers Tractors Ltd. I’ll be doing the presentation today. Welcome once again to all of you to the call for FY25 results and the Q4 results. The agenda Macro economy key highlights. We’ll talk about the volumes, financial performance and a brief on the FY26 outlook. Especially on Q1, the product pipeline. So in terms of the macro economy, monsoon looks to be favorable. All the departments have forecasted a normal monsoon beginning on time. Hopefully the temporal and spatial distribution is going to be good which will favor the farm organization industry as a whole.
In the Caribbean season there was an effect of general elections last year in FY25 and there has been challenges in terms of international trade in the last year. But in FY26 we don’t see any effect of elections except for couple of states later in the year. And in terms of international trade the uncertainties seem to continue especially in terms of logistics challenges which will continue to pose challenges in terms of availability, costs and timely dispatches to these destinations. Some of the key highlights of last year’s performance. We have been able to grow the power beater business the way we had evinced that it will grow growth of 63%.
Similarly, the power reaper business which we started has also grown 22%. The precision component division started focusing on external business from last year and it has grown by about 71% which is good for the first year of growth. Tractor. We are back onto the growth path in tractor domestic and it was driven by the new products that was launched under power series, namely 932 specifically and 939 in the domestic market. The sales have jumped by 180%. So this gives us the confidence in terms of growing in the tractor industry going forward. In international business, while we expanded geographically, there were challenges in terms of the demand in the European market towards Q4 which affected our business.
But we entered new geographies. We entered Cyprus, Czech Republic, Russia, Angola also we have taken first steps into Turkey and Mali distribution business. We have appointed new distributors and it’s up by almost 56% in terms of our distribution capability. Coming to the sales volume for Last year in Q4 the power tiller business grew by 14.8%. We did 13,278 tillers against last year Q4 of 11,566. And in the full year while we were lagging till Q3 end, we were able to reverse the situation and get onto the growth path in Q4 and we ended with a 2.24% growth at 37,297 visa vis last year of 36,480.
On the power reaper business for the full year we have done 2403 against 1964 and the power reader business which is a new business we have started and which has just got into the third year, we have done 7458 power weeders against 4567 the previous year. Every quarter we have continued to grow in power veder which continued in Q4 as well. So we expect this business to continue to grow going forward. Tractor Business domestic we did 1030 tractors in Q4FY25 against 960 the previous year getting onto the growth path and we had a growth of 4.53% annually in the tractor domestic business.
In tractor exports while we were at par till Q3 we had a drop in terms of our dispatches into the export market due to lower demand compared to the previous year. So we did 260 tractors in Q4 FY25 visa vis 525 the previous year. Hence the shortfall in Q4 resulted in 1411 tractors in FY25 visa vis 1680 the previous year. So the only business which has dropped last year compared to the previous year is the tractor exports due to the uncertainties in the European market. Coming to the financials performance, the Total revenue in Q4 grew by 10% to 301.43 crores against 273.44 crores.
The operational EBITDA while on the absolute number has grown by 1% from 39.83 to 40.37 crores on a percentage basis we are at 13.39% in Q4 and full year revenue apart from other income remains at 994.55 crores against 968.05 crores the previous year. Registering the growth, we have got onto the growth path again. And the percentage in terms of pat is at 111.09 crores against 124.19 the previous year. And in terms of percentage it is at 11.17%. Visa was 12.83% which shows a decline of roughly about 12%. This is the operational EBITDA for the full year, not the pat.
I stand corrected. It’s the operational EBITDA which is dropped by about 13 crores. And primarily this is being the increased expense on resourcing for the future which where we have incurred these additional expenses in terms of our R and D capacity and product development capacity which we have invested in last year. If we look at pat, PAT for the quarter is excluding the impact of the fair value change on investment. Loss of rupees 3.85 crore in Q4. So FY25 compared to gain in 7.65 crore in Q4 FY24. So if you remove the fair value changes, the current year is on a rise of about a crore.
It’s a 5% rise. Roughly about a 5% rise. 29 crores and in FY25 as a whole, despite the increased investments into R and D and our product development capabilities both on OPEX and CAPEX side, the PAT effect is only about 5 crores. Current year at about 70 crores and previous year at 75 crores. So this is without the fair value change. This year is comparatively lower compared to the previous year. The gain this year is at 24.69 crore visa vis the last year the gain was 46.41 crore in fair value. Coming to a brief outlook on FY26.
Like I said before, the agencies have predicted normal or above normal monsoon. Hopefully the spatial and the timely arrival of monsoon is also critical. Hopefully that will play out normal. So we expect a healthy demand during the CARIF season. We foresee growth for small farm machines in key states. We also expect growth in tractor industry. However, given our limited presence in the higher OSPR space, we will have growth but may not be at the same rate as the industry growth. Global geopolitical challenges continue and I don’t think that change is seen in the near future.
So the logistics challenges continue and that will create a dent in terms of the time taken and the rotation of inventory that happens in the European market. Overall guidance is positive for the year. This year we would look at a quarter on quarter guidance rather than the whole year because what we have seen in the last two years is too many variables playing out on the results. Last year, for example, in Q3, Q4 the guidance given was not completely adhered to because of certain payment changes like sparsh that has happened. So we will look at a quarter to quarter guidance this year.
We expect anywhere between 20 to 30% growth in Q1. We have already had a good growth in April that continues into May and hopefully we will end up with a very Strong quarter in Q1. The operational EBITDA will continue to be in the range of 11 to 13% which we have added to in the last 34 years. The guidance is in the same range this year as well. Continued thrust on geographical and product expansion is continuing and I’ll share a couple of more details in the coming slides. In FY25 we were able to get onto the growth path in the domestic market by introduction of various variants of our existing tractors.
So we had a classic refresh, narrow tracking reduction. We had the Power series with large tyre introduced. We introduced for the first time a 30hp stage 5 tractor in the European market. Also we had narrow track in the EGT range. We launched the VST Zittor with RPTO. We launched the VST Zetor tractors in May 24th and we have also introduced the cabin tractors in Europe. The European market. Similarly on small farm machines we have brought the India made weeder 100% India made weeders Friend rotary which was launched in the market. The rear rotary is in the seeding phase last year and we will be launching it soon in the market.
And Power Reaper especially for maize crop is another product that we have launched which has given us good traction and we believe that it will give us continuous growth going forward as well. In the coming year we expect a range of launches. The tractor, the investment into RD and sourcing that we have done will help us launch several upgrades in this year on both the classic models. Upgrades in terms of engines, transmission, all developed in house on both the Classics and Series 9. In FY26. The product development for the global market, which includes India, Europe and the US continues and it is going on as per plan and we expect to launch these products not this financial year, but in FY27.
It will be three platforms with eight models with 16 variants, both gear as well as hydrostatic transmission. So there will be a slew of launches of tractors that will happen from the company in this year and the next year. Small farm machines. We are introducing more variants in the Power veder segment, both 5 horsepower and 8 horsepower variants on Power Veder. We had announced a product between Triller and tractors which we will be launching soon in the Indian market which is going to be called Score. And we will also be entering the Power Tiller and Power Weeder both on electric platforms which will also be launched in FY26.
So these are some of the product launches that we have lined up in the current financial year for small farm machines. Thank you so much. And with this we will go on to the question and answer session.
Questions and Answers:
operator
Thanks sir. Thanks for the detailed representation. Now we can move to the question answer session. So for participants who wish to ask a question I request you to please raise your hand. Alternatively participants can also type in the questions in the chat box. We’ll now wait for amount as the person who assembles and Mr. Jeraj, before.
Antony Cherukara
We start I’d also like to mention that we have posted this presentation on our website. So the numbers are visible there. This is www.vsttractors.com.
operator
Okay, thanks sir. The first question is from Naushat. You can unmute and ask your question.
Unidentified Participant
Yeah, I hope I’m audible.
operator
Yeah, very much.
Unidentified Participant
Thank you sir. First one on the. Just wanted to check last one in last one and a half two years we have we are trying to get into northern market. How’s that panning out for us especially on Taylor side. What is so far our experience there is does tiller market exist there or market is not at all accepting as we had anticipated earlier.
Antony Cherukara
I’ll give you a detailed answer Navshadji and good morning. We are experiencing good growth in the. We call IT as the 1VST market which is the northern market wherein we sell all products under one umbrella. So there is no separate dealership for tractors and dealers. It’s all under one dealer to ensure the dealers viability. So to give you a list of what we have done, we have seen tremendous growth in terms of our northern market sale. I’ll just read out the numbers just a second. Yeah. So in Power tiller from about 200 power tillers in FY24 in the last year we have sold close to 900 power tillers.
So it’s just the first year of the northern market. So we are getting tremendous response. So we will continue to build on it. And this gives us a lot of encouragement. To answer your question and this we have seen both in Power Tiller we have seen in Power reader which is again close to thousand numbers in terms of power bidder. Previously we had done just about 200 numbers.
Unidentified Participant
And how do you see this shaping up in next two years, two, three years?
Antony Cherukara
We will continue to see exponential growth in this market. So the market is accepting, the smaller marginal farmers are accepting the solution. So there is a lot of groundwork, lot of feet on the street work that is happening. We have to demonstrate the machine because awareness of these machines are low in these markets. So we are creating awareness, making it available, making it accessible, tying up with retail finance for creating affordability and also training programs to, you know, enhance the confidence and ability to use these machines. So this five pronged approach we are doing in the 1VST market.
So it is going to be uphill, but it will be continuously. Growth is what we see going forward.
Unidentified Participant
And here in north especially, what would be the mix of the financing? LED business.
Antony Cherukara
Financing is almost 70 to 80% because the subsidy doesn’t exist much. And 70 to 80% is financed, it’s one way or the other. And typically 15 to 20% is cash.
Unidentified Participant
So if north has converted 70, 80% through finance, why it is not happening in our core market? When and how long do you think it would take to, you know, reach to these kind of size?
Antony Cherukara
Yeah, so ceasing subsidies not available in the north, so there is no other avenue for the farmer but in the southern markets or the other markets. While the dependency of subsidy to purchase has gone down. But still there is a spike when subsidy is announced because they are encouraged to take it. But slowly that shift is happening. We can see from zero in the last two years we are at almost close to 10% of retail finance. Now we expect that to grow every year. This year we are expecting it to take to anywhere between 15 to 20%.
So I think that trend will continue.
Unidentified Participant
Okay. And second question on the in last previous call, as we, as you had indicated and the key raw material steel prices and all were going down and we were expecting some improvement on the gross margin side. But this quarter we have seen a decline in the gross margin. The raw material benefit is not coming. How should we look at it is.
Antony Cherukara
Primarily because of the product mix. We have got the benefit of commodity movement that definitely has come in, but the product mix has changed. And also the geographical distribution, to be specific, the sales in the Northeast and Assam and Orissa was higher in Q4 and compared to sales in the south, which kind of impacted the, you know, the pricing and hence the overall contribution. It’s not to do with commodity movement.
Unidentified Participant
But your incremental growth is also coming from those untapped market. So does that mean as if. If the new geographies grows faster you would have pressure on the gross margin?
Antony Cherukara
No. Assam in northeast is not a new market. Up Bihar, Jharkhand, all those, all Rajasthan mp. Those are new markets. So I am talking about. See there is a price difference between the southern states and the eastern states because we have discussed this before. The power tiller pricing to some extent is controlled by the subsidy pricing because we have to get approvals from the state government. So we have a slightly lower pricing in the Northeast which in fact has been corrected in quarter one. But unfortunately last year it is not. It is not so. And hence the impact on the overall contribution.
Unidentified Participant
All right sir, I’ll come back in the queue. Thank you.
Antony Cherukara
Yeah, thanks.
operator
No. Mr. Arjun. Arjun Karna, we can unmute your line and ask the question.
Unidentified Participant
Regarding the tariffs on India by the us. So given that we were exporting the chassis for Monarch tractors could you comment on what is the impact for the same for us? Did we have any sales currently in the month of April and what is our outlook on this going forward?
Antony Cherukara
Yeah, we had sales in quarter four with Monarch. However, definitely there is a tariff effect because that will play out. As we can see that it is not Monarch not only imports from India but it also imports from China as well as Mexico. So they have more impact due to China and Mexico rather than India. So I think it is. It will get sorted out as we see that the Chinese tariff is under negotiation and is kind of getting into a deal situation. So I can’t say for sure whether it will happen in Q1 or Q2.
But as it stands today I don’t see the business happening in Q1.
Unidentified Participant
Fair. Sir, for the newer platforms that you mentioned which we are launching now in FY27 US was a key market where in an earlier call you mentioned almost 2 lakh compact tractors. Size of the market versus India 50,000. Given this tariff situation earlier we were hit with very low tariffs. I think around 2 odd percent. Now minimum is expected to be 10. So does that change any of our plans in terms of the US market?
Antony Cherukara
No change in plans. We are continuing with the plan. The full effort is on, it’s on time and we will be launching in FY27.
Unidentified Participant
Sure. Sir, my second question is regarding the Zeta brand. You did talk about the 1VST market in the north. But just in terms of volumes you may not quantify the exact sales in FY25 but qualitatively how things are performing with this product and what is our outlook going Forward.
Antony Cherukara
So in the financial year FY25 the focus was to seed VST0 tractors in various markets. We have got good reports, certain higher expectations from the customers as well in terms of the features, the variants that they need. So those corrections are being done and we will be going and it’s continuing. It’s not that the sale is stopped, it’s continuing. Very positive response and we will be launching the upgrades in H2 to meet the higher expectations of the customers based on the feedback from the cd.
Unidentified Participant
Sure. In an earlier con call we had mentioned we are looking at maybe 1500 units of the higher HP40 to 50 on ZTOR. Do we maintain or has there been some correction to our expectations?
Antony Cherukara
We will be close to that number. We don’t give numbers on VST ZTOR for obvious reasons. But we are around that number only. We are not changing that.
Unidentified Participant
Sure. So my last question before I enter the queue again. Could you just run us through our current capacities for each of the segments? So interactors, power tillers, power weeders, what capacities do we have at this point in time?
Antony Cherukara
Tractors. With the one shift operation we can go up to 36,000 to 40,000 tractors. On power tiller we can go up to 60,000 to 70,000 tillers without increasing shift. And with shift we can go up to 1 lakh on power weeders. Currently we have set up a capacity to do about making India readers up to about 10,000. We will have to look at new capacity once we cross that number.
Unidentified Participant
And so the power reader capacity is fungible with power tiller. So this is over and above.
Antony Cherukara
It is over and above because slight difference in the assembly line and I would say that power beader we have to be very cost competitive and hence the logistics matter. So we will have to look at a distributed manufacturing rather than single location manufacturing.
Unidentified Participant
Sure. Thank you very much.
operator
Yeah, thanks Arjun. Mr. Pankaj ni Biwal. You can unmute and ask your question. Okay.
Unidentified Participant
Can you?
operator
Yeah, yeah, we could hear you now, sir.
Antony Cherukara
Okay.
Unidentified Participant
Okay. Thanks. Anthony. On the power tiller side, can you give us some sense on when you talk about geography expansion, you guys have done an extremely good job in Odisha for example where you have ramped up the volumes which are the other states where you think whatever you have done in Odisha can be replicated. That’s the first question.
Antony Cherukara
Yeah. So Orissa was a pilot for us and it has succeeded. So this work has now started in Tamil Nadu and in Maharashtra, in Gujarat, in Karnataka. So these are the key power dealer states. So these core markets we Will increase the presence into the taluka level. And the work that we did in Orissa will be replicated. So to begin with, first state is Tamil Nadu. Second is Maharashtra. Third will be Karnataka. And fourth will be Gujarat. In this order. So that work is on and. Yeah.
Unidentified Participant
Okay, that’s great. That’s great. The second question is on the spurs scheme. Last year, second half, there was a lot of disturbance in the way the mechanism used to work. And January, February, we saw that impact on our volumes. Is that now settled down and incrementally. Is there any other hiccups we are seeing from the scheme as you move ahead or it’s normalized now and things should be okay?
Antony Cherukara
In three states it is completed. In Tamil Nadu, it is completed. In Karnataka, it is completed. And in Orissa more or less, it is completed. In Northeast, it is still not done. So there is a bit of uncertainty in the Northeast.
Unidentified Participant
Okay, but Northeast will be a small portion of our volumes. Right.
Antony Cherukara
Assam is slightly big.
Unidentified Participant
Otherwise most of the other big states have. In terms of overall growth for this year, I know you mentioned that we are going on quarterly. But last year we ended with a marginal growth on tillers and a slight bit of flattish growth on tractors. The way things are spanning out, what will be your estimate? I mean 15, 20% growth, is it possible for the whole year the way things are looking like.
Antony Cherukara
Definitely possible. Pancakes from a possibility perspective. But moreover, I would like to say that we are at an inflection point. But the key is that we deliver this year. So we will look at it quarter on quarter and we will ensure that we deliver on a quarter on quarter basis.
Unidentified Participant
Okay, but the broad guidance which we thought about moving to say doubling of our revenues over a period of time. That remains intact, right?
Antony Cherukara
That definitely remains intact. And we will be after that. Okay.
Unidentified Participant
Okay.
Unidentified Participant
Thank you. Thank you. That’s all for me, thanks.
operator
Mr. Pankaj, next in the line will be Mr. Shrian so you can unmute and ask your question.
Unidentified Participant
Hey, good morning. Good afternoon, sir. So my question is on the higher horsepower segment, mainly ztor. So are we like in. In terms of features from what we understood from one of the dealers? Like the features very similar to, you know, the computer competition. Like mainly like the big, bigger ones like tape, Mahindra, Sonalika, those guys. So what are we facing like challenges in terms of penetrating them. Like because you know, they are actually gaining some share. So given our low base, you also mentioned that, you know, we will be growing slower than the market.
So with the low base, shouldn’t be, you know, going faster as such. So that. That’s my first question.
Antony Cherukara
Yeah, two things. See, we are talking about VST which is establishing dealer by dealer in the north Indian market and get setting up the VST ZTOR business and getting it right dealer by dealer. So ensure viability sustainability of the dealer. That is the reason I said we could be slower than the particular market in the current scenario. Will it be the same going forward? I don’t think so. Once we are able to multiply our channel, increase our variance, increase our offerings to the customers, we will be at par or faster than the market.
Unidentified Participant
Okay. Okay. So in terms of product brand like in terms of the brand recognition and penetration, you don’t see like an issue there. It’s just about adding the dealership is causing the slower pace.
Antony Cherukara
In fact, the strategy of the company to tie up with Zetor has worked favorably because the brand Zetor is well recognized in the northern market. Several of the northern markets compared to brand vst. Brand VST is quite strong in Southeast and west, but not in the north. Brand Zetor is known. That is helping us.
Unidentified Participant
Understood, Understood. And so just trying to understand the European. So you, you market. So you, you mentioned that there’s a lot of uncertainty also the market is smaller in terms of, you know, compared to India in terms of volumes, I believe. So what. Why are we, you know, focusing so much on trying to launch so many products geared towards Europe versus the Indian market like with 30 to 50 horsepower like itself is like 5 lakh factors in that sense.
Antony Cherukara
Yeah.
Unidentified Participant
So trying to understand what the strategy.
Antony Cherukara
Yeah. So two aspects to this question. One is the core strength of the company. VST is in compact trackers and the European market size on compact tractors is similar to India. It is not smaller than India in terms of the compact tractors alone. So there we have a strong play point, number one. And also we are looking at it globally, eventually in the US market as well, which is much, much larger in size as an industry than the Indian market. So that is our core, which is the compact tractor zone. One reason is that second is the margins are much better in the international market compared to the Indian market.
Unidentified Participant
Got it. Okay. So but even in the European market, like you mentioned that, okay, we are just exporting like around 250 a quarter, like at least this quarter. So if it’s that small of a base and the market size is as big as India, then why are we facing, you know, challenges in terms of export sales is like. I’m just trying to understand where are we not able to penetrate the market.
Antony Cherukara
Yeah.
Unidentified Participant
So product profile.
Antony Cherukara
No, let us understand completely. We were four years back, we were at 300, 400. Now we are consistently above 1400, 1500 kind of numbers for the last two, three years. The key aspects to grow further will be further entry into European markets, namely Nordic countries and more of Eastern Europe. Second is product offerings. Right. So we had offerings only in the 20 to 25 horsepower space. So typically, or rather 18 horsepower. So we had an 18 horsepower at 22 horsepower and a 24 horsepower offering. That is the only offering that we had in the European market.
Now we have a 30 horsepower offering which we have introduced end of March. Now we have a 35 horsepower offering. So 30, 35 horsepower offering. And with the global platform coming in, we will have almost seven more nodes of offering that we will be able to give the European market. So to answer your question, we were working with this three nodes, three models, 18, 22 and 24, we have introduced in the end of March one more model which is a 30hp stage 5. We are introducing the 35hp also this year. So we will have two more nodes and going forward we will have with the global platform, furthermore nodes which will give us growth, so distribution as well as product availability.
To answer your question.
Unidentified Participant
Perfect.
Unidentified Participant
That, that’s very helpful. So, so just last question on the smaller horsepower. So should we think through like our penetration in the smaller horsepower segment in India? Like have we like almost saturated that like we should expect, you know, industry level growth or we should be able to penetrate that more, or how do you think about the Indian markets on that?
Antony Cherukara
In the combat tractor segment last several years, the industry has not grown the smaller horsepower. So the growth is seen between 30 to 50 horsepower. So 30 to 40 and 40 to 50. 40 to 50 has grown faster than 30 to 40 also, but the smaller horsepower has not grown.
Unidentified Participant
Okay, okay. So do we see like that as a structural shift in like the preferences.
Antony Cherukara
Or is that, you know, we anticipate a structural shift with the coming of stage five.
Unidentified Participant
Got it. Okay. Okay. So we should see the higher horsepower selling more.
Antony Cherukara
Eventually then higher horsepower will continue to sell. But stage five creates a, you know, higher cost. Almost 25 to 30% cost is what is being estimated which will go up. So the higher price tractor, higher horsepower tractors will become very expensive. We see that there will be anticipate a shift towards lower HP four wheel drive tractors to meet the same applications.
Unidentified Participant
Oh, oh. Okay. Okay. All right, Understood. Thank you so much. That’s all I had.
operator
Mr. Science. Next in the line will be. Mr. Kushnagar, you can unmute and ask your question.
Unidentified Participant
So first if you can elaborate more on this first scheme like you know for tillers how they have helped us and change the dynamics of the industry in terms of maybe number of states which are pending and what is the scheme about. Secondly, so on the precision segment. So since we have. Since we have had a very strong growth this year also. So going ahead how do we see this shaping up in the next say two to three years. And lastly if you could help us with some ZTOR numbers that we have sold in terms of volume in FY25 and going ahead what do we expect?
Antony Cherukara
Yeah, so I start with the last question first. So like I have said before we don’t give out the zetor numbers. I can say it is going as per plan and we are growing. We will continue to grow the zetor business because that is where the segment higher growth segment is in tractors. However we will have to build the network and give more product offerings in the market that work is on. So it’s a long term work. Coming to your second question which is the precision component business. We have a precision components factory based out of Mysore which used to focus only on internal business, internal requirements of VST where we have state of the art machining setup, machining centers.
So this last year onwards we have started focusing on external business. So the first year we have got good business. We will continue to grow and explore the China plus one opportunity that is emerging. We expect this business to continue to grow. And coming to the sparse scheme, the details of the sparse scheme. This is not a VST scheme, it’s a government scheme which definitely will help in the long term wherein the government has created a payment mechanism of subsidy where the center and state governments will work in tandem. So as the state governments process the payment of subsidy of farmer the process flow includes the central government automatically and hence separate utilization report is not required in the future.
So this implementation took some time and it cost the payment flow to stop. For all the subsidy schemes this affected the cash flow for all the companies especially as because we are almost 75 to 80% of the tiller market. This affected us badly in the month of January and February. This more or less now is implemented in most states except some critical states like Assam and Northeast which hopefully will also get implemented very soon. Yeah, hope I have answered your question.
operator
Yeah, he is mute in the lines. Your Questions are answered Mr. Kush. We will move to the next caller. Next will be a follow up question. From Mr. Nad, please unmute and ask your question.
Antony Cherukara
Yeah.
Unidentified Participant
Hi. A couple of follow ups. Sir, first on you indicated that you believe the company is at inflection point. Can you highlight what are the key factors that makes you believe that we are at inflection point?
Antony Cherukara
So the. We have a straight strategy of working on the various verticals. Small farm machines move from power tiller becoming a full range player in small farm mechanization space. We have started that, we have progressed on that. Now the scale up is to happen in the next few years. That is point number one, point number two in the tractor space. From a company with just one platform of classic model. We have in the last four years developed our R and D and sourcing capability and built multiple platforms to grow globally in the combat tractor space.
And the results of that is coming out. Like I said to this previous speaker, the new nodes that we are operating in, 30 SP, 35 SP in the European market. Going forward, our ability to launch another six nodes in the Indian, European and the US market in the compact tractor space. So that gives me the confidence in the tractor segment along with the VST ZITOR work that we are happening which is happening on hsp. The distribution business which was started two years back, which is completely digital based on distribution, got into electric pumps. We are at around 10 to 15 crores kind of business currently which will also scale up, which is scaling up up with the addition of new distributors.
New distribution Number four is the precision component business that we spoke about where we are not only focusing on internal business today, but also focusing on external business which we see a good opportunity with the China plus one opportunity that is emerging. So on several fronts. On all projects that we launched three years back, we are more or less at the monetization stage. So with the product expansion and the geographical expansion that we are doing, we made the statement, or rather I made the statement that we are at an inflection point.
Unidentified Participant
Interesting, sir. Second, on the inorganic opportunity, I think few quarters back also we have indicated that.
Antony Cherukara
I hope I have answered your question because I can’t hear you.
Unidentified Participant
Hi. Am I audible?
Antony Cherukara
Are we still connected? Yes.
Unidentified Participant
Am I audible?
operator
Sir?
Unidentified Participant
J. Am I audible?
operator
Yeah, you’re audible.
Antony Cherukara
Are you there or.
operator
Yeah, yeah, I’m there.
Antony Cherukara
Sir, is there a problem in the line? No, no.
operator
We could hear you, sir. Hello?
Unidentified Participant
Sir, NI said can you hear my voice? Sir. Anthony. Sir.
Antony Cherukara
Hello, can you hear us?
operator
Hello?
Antony Cherukara
Just call him. Call him on the phone.
operator
No, no, I. We could hear you, sir. Sir, we could hear you. Sir.
Antony Cherukara
Can you hear us Mr. Jaraj, what is the problem? They can hear us. Okay.
operator
Participant just be on the line. I have requested the management to log out and login again. They are not able to hear us. Just be wait for one. One, one or two. You could hear us sir?
Antony Cherukara
Yes, it is now. Now you are audible.
operator
Yeah, yeah we can. You can go ahead sir again maybe.
Antony Cherukara
Yeah. I hope the previous question was audible and it was answered to the satisfaction of the.
operator
Yeah, yeah. Now you can now confirm. I don’t know, I think.
Unidentified Participant
Yeah. Hi. Hi. Thanks for unmuting me. So second one was on the inorganic opportunity we have been indicating and that we are evaluating inorganic or we were working on some new allied products which you might announce in second half 25. So just wanted to check what is the status there and what exactly we are evaluating if you can.
Antony Cherukara
You know sir, there is nothing concrete yet to announce so I’m not able to say. But definitely we are looking at opportunities.
Unidentified Participant
Okay. And we were also evaluating to go to I think Bangladesh market if I’m not wrong. So what is the status there? What is the size of that market and what will be the largest player size there? Just wanted to understand from a scale.
Antony Cherukara
Point of view Power tiller market is roughly about 70,000 tillers per annum in Bangladesh predominantly dominated by the Chinese products. Because of the political situation we had a setback last year. Hopefully we are working. We are working even now. But there are some hurdles still the political scenario is not in our favor. Hopefully we should be able to get a breakthrough this year. We are trying.
Unidentified Participant
And last on on our in house we there manufacturing capacity do you think 26 we will see the full ramp up?
Antony Cherukara
Yeah Veeder we will continue to grow at a faster pace like I have said before. So last year was close to 8,000 Vedas. Now we expect to continue the growth this year as well. One aspect will be to increase the production in India. The ramp up it will not be hundred percent the India made this year but in the next two years it will become 100% India made up. So until then we will have some partial capacity still available and once that is done maybe going forward we will have to look at additional capacity.
Unidentified Participant
And does in house manufacturing offer us better margin or what exactly? In what business parameter it help us in terms of importing versus making it in house.
Antony Cherukara
If you consider the total cost to the company in terms of the purchase price, the transportation, the inventory stocking, you know if you consider the total cost and then the India made product I would say it is at Par so the margins will more or less be the same. The advantage is we eliminate all the uncertainties of shipping from China. Uncertainties in terms of quality consistency from China, uncertainties in terms of the various political geopolitical situations that arise on and off with China. So we kind of want to eliminate that completely also. We want to become the hub for small farm machines which we have said before and start eventually exporting these products.
That is where the electric tiller, electric weeder, completely electric platforms are coming in this year. So we are looking at not only selling in India but also exporting these products eventually into European and the other markets.
Unidentified Participant
Is there any global benchmark company which you know expire or see just from a scale point of view if you can, you know, visualize how others have done in a small farm, in small.
Antony Cherukara
Farm mechanization there are several companies in Europe, family owned enterprises. There is some Japanese companies, some Taiwanese companies, but no real benchmarks I would say unlike the tractor industry. So it is mostly family owned but large size compared decently sized companies.
Unidentified Participant
All right sir, thank you so much. All the best.
operator
Thanks. No Shad, there is a follow up question from Mr. Arjun Khanna. Please unmute and ask your question.
Unidentified Participant
Thank you sir. My first question is on a receivable. So if I look at a balance sheet I see the number of receivables up significantly year on year. Now is this that we had very good sales in March and that’s the reason and it should come down possibly by next March or is there something else one needs to read into this Arjun?
Antony Cherukara
We had a 59 days outstanding the previous year we are at currently 75 days. But if you look at quarter three we were at 81 days and in quarter two I think we were at around 88 days. So from 88 we have brought it down to 75. So why we had to do this? I’ve explained earlier we had to support the dealers to tide over the sparse situation when the cash flow was not happening. Because I have explained that before what was happening and hence we had to support the dealers and hence increase the receivables.
We have been able to bring it down to 76 days. That journey downwards will continue. We will have to balance between supporting the dealers, gaining volume growth and as well as bringing more efficiency into our retails. But definitely the graph is downward on receivables.
Unidentified Participant
So if I look at say 22, FY22 we were at just 30 days and I get that 23, 24 were around 50 odd days currently which you mentioned at 70, we will be around that. We will be around that, around 60. Is that the right understanding?
Antony Cherukara
Yeah, around. Around 50 to 60. We’ll be around there.
Unidentified Participant
Sure. Sir, the second question is in terms of the scores you mentioned, we’re launching a new platform on the small farm segment side. So do we need new capacity for this? Our current capacity is fungible. And what kind of numbers would one look at it in terms of the total addressable market?
Antony Cherukara
Current capacity is fungible. It’s a new category. There is no existing, you know, except one player who has a similar product in the market. But I think it’s a new category creation between tillers and tractors. One advantage that we have is we operate in the tiller space and we operate in the tractor space. So understand both the segments of market and we believe that we will be able to address what the farmer wants. So that gives us a confidence. But I think we will wait until we get there. Right. In terms of. Because it’s a new category creation, to give you an exact number at this point is difficult.
Unidentified Participant
Fair enough, sir. Just to understand this point on this small farm mechanization because we had announced a joint venture with Kobayashi for blades, nothing we have seen on the Kobashi.
Antony Cherukara
Were contemplating a jv. We didn’t announce it in terms of a jv. We have dropped the JV because we didn’t see the scale up happening to the extent that BST’s growth ambitions are in this particular segment. So we did a lot of work and finally we decided to drop that project.
Unidentified Participant
Sure. Given that cash continues to accumulate on our balance sheet. So any M and A activity etc.
Antony Cherukara
On the Anvil, lot of work happening on that front. Hopefully in the next two years. Like I’ve said before in the last quarter also I said next two years we should be able to do at least one deal.
Unidentified Participant
Sure. Wishing you all the best, sir.
Antony Cherukara
Thank you.
operator
Yeah, due to lack of time. That will be the last question. Sir, do you want to make any closing comments, Sir?
Antony Cherukara
Thank you everyone for being present today and look forward to meeting you in the next quarter.
operator
Thank you so much on behalf of BNK securities. We thank all the participants for joining the call and special thanks to VSC Tels Management for taking time out for the call and giving us the opportunity to host the call. Have a good day. We can now disconnect your lines.