Financial Performance Summary

Q2 FY27 Results (Quarter Ended September 2026)

  • Revenue: INR 321.6 crores (vs. INR 315 crores in Q2 FY26), representing 2% YoY growth
  • Operational EBITDA: INR 35.1 crores at 11% margin (vs. INR 40.9 crores at 13% margin in Q2 FY26)
  • PAT: INR 22.8 crores (vs. INR 25.4 crores in Q2 FY26)
  • Operational EBITDA Definition: EBITDA excluding other income and fair value changes (gains/losses)

H1 FY27 Performance (April-September 2026)

  • Revenue: INR 635 crores (vs. INR 597 crores in H1 FY26), representing 6% YoY growth
  • Operational EBITDA: 12% margin (vs. 13% in H1 FY26)
  • PAT: INR 71.5 crores (vs. INR 69.9 crores in H1 FY26)

Sales Volume Performance

Q2 FY27 Volume Data

  • Power Tillers: 13,357 units (+2% YoY)
  • Tractor Domestic: 940 units
  • Tractor Exports: 226 units
  • Power Weeders: 2,396 units
  • Power Reapers: 1,143 units

H1 FY27 Volume Data

  • Power Tillers: 27,158 units (+9% YoY)
  • Tractor Domestic: 1,925 units
  • Tractor Exports: 501 units
  • Power Weeders: 6,076 units (+22% YoY)
  • Power Reapers: 1,171 units

Management Commentary and Business Outlook

Margin Pressure

  • 200 bps EBITDA margin decline in Q2 primarily due to raw material cost inflation from commodity price increases over past 2 quarters
  • 100 bps EBITDA margin decline at H1 level

Power Tiller Business

  • Continued growth expected in H2 FY27
  • Strong government order pipeline supporting growth

Small Farm Machines (SFM) Segment

  • Power Weeders: Expected to accelerate to 40%+ growth in H2 FY27 (targeting 40% growth over last year's ~10,000 units)
  • Power Reapers: Seasonal business delayed due to delayed monsoon; growth expected in Q3 FY27
  • Overall SFM: Double-digit growth expected for full year FY27

Tractor Business Outlook

  • Domestic: Expected to be flat for FY27 (currently -4% in H1)
  • Key markets Maharashtra (40% of compact tractor business) and Northern Karnataka under severe drought
  • Competition in Gujarat selling at lower prices for past 2-3 months (expected to discontinue)
  • Growth in northern regions but insufficient to compensate for Maharashtra decline
  • Exports: Expected to become flat for FY27 (currently negative)
  • Netherlands warehouse established to address logistics challenges (60-90 days reduced to 2 weeks target)
  • First shipments to Netherlands expected by end of Q3 FY27
  • Full operations expected in Q4 FY27

Distribution Business

  • Growing at over 20% annually

Regional Performance Context

  • Eastern states (Orissa, Assam, Tamil Nadu, Andhra) received good rainfall - strong markets for power tillers, weeders, and reapers
  • Maharashtra (Solapur region) and Northern Karnataka severely affected by drought - impacting compact tractor sales
  • Southern Karnataka, Tamil Nadu, Andhra, Orissa performing well despite Andhra cyclone temporary impact

New Product Launches and Expansion

Score Platform Launch (November-December 2026)

  • Product positioned between power tiller and tractor
  • Target price similar to tiller with tractor comfort and tiller functionality
  • Target market: Small and marginal farmers in dry areas (sugarcane, orchards) rather than paddy-dominated regions
  • FY27 volume target: 500 units
  • Expected to gain traction in coming financial year

Rear Rotary Power Weeders Launch

  • High demand product in India
  • Expected to significantly accelerate power weeder growth

Future Tractor Launches

  • 4-wheel drive higher horsepower tractor (end of FY27)
  • Global platform for India, Europe, and US markets (Q4 FY27)
  • Not expected to contribute significantly to FY27 volumes

Zetor Tractor Performance

  • Growing at 40-50% over last year in H1
  • Expected to continue strong growth but insufficient to fully compensate for Maharashtra decline

Market Expansion Strategy

  • Current network: 800+ dealerships, 1,000+ counters
  • Target: 2,000+ counters by end of FY27
  • Implementing omnichannel strategy combining digital inquiry generation with brick-and-mortar delivery
  • Focus on penetrating small and marginal farmer segment with significant growth potential

Working Capital and Inventory

  • Temporary increase in inventory due to TREM V changes and commodity fluctuations
  • Receivables increase not related to government subsidy delays
  • Expected to normalize in Q3 and Q4

Retail Financing

  • Current financing penetration: 11-12%
  • Target: 15% by year-end (originally targeted 20%)
  • Financing partners include NBFCs and banks

Pricing Actions

  • Implemented 2 price hikes in FY27 across power tillers and tractors
  • Evaluating further price hikes due to commodity cost pressures
  • Some competitors already announced November price hikes
  • Monitoring crude oil price developments for future decisions

European Market Strategy

  • Netherlands warehouse to address 60-90 day logistics challenge
  • Target delivery time reduction to 2 weeks
  • Enable faster inventory rotation for distributors
  • Facilitate trial orders to other European markets