Millat Tractors Reports Strong Quarterly Growth as Sales Rise 38%

Millat Tractors Limited has reported a strong financial performance for the first quarter of FY2026-27, supported by higher tractor sales, improved market demand and government incentives for farmers. The company’s latest financial results show significant growth in revenue and profitability for the three months ended September 30, 2026.

According to the company’s unaudited financial statements, Millat Tractors sold 3,013 tractors during the quarter, compared with 2,177 units in the corresponding period last year, representing an increase of 38.4%.

The company’s net sales also increased substantially, reaching Rs. 10.92 billion compared with Rs. 7.55 billion in the same quarter of the previous year. This reflects year-on-year growth of 44.7%, highlighting the improvement in business activity and demand for agricultural machinery.

Profitability Shows Significant Improvement

Millat Tractors recorded a standalone profit after tax of Rs. 980.62 million during the quarter, compared with Rs. 513.59 million in the corresponding period last year.

Earnings per share (EPS) increased to Rs. 2.46 from Rs. 1.29, reflecting stronger earnings performance. Gross profit also improved to Rs. 2.96 billion from Rs. 2.05 billion in the previous year’s corresponding quarter.

At the consolidated level, the Millat Group reported revenue of Rs. 11.11 billion, compared with Rs. 7.78 billion last year. Consolidated profit after tax stood at Rs. 940.64 million against Rs. 613.46 million, while consolidated EPS improved to Rs. 2.36 from Rs. 1.54.

These results indicate improved performance across the group’s operations, although higher administrative and operating expenses remain important factors to monitor.

Government Subsidies Support Tractor Demand

The recovery in Pakistan’s tractor market has been supported by government initiatives aimed at improving agricultural productivity and encouraging farm mechanization.

During the quarter, total tractor industry sales reached 4,109 units, representing an increase of approximately 38% compared with the same period last year. Demand gained further momentum in September 2026, when industry sales reached 1,815 units, more than double the sales recorded in September 2025.

The Punjab Government also launched Phase IV of its Green Tractor Scheme, offering subsidies of Rs. 750,000 per tractor for 10,000 tractors in the 50 to 65 horsepower category.

Additionally, applications were invited for Phase V, covering 9,500 tractors in the 75 to 125 horsepower category, with a subsidy of Rs. 1 million per tractor.

These initiatives are expected to encourage farmers to purchase modern agricultural equipment and provide further support to tractor manufacturers.

Outstanding Sales Tax Refunds Remain a Challenge

Despite the improvement in sales and profitability, Millat Tractors continues to face working capital and liquidity challenges due to outstanding sales tax refunds.

The company’s sales tax refunds and receivables stood at approximately Rs. 7.97 billion as of September 30, 2026. The delay in receiving these amounts has increased the company’s reliance on bank financing to support its operational requirements.

Consequently, additional finance costs continue to affect the company’s financial position. Short-term borrowings increased to Rs. 12.74 billion at the end of September 2026, compared with Rs. 10.61 billion at June 30, 2026.

The timely settlement of outstanding tax refunds could help improve liquidity and reduce the company’s financing burden.

Strategic Partnership to Expand Agricultural Machinery Portfolio

An important development during the quarter was Millat Tractors’ distribution agreement with China’s Weichai Lovol Intelligent Agricultural Technology Co. Ltd., signed in September 2026.

Under the agreement, Millat Tractors will distribute Lovol’s advanced agricultural machinery in Pakistan. The partnership is expected to expand the company’s product portfolio and strengthen its presence in the agricultural machinery market.

The move also supports Pakistan’s broader objective of modernizing agricultural practices, improving farm productivity and strengthening food security.

By introducing additional machinery and technological solutions, Millat Tractors aims to explore new business opportunities beyond its traditional tractor operations.

Outlook: Positive Demand Prospects for Coming Months

Looking ahead, Millat Tractors expects the remaining phases of the Green Tractor Scheme and the upcoming Rabi cropping season to support demand for agricultural machinery.

The company’s improved sales performance, stronger profitability and new international partnership provide a positive foundation for future growth.

However, the sustainability of this performance will depend on several factors, including government support for farmers, timely payment of sales tax refunds, borrowing costs and fluctuations in international energy prices.

The company also highlighted that geopolitical tensions in the Middle East have kept international energy prices volatile, creating potential risks for production costs and inflation.

Overall, Millat Tractors has started FY2026-27 with encouraging financial results. Stronger tractor sales, higher revenue and improved earnings reflect a recovery in market demand. If government incentives continue and liquidity pressures ease, the company could benefit from further growth in Pakistan’s agricultural mechanization sector.