MTL expected to climb to Rs650/share by Dec 2025

July 16, 2025 (MLN): Millat Tractors Ltd (PSX: MTL) is well-positioned to offer an upside potential of 14%, with a target price of Rs650/share by December 2025, driven by a pick-up in demand and earnings. 

According to the estimates shared by Taurus Securities Limited, the outlook is bolstered by the Punjab Government’s recently launched Phase-II of the Green Tractor Scheme, alongside improving farm economics through initiatives like the Kissan Card.

Under the scheme, 20,000 tractors are slated for distribution, split evenly between 50–65HP models with a Rs500,000 subsidy and 75–125HP models with a Rs1 million subsidy. 

With MTL’s dominant 64% market share and a product line closely aligned to these segments, the company is expected to capture a significant portion of this demand.

Deliveries are likely to commence in 2QFY26, with applications opening in August 2025, setting the stage for robust sales growth in FY26. 

Additionally, expectations of better margins and reduced finance costs add to the upbeat outlook for MTL.

Phase-II rollout to drive volumes and profitability

MTL offers products in both categories, giving it a strong chance to win a large share.

The brokerage firm believes Phase-II could add 8,000–10,000 extra units to MTL’s FY26 sales. This may contribute around Rs14–17/share to earnings.

Phase-I had already delivered a big boost. It helped MTL end FY25 with 18,580 units well above the earlier estimate of 14,500.

The scheme also played a key role in reviving overall tractor sales in the market.

The company reported revenue of around Rs40 billion in 9MFY25, marking a 43% year-on-year decline due to soft farm economics and sales tax disruptions.

Higher finance costs also weighed on profitability. Still, the rollout of Phase-I in Nov–Dec 2024 helped stabilize volumes and provided some relief to earnings amid a challenging year.

The brokerage remains optimistic on MTL, with expectations of demand recovery supported by broader Agri-sector incentives such as the enhanced Rs123 billion allocation for agriculture in Punjab’s FY26 budget and the Kissan Card initiative.

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