VST Tillers Tractors Ltd. has an aggressive growth outlook as the maker of farm equipment does not expect a slowing economy to hamper demand for its products.
The company faced some delays in the revenue projects due to the economic conditions and this affected the timelines of the business, Antony Cherukara, chief executive officer at the company, told BQ Prime's Niraj Shah in an interview. But the company is looking "for a compounded annual growth rate of 40% in three years".
The company has witnessed a 20% growth in power tillers business and expects this to continue for the next two–three years, according to Cherukara.
Cherukara's optimism contrasts with concerns about slowing growth in the near term. While the rural economy is showing delayed signs of a pick-up, India is expected feel some pain as central banks suppress demand to contain runaway inflation. Even more so when heatwaves are expected to hurt crops and there is a risk of an El Nino.
Tractors
Still, Cherukara expects the tractor business to grow faster than industry as the company is entering into utility tractor space and already has a "good presence" in compact tractors. Having entered Europe, VST Tillers is focusing on expanding the tractors business globally.
While there are many competitors, VST Tillers is looking at margin-based play, Cherukara said. "We are focusing on creating unique customer experience and building great service for customers".
Power Tillers
About 80% of farmers in India are small and marginal and that has helped in the growth of power tiller business, Cherukara said. The company continue to focus on this segment, he added. "We have 60-65% of the market share in this sector, and we are driving the growth."
"We launched three-four products in the last couple of years which is giving us good return and response, and more innovative products are coming in the near future," he said. "The company is looking at a growth of 30%".
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