Lahore: Millat Tractor Limited (MTL) has revised its earnings expectations for the fiscal years 2026 to 2028 significantly upward, according to a recent press release from JS Global. The changes reflect an average increase of approximately 45% in earnings projections, attributed to higher-than-expected gross profit margins. The company's stance has been upgraded from sell to buy, with the target price for June 2027 set at Rs639 per share, offering a potential upside of 26.2%, including a 12% dividend yield.
According to JS Global, the revision in gross profit margins is based on recent quarters' results, where margins averaged 37%, compared to a previous expectation of 24%. This improvement is attributed to cost control measures, the merger of the tractor business with Millat Equipment Limited, and increased tractor prices. The merger received approval from the Lahore High Court in February 2025. Additionally, improving farm income and rising crop prices are expected to boost tractor sales by 30% in FY27 and 10% in FY28, although these figures remain below the peak sales of FY18.
The company has also announced a new business venture into the electric bike market. At an Extraordinary General Meeting on June 5, 2026, MTL received approval for a stock split and financing support for the E-Bike project. Millat Industrial Products Limited, an MTL subsidiary, has signed a Memorandum of Understanding with Xiadau Electric Co., Ltd., a Chinese electric mobility company, to assemble, manufacture, and market electric bikes in Pakistan. This initiative aligns with the national policy supporting electric vehicles.
The assembly plant for the E-Bike project is currently being dispatched from China, with installation expected within the next few months and the first rollout anticipated in September or October 2026. The initial annual capacity is projected to be 50,000 units, with the potential for expansion. While initial sales are expected to be limited, the company views this as a high-growth segment, supported by the development of electric vehicle infrastructure in Pakistan.