<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We initiate coverage on Pakistan Tractor Industry with an
‘Overweight’ stance. Our investment case on the sector is premised on i)
growing tractor industry backed by improved farm economics, ii) low market
penetration in both tractors and implements, iii) increasing tractor hiring
services, iv) favorable GST, v) subsidy on tractor, vi) lower threat from
international players and vii) extremely high degree of localization.
Resultantly, we expect the tractor demand to grow at a 3yr CAGR of ~13%.
Though, capacity constraints for the largest player (MTL with ~62% market
share) seems to be a dampener, however, AGTL will stand to benefit from it by
grabbing MTL’s market share. Thus, we have AGTL as our top pick in the sector
with a targe...
