FIRST ASIA SECURITIES
PakistanSri LankaPREV
EquitiesFixed Income
DATA AS OF 13 JUL 2026 · EOD

MTL

Millat Tractors
AUTOMOBILES

LAST · PKR

294.42
−4.25 ▼ −1.42%
P/E 16.8× · YIELD 9.6% · ROE 91.2%

52W RANGE

248.42323.00
62% OF RANGE · YTD +7.5%
01 / MTL — 1 YearAS OF 13 JUL 2026 · EOD
PERIOD 1Y · 250 SESSIONS▲
The Call
NEUTRAL+12%
330.00PKR · 12-MO
~16× FY26E

Farm recovery lifts volumes; yield carries the return.

Risks to our view
02 /

FAS DESK · FIRST ASIA SECURITIES RESEARCH · 23 JUN 2026 · EOD

A 91% ROE monopoly — but the price is full

  1. 01

    Neutral, PKR 330 target: MTL earns an extraordinary 91% ROE with a 9.6% yield and ~60% tractor share — but at 16.8× the asset-light quality is fully priced.

  2. 02

    Falling rates and improving crop economics revive agri credit and tractor off-take, where MTL dominates.

  3. 03

    The cash-generative, asset-light model funds a high payout through the cycle.

  4. 04

    At ~16× FY26E the target is PKR 330 — the 9.6% yield is the return; we would buy a pull-back, not the premium.

Where we differ from the street
Street viewOur viewWe change our mind if
Near 52-week highs and a high multiple leave little upside.A 91% ROE monopoly earns a premium, but 16.8× already credits it; the return is the dividend.Off-take accelerating beyond expectations, or a pull-back.
Subsidy and crop-price swings make it volatile.Cyclical, but MTL's share and cost position make it the quality way to own the cycle.A subsidy withdrawal that depresses off-take.
A peak farm cycle flatters returns.Asset-light economics keep ROE structurally high, but that strength is in the multiple.A capex cycle or margin compression denting returns.

— FIRST ASIA SECURITIES RESEARCH · NOT INVESTMENT ADVICE