Indo Farm Equipment Limited — Q4 FY25 earnings call

Call held 30 Jun 2025

Management summary

Indo Farm Equip. reported a robust Q4 and FY25, driven by strong consolidated revenue and PAT. The company is embarking on significant capacity expansion for pick and carry cranes and entering the tower crane segment through technology acquisition. Strategic initiatives include aggressive dealer network expansion and marketing to improve tractor sales, with ambitious growth and profitability targets set for FY26 and FY27, despite current low tractor capacity utilization and some operational challenges.

Highlights

  • Strong Q4 and FY25 financial performance with consolidated revenue of ₹129.97 crores and PAT of ₹13.51 crores for the quarter.

  • Significant capacity expansion planned for pick and carry cranes, adding 3,600 units per annum, reinforcing long-term vision.

  • Strategic move into tower crane technology through a one-time payment agreement, with first assembly expected by January 2026.

  • Aggressive dealer network expansion plan to add 500 dealers in the next 3 years to boost tractor sales.

  • Targeting 30% overall growth for FY26 and an improved PAT margin of 8-9% by FY27.

Concerns

  • Tractor capacity utilization is currently low at around 30%, requiring increased marketing efforts.

  • A pending MSME court case regarding a disputed amount of ₹8 lakhs, though management considers it a normal process.

  • Tractor sales in FY25 were affected by a government order in FY24, poor market conditions in North India, and election impact.

Key financials

  1. Revenue (Consolidated) Q4 ₹129.97 Cr
  2. Revenue (Consolidated) FY25 ₹387.19 Cr
  3. PAT (Consolidated) Q4 ₹13.51 Cr
  4. PAT (Consolidated) FY25 ₹23.55 Cr
  5. NBFC AUM (31st March) ₹131 Cr
  6. NBFC Gross NPA 4%
  7. NBFC Net NPA 3%

What they filed

Q1 FY27: revenue up 15.0%, net profit up 10.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue81 91 125 91 99 +22%101 +11%129 +3%105 +15%
EBITDA10 12 16 10 11 +2%11 −11%17 +5%12 +16%
Net profit3 4 13 5 4 +31%5 +24%8 −38%5 +10%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹70 Cr
    • New manufacturing facility for pick and carry cranes (plant and machinery) ₹70 Cr
    • Land and building for new facility
    • Acquisition of Tower Crane technology (one-time payment)
    Mr. RS Khadwalia: It's 70 crore in the plant and machinery only land we have earlier acquired. ... We are going to spend this whole amount by December, January.
  • Debt Debt disclosed
    Mr. RS Khadwalia: The figure is closing 131 is the AUM. ... Gross NPA is 4.05%, and Net NPA is 2.96.

Guidance & targets

Revenue

  • Revenue from new Capex facility (Q4 FY26) Revenue · Q4 FY26 · Medium confidence ₹40-50 crores
    In the last quarter we are expecting around 40 to 50 cr, from that plant.

    — Mr. RS Khadwalia

Capacity

  • New pick and carry crane capacity Capacity · per annum · High confidence 3,600 numbers
    Our new manufacturing facility being set up is in progress. Well the expansion will significantly enhance our production capacity of pick and carry cranes by 3,600 numbers per annum.

    — Mr. RS Khadwalia

Capacity Utilization

  • New facility capacity utilization Capacity Utilization · FY27 · Medium confidence 50%
    But in the 1st year, the capacity utilization in the 26-27, the capacity utilization we are expecting around 50% capacity utilization.

    — Mr. RS Khadwalia

Growth

  • Overall growth (tractor and crane) Growth · FY26 · High confidence 30%
    For FY 26, you know. Here we are planning around the existing facility we are expecting to grow around 30% in tractor and crane together.

    — Mr. RS Khadwalia

Profitability

  • PAT margin Profitability · FY27 · Medium confidence 8-9%
    It is, it is, you know, as our utilization increase. We are expecting around 8 to 9% in this next year. ... It is in the 26-27.

    — Mr. RS Khadwalia

Market Share

  • Dealer network expansion Market Share · next 3 years · High confidence 500 dealers
    We aim to create a Dealer Development Department and add 500 dealers in the next 3 years.

    — Mr. Anshul Khadwalia

Volume

  • Tractor volume CAGR Volume · next few years · Medium confidence 20-25%
    So we are targeting a 20-25% CAGR tractor volume for the next few years. Right, would that be a correct understanding? Yes, sir, that's a fair way to understand.

    — Mr. Anshul Khadwalia

  • Tractor sales growth (current year) Volume · this year · High confidence 30%
    And this year we are looking at a 30% increase in our numbers

    — Mr. Anshul Khadwalia

  • Tractor sales growth (next year) Volume · next year · High confidence 25%
    and we'll be able to maintain it 25 years, the 25%, the year after

    — Mr. Anshul Khadwalia

  • Tractor sales growth (year after next) Volume · year after next · High confidence 20%
    and 20% the year after.

    — Mr. Anshul Khadwalia

  • Pick and carry segment growth Volume · FY26 · High confidence 30%
    I'm saying in pick and carry segment, can we achieve a 30% growth in FY 26. Also. Yes, yes, we are expecting around 30%.

    — Mr. RS Khadwalia

Financing

  • NBFC financing for tractor sales Financing · Medium confidence 25-35%
    So, sir, we feel that this ratio will somewhere be anything in the range of 25 to 35%.

    — Mr. Anshul Khadwalia

What to watch in Q1 FY26

New Crane Manufacturing Facility Start

Q3 FY26
Current Under construction
Target Production commencement

Why it matters

Crucial for realizing the planned capacity expansion and revenue contribution from the new facility.

Mr. RS Khadwalia: This is in this financial year. 3rd quarter we are expected to start the production facilities

Risks & concerns

  • Low tractor capacity utilization

    medium

    Current tractor capacity utilization is around 30%, requiring increased marketing efforts to boost sales.

    Management acknowledged

  • Tractor sales decline in FY25

    medium

    Tractor sales in FY25 were impacted by a government order in FY24, poor market conditions in North India, and the general election period.

    Analyst acknowledged

  • MSME court case

    low

    A dispute with an MSME vendor over ₹8 lakhs is in High Court, but management considers it a normal business process with no major issue.

    Analyst downplayed

  • High soil filling and leveling cost for new plant

    low

    The cost of soil filling and leveling for the new plant (₹25 lakhs per acre) is high due to the hilly terrain in Himachal Pradesh.

    Analyst acknowledged

Q&A highlights

7 direct
Revenue potential and utilization of new Capex for cranes Direct
In the last quarter we are expecting around 40 to 50 cr, from that plant. ... In the 1st year, the capacity utilization in the 26-27, the capacity utilization we are expecting around 50% capacity utilization.

Provides specific revenue and utilization targets for the new crane manufacturing facility, indicating future growth drivers.

Asked by Sunny Kumar

Tractor business sales figures and Tower Crane JV strategy Partial
In your 1st question, we have noted the suggestion. We'll see to it. Okay? Regarding sharing of the figure tractor figure. Okay. ... Next is basically this tower crane, tower Crane is used for construction for high rise buildings. Mainly the 90% demand come from here...

Highlights management's consideration for disclosing more granular tractor sales data and clarifies the strategic focus and market for the new tower crane business.

Asked by MONEYQ ADVISORY

Tractor capacity utilization and marketing efforts Direct
Currently it takes around 30% plus 30%. If you consider only Crane, because the transmission and engine is produced by the tractor only, it is almost Tractor... But now the peopleization is less and we are. Therefore we are working on the marketing how to increase the number sale.

Reveals current low tractor capacity utilization and management's plan to address it through marketing, linking it to shared components with crane production.

Asked by MONEYQ ADVISORY

Timeline and location for Tower Crane manufacturing Direct
This is in this financial year. 3rd quarter we are expected to start the production facilities. ... We are expecting. By January.

Gives concrete timelines for the new Tower Crane production and first assembly, crucial for tracking execution of this new segment.

Asked by Bachh raj Nahar

Market size, share, and competitive differentiation for pick and carry cranes Direct
This is the last year around, I think, 14 to 15,000 numbers... Now we are almost 40%. And then we went to 16 ton, 16 ton was not very popular. ... We were the 1st companies to start the air brake system.

Provides insights into the market size, company's strong market share in specific crane categories, and key product differentiators.

Asked by Manan Shah

Tractor horsepower range and pricing strategy Direct
The maximum tractors that are sold here are up to 60 horsepower, sir. Currently the market in India anything ranges between 30 to 50 is the biggest chunk, but because 35 is the entry level tractor similar to the strategy in Crane. We aim to target the bigger customer. ... We have to be roughly around 5% cheaper than the market leader of that area.

Clarifies the company's product focus within the tractor segment and its competitive pricing strategy relative to market leaders.

Asked by Manan Shah

Details and rationale for Tower Crane technology transfer Direct
Sir, we are making one time payment only. ... We are taking technology of the biggest crane also. ... That's why we are acquiring the technology.

Explains the financial structure of the technology acquisition (one-time payment) and the strategic rationale behind it (safety, proven product, larger crane technology).

Asked by BARASARA CHIRAG

Court cases and high land development costs for new plant Direct
That is MSME. That is only one case. The company we brought goods worth more than 10 crore from a MSME. There was a contract, clear contact. ... one land which is we have taken level is a little lower side. Then, maybe for feeling it is by our civil department. They have estimated that this kind of cost is required, that is, maybe we have considered it because it is a little hilly terrain. Himachal is a hilly terrain. There is not a weather, plain land available anywhere.

Addresses concerns about legal disputes and explains the justification for the high soil filling and leveling costs for the new manufacturing facility.

Asked by BARASARA CHIRAG

2 min read 5 chapters

Detailed narrative

Q4 FY25 and Full Year Performance Overview

Indo Farm Equipment Limited reported a consolidated revenue from operations of ₹129.97 crores for Q4 FY25, contributing to a full-year consolidated revenue of ₹387.19 crores. The consolidated Profit After Tax (PAT) for Q4 FY25 was ₹13.51 crores, and for the full year FY25, it reached ₹23.55 crores. These figures highlight a strong financial closing for the fiscal year, reflecting the company's operational efficiency and market presence.

Strategic Expansion into Crane Manufacturing

The company is making significant strides in expanding its crane manufacturing capabilities. A new facility is being established to enhance the production capacity of pick and carry cranes by an additional 3,600 units per annum, with production expected to commence in Q3 FY26. Furthermore, Indo Farm is acquiring tower crane technology through a one-time payment agreement, with the first assembled tower crane anticipated by January 2026. This strategic move aims to position the company as a major player in the construction equipment segment, leveraging its existing manufacturing infrastructure.

Tractor Business Growth and Market Strategy

Despite current tractor capacity utilization being around 30%, Indo Farm is actively working on marketing strategies to boost sales. The company aims for a 20-25% CAGR in tractor volume over the next few years, with a specific target of 30% growth for the current year. To achieve this, a Dealer Development Department has been established with a goal to add 500 new dealers across India within the next three years, expanding market reach beyond the current 10% territory coverage. The company's tractors, ranging up to 50 HP, are priced approximately 5% lower than market leaders to gain competitive advantage.

Financing Arm Performance and Support

Barota Finance, the company's wholly-owned subsidiary, plays a crucial role in supporting the ecosystem by providing tailored financial solutions to customers. As of March 31, 2025, the Assets Under Management (AUM) stood at ₹131 crores, with a Gross NPA of 4.05% and Net NPA of 2.96%. Approximately 25-30% of tractor sales are financed through this NBFC, a ratio expected to be maintained at 25-35%. The company also benefits from partnerships with banks like HDFC and Kotak for financing, which helps in increasing sales and improving inventory rotation for dealers.

Capital Expenditure and Profitability Outlook

Indo Farm plans to spend ₹70 crores on plant and machinery for the new crane manufacturing facility, with the total amount to be expended by December-January. This investment, including land and building, is geared towards capacity expansion and new product development. The company projects an overall growth of 30% for FY26 across both tractor and crane segments. Looking ahead, management targets an improved PAT margin of 8-9% by FY27, driven by increased capacity utilization and operational efficiencies.

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