Tractor Sales Surge Amid Favorable Monsoon Forecast

Tractor dispatches from companies to dealers are set to rise at a moderate 4-7% this fiscal, as per a report by rating agency Icra.

The domestic tractor industry experienced a volume increase of 10.5% year-on-year in June and 9.3% in the April-June quarter compared to the same period last year.

Icra forecasts that wholesale volumes will continue to grow at a moderate pace through FY2026, supported by above-normal monsoons which are expected to bolster agricultural production in key regions.

The rating agency highlights that easing commodity costs, spurred by a global demand slowdown and a correction in Chinese steel prices, are likely to support the margins of original equipment manufacturers (OEMs).

This positive trend is anticipated to maintain a healthy credit profile for tractor manufacturers, buoyed by increasing volumes, low debt, and adequate cash reserves and liquid investments, according to Icra.

(With inputs from agencies.)