Tractor industry in a rough spot; Mahindra expects sales to drop 10% in Q4

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Mint. However, group CEO Anish Shah said the tractor market was coming off its best-ever volumes in the past three years, and though several positive and negative factors were affecting rural demand, "the rural economy is doing reasonably well". Jejurikar said, "We expect the tractor industry to be more negative than what we'd thought, based on what we've seen over the past few months.

We expect tractor volumes to be at -5% for the full year. Q4 will be more negative than that. Right now the industry is at -4%, which will go to -5%, so you'll see roughly 10% negative growth in Q4." Shah added, "We're not looking at farm sales declining as rural distress.

It's just part of the cycle right now. If you look at the sector from a longer-term standpoint, we're in pretty good shape and this is par for the course from our perspective." The company sold 101,000 tractors in the December quarter, 4.1% fewer than in the same quarter of the previous year. For Escorts, tractor sales came in at 25,999 units in the quarter, down 7.2% from a year ago.

For the same quarter, industry volumes were down 4.9% at 2.35 lakh tractors. Last week, tractor maker Escorts Kubota Ltd said it expected the tractor market to shrink 6-7% from FY23, when the industry clocked its best-ever sales volumes. "We are looking at about a 12% to 13% decline in Q4 vis-a-vis last year.

So overall the year will end at about 890,000-895,000 units sold. This is on a high base, but this will still be the second-highest year of sales for the industry", said Neeraj Mehra, head, Farmtrac and Powertrac sales at Escorts Kubota. Mahindra & Mahindra reported a 61% year-on-year surge in standalone net profit to ₹2,454 crore and a 16% year-on-year jump in revenue to ₹25,642 crore