Why is Escorts Kubota underperforming the booming tractor sector?

Escorts Kubota, a pure-play tractor manufacturer, reported a 16% jump in sales volume for FY26. Tractors sales are more seasonal than those of other automobiles, so the focus should be on annual numbers.

Escorts’ FY26 growth was led by strong rabi-season demand, healthy reservoir levels and higher minimum support prices (MSPs).But are the volume numbers good enough to revive investor interest in the stock, which has lost nearly a quarter of its value in 2026? Since exports form a small part of Escorts’ total tractor volumes, let’s evaluate the performance of domestic volumes, and compare them with those of bigger rivals such as Mahindra & Mahindra (M&M).Escorts’ domestic tractor volumes grew 15% year-on-year in FY26 to 1,26,994 units, while M&M’s grew by 24% to 5,05,930. In the March quarter (Q4FY26), Escorts’ domestic tractor volumes grew 23% versus 38% for M&M.

So, despite being almost four times Escorts’ size in terms of volumes, M&M has reported a far higher growth rate. This means Escorts’ loss of market share in 9MFY26 likely continued in Q4 as well.

While the tractor industry grew by 20.4% in 9MFY26, Escorts reported a growth rate of just 12.6%.Can Escorts gain market share in future? To answer that we need to first understand why it's underperforming. Management explained in its Q3 earnings call that south and east regions were growing at 34%, faster than its north and central strongholds.Escorts needs to continue to make its presence felt beyond its core geographies through more rapid network expansion.Secondly, farmers now prefer tractors above 40 horsepower (HP) to those below 40 HP.

The GST rate cuts of September 2025 are seen as the key factor in making these powerful tractors more affordable. Escorts