Tractor industry may register high single-digit growth

According to a recently released report by the credit rating agency ICRA, the sales of tractors in the current fiscal is expected to reach to a high single digit trajectory despite Covid led setbacks in the initial months. With agriculture projected to be the only performing segment of the national economy, the demand for tractor sales is likely to consolidate after strong reversal signs witnessed in August.

Shamsher Dewan, Vice President, ICRA, said, “The strong revival in tractor volumes in the month of August’20 were aided by healthy rabi cash flows across regions and progress of monsoon (in line with forecasts). Further, OEMs have been ramping up production levels to stock inventory ahead of festive season and are gearing up for healthy sales for the rest of the year.”

ICRA has upwardly revised its industry growth forecast to 7-9% in FY2021 from an earlier estimate of 2-4% growth which was due to the uncertainty regarding the impact of the pandemic on the farming community. Rohan Kanwar Gupta, Assistant Vice President, ICRA, commented, “We have revised growth estimates based on the favourable rural market conditions. However, one cannot rule out the downside risk emanating from spells of unfavorable rainfall/floods leading to crop damage and supply chain disruption if any. Based on the prevailing circumstances, the credit outlook on the sector remains ‘Stable’.

Pix Courtesy: Jonathan Mast, Unsplash

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