Mahindra & Mahindra Ltd. (M&M) has significantly raised its expectations for the Indian tractor market, signaling a robust recovery in the rural economy that has caught even industry leaders by surprise.
In a post-earnings briefing for the third quarter of fiscal year 2026, the company’s management admitted that its previous projections were overly cautious. “We underestimated what the industry would be like,” said Rajesh Jejurikar, Executive Director & CEO of the Auto and Farm Sector at M&M. “When we said low double digits, it is likely to be twice the low double digits, somewhere in the 22% to 24% range for the year.”
The upward revision comes on the back of a strong third quarter in which M&M, India’s largest tractor manufacturer, reported a 23% jump in tractor volumes, selling 149,567 units. This performance was underpinned by strong domestic demand. Despite a minor 20-basis-point dip in quarterly market share to 44.0%, attributed to supply constraints for its Swaraj brand during a high-intensity festival season, M&M maintained its year-to-date dominance with a 44.1% share.
The tractor industry often serves as a barometer of India’s rural health. Analysts point to recent tax reforms as a primary catalyst. M&M’s leadership highlighted that the rationalization of the Goods and Services Tax (GST) has fundamentally lowered the "cost of ownership" (the total expense of buying and operating a machine). This tax correction has created a sustainable trigger for growth by making mechanization more attractive than manual labor. “There is a sustainable impact... as the cost of ownership comes down, that becomes a very important variable which drives industry growth,” Jejurikar explained.
While the domestic story is one of growth, the international landscape remains complex. M&M’s farm sector faced some "impairments" (reductions in the recorded value of assets) in its international subsidiaries, specifically in Japan and Turkey, due to restructuring and hyperinflation.
However, the outlook for the North American market is brightening. After months of navigating 50% tariffs on Indian-made tractors, a new trade agreement has seen those duties drop to 18%. M&M is now preparing to release inventory from bonded warehouses to reclaim market share in the U.S.