Mahindra tills optimism into tractor market, expects it to grow at 5% in FY25

Mahindra & Mahindra, India’s tractor behemoth, maintained its guidance for a 5% expansion in the domestic tractor market for the fiscal year ending March 2025. The company’s executive director, Rajesh Jejurikar, cited a confluence of favourable factors, including improving farmer incomes, a bountiful monsoon, and increased government spending on rural development.

"The outlook on tractors is: we maintain it at 5% for the full year," remarked Jejurikar during the post-results conference call with the media.  "Let's see how that plays out, and we may have better visibility and view as we come closer to the festival season," he added.

Elaborating on the positive enablers,  Jejurikar noted that terms of trade and price realisation for crops are becoming more favourable for farmers. Secondly, the monsoon outlook has been positive, as rains have been pretty good in most parts of the country during the July month, particularly in the western and southern regions of the country. What is further helping is the improved spendings by both the central as well as state governments in the rural sector. Furthermore, the second half of the fiscal always happen to be better on account of festive season, beginning with Navratra. 

As per the company presentation, M&M's farm business witnessed its highest ever quarterly volumes at 120,000 tractors sold, translating into a surge of 5% year-on-year (YoY).  Within it, the exports jumped by 45% to around 4,500 units. The performance helped Mahindra in improving their market leadership in the segment to reach 44.7%, an increase of 180 bps YoY. The company reported consolidated revenue from farm segment at Rs 9,711 crore during Q1FY25, which remains almost similar to that of the corresponding period last year, when it stood at Rs 9,710 crore. 

On the standalone farm machinery side, Mahindra's revenue increased to Rs 265 crore during Q1FY25, a jump of 34% YoY over Rs 197 crore in Q1FY24.