site logo
Search Location Location

Ad

Ad

Ad

Domestic Tractor Market Expected to Grow 3-5%: CRISIL Analysis


By Priya SinghUpdated On: 29-Feb-24 07:16 AM
noOfViews4,459 Views

Follow Us:follow-image
Shareshare-icon

ByPriya SinghPriya Singh |Updated On: 29-Feb-24 07:16 AM
Share via:

Follow Us:follow-image
noOfViews4,459 Views

Get insights into the anticipated growth of the domestic tractor market, driven by factors like stable operating margins and positive rural sentiment, despite challenges faced in the current fiscal year.
Tractor manufacturers anticipate stable 15-16% operating margins.

Key Highlights:
•    CRISIL expects 3-5% growth in next fiscal's tractor market.
•    Agriculture fuels three-fourths of tractor demand.
•    Despite a sales dip, normal monsoon forecasts and higher wheat MSP may boost sales.
•    Tractor manufacturers anticipate stable 15-16% operating margins.
•    Replacement demand from the previous growth period to drive sales.

In a recent analysis conducted by CRISIL, it's predicted that the domestic tractor market will see a modest growth of 3-5% in the next fiscal year. This projection comes on the back of several positive indicators, including healthy operating margins and positive cash balances among major tractor manufacturers.

The analysis, which focuses on five major tractor manufacturers representing a significant portion of sectoral revenue, emphasizes the pivotal role of agriculture in driving tractor demand. 

Around three-fourths of the demand is attributed to agriculture, influenced by factors like farmer sentiment, which is closely tied to the monsoon and rural income levels. Other sectors such as infrastructure and mining contribute to the remaining demand.

Despite a decline in sales in the current fiscal year, primarily due to erratic monsoon patterns linked to El Nino, there's optimism for the upcoming year. Weather forecasts predicting a normal monsoon, coupled with an increase in the minimum support price for wheat and robust replacement demand, are expected to boost tractor sales.

Replacement demand, accounting for a significant portion of sales volume, is anticipated to rise due to the previous period of healthy growth between fiscal years 2016 and 2018.

Stable operating margins of 15-16% are projected for tractor manufacturers, supported by expected stability in raw material prices, particularly steel and pig iron. This stability in input costs has already led to improved operating margins in the current fiscal year.

Also Read: Sonalika Tractors Celebrates 15 Million Strong Farmer Family at Krishi Darshan Exhibition

Overall, while challenges like erratic monsoon patterns persist, the outlook for the tractor market in the next fiscal year remains cautiously optimistic. Factors such as stable operating margins and positive rural sentiment are expected to drive modest growth in the sector. However, monitoring the impact of the monsoon on demand will remain crucial for stakeholders in the industry.

CMV360 Says

Despite a tough year with unpredictable weather affecting tractor sales, experts are saying things are looking up. They're expecting a modest growth of 3-5% in the tractor market next year. This means that more farmers may be able to purchase the equipment they need to work their farms. It's all because of stable prices for materials like steel and pig iron, which helps keep costs down for tractor makers. 

Plus, with a normal monsoon predicted and better minimum support prices for crops like wheat, farmers might feel more confident about investing in new equipment. So, while things were rough this year, it seems like brighter days are ahead for our farming communities.

News


Swaraj Tractors Showcases Advanced Farming Solutions at Krishithon Expo in Nashik

Swaraj Tractors Showcases Advanced Farming Solutions at Krishithon Expo in Nashik

Explore Swaraj Tractors' innovative range at Krishithon Expo, featuring advanced models designed to enhance farming productivity and efficiency....

21-Nov-24 10:25 AM

Read Full News
TAFE and AGCO Secure Legal Relief in Massey Ferguson Dispute

TAFE and AGCO Secure Legal Relief in Massey Ferguson Dispute

TAFE and AGCO clash over Massey Ferguson brand rights, with Madras High Court ordering status quo amid ongoing legal battles....

20-Nov-24 05:35 AM

Read Full News
VST Tillers Launches Eco-Friendly 30HP Tractor with Advanced Emission Standards

VST Tillers Launches Eco-Friendly 30HP Tractor with Advanced Emission Standards

VST Tillers unveils a 30HP tractor with Stage-V emission standards, combining eco-friendly technology, efficiency, and global market expansion....

19-Nov-24 05:32 AM

Read Full News
Government to Provide Loans and Interest Subsidy for Tractors and Farm Equipment: How Farmers Can Benefit

Government to Provide Loans and Interest Subsidy for Tractors and Farm Equipment: How Farmers Can Benefit

The government offers loans with up to 7% interest subsidy for farmers, easing access to affordable funds for agricultural and other needs....

12-Nov-24 06:14 AM

Read Full News
Domestic Tractor Sales Rise in October 2024: 1,44,675 Units Sold with 22.37% Growth

Domestic Tractor Sales Rise in October 2024: 1,44,675 Units Sold with 22.37% Growth

Domestic tractor sales grew by 22.37% in October 2024, with 1,44,675 units sold. M&M Group led the market growth....

11-Nov-24 10:03 AM

Read Full News
Mahindra Farm Equipment Raises Growth Outlook for FY25, Aiming for 16% Tractor Market Growth in H2

Mahindra Farm Equipment Raises Growth Outlook for FY25, Aiming for 16% Tractor Market Growth in H2

Mahindra Farm Equipment raises its FY25 growth forecast, targeting 16% tractor market growth, with a focus on alternative fuels....

11-Nov-24 07:29 AM

Read Full News

Ad

Ad

As featured on:

entracker
entrepreneur_insights
e4m
web-imagesweb-images

Registered Office Address

Delente Technologies Pvt. Ltd.

M3M Cosmopolitan, 12th Cosmopolitan,

Golf Course Ext Rd, Sector 66, Gurugram, Haryana

pincode - 122002

Join CMV360

Receive pricing updates, buying tips & more!

Follow Us

facebook
youtube
instagram

COMMERCIAL VEHICLE BUYING BECOMES EASY AT CMV360

We bring great transparency on pricing, information and comparison of tractors, trucks, buses and three wheelers.