Predictions of a weak monsoon may take a toll on tractor sales this fiscal.

After the IMD guidance that India will receive below-average rainfall this year, analysts tracking the sector estimate that, at best, tractor sales may remain at the same level as in FY14, or even show a decline.

On the back of a good monsoon, sales had grown 20% in FY14 at 634,151 units.

?In the worst-case scenario, tractor dealers are expecting a 10% y-o-y decline in sales in fy15,? said Yashesh Mukhi, auto sector analyst at Morgan Stanley. ?Though given the current conditions till now, we expect tractor volumes to remain at the same level as last year.?

Tractor sales were similarly hit in FY13 due to drought-like conditions in states like Maharashtra. sales had fallen 3% year-on-year that fiscal.

M&M is the largest tractor manufacturer in India with a 41% market share. The company grew faster than the industry average last fiscal selling 260,000 tractors, annual growth of 22%.

?In case of M&M, its agri-business (including seeds, tools, and other equipment) is now as large as the tractor business, and this could help the company maintain its growth level,? said an auto sector analyst with a foreign brokerage. He declined to be identified as he is not authorised to speak to the media.

?Though Mahindra?s overall tractor sales growth is expected to decline by around 5%, contrary to the management?s guidance of 8-10% growth in tractor volumes for 2014-15.?

Except the recently commissioned facility in Zaheerabad, Andhra Pradesh, which can make 100,000 tractors annually, Mahindra is currently running all other plants at full capacity.

TAFE, the second-largest tractor maker in the country, sold 157,000 tractors in fy14, 25% higher than last year.

Phone calls and messages sent to Rajesh Jejurikar, chief executive of the farm equipment and two- wheeler divisions at M&M, and Mallika Srinivasan, chairperson and chief executive of TAFE, on Friday remained unanswered.

At M&M?s fourth quarter earnings conference, Pawan Goenka, executive director and president of the automotive, farm equipment and two-wheeler sectors, indicated that tractor sales do not get too impacted owing to just one bad monsoon.

Jinesh Gandhi, auto sector analyst at Motilal Oswal Financial Services, says that even if the monsoon is weak and leads to a drought-like situation in some parts of the country, water reserves from last year?s rainfall would mitigate the crisis.