The upcoming festive season and higher Kharif sowing are expected to boost the domestic tractor demand in the next few months, said Hemant Sikka, the president of Mahindra & Mahindra‘s farm equipment sector.
According to Sikka, healthy festive season demand is likely in 2023, which will be supported by higher minimum support price (MSP) for crops as well as farmers’ preference for specialised tractors.
However, Sikka ruled out any negative impact on demand due to sluggish monsoon in August.
Speaking to Fe, he said, “The festive season should hold very well. This is on the back of good sowing that has happened for Kharif crops. We know that the Kharif sowing is better for all major crops compared to last year except for pulses.”
“We believe that if we get about a little bit more rain in next 15 to 20 days, I think the current crop will be kind of secured. So, on the basis of the current crop situation and a good MSP hike of 9.5% announced by the government, I think the festive season should hold very well for the industry. We are seeing a good cash flow in the hands of farmers.”
Besides, Sikka cited that nearly all crop prices are holding “very well”.
“For the farmer, the input cost is going down, because the input inflation is going down. Inflation is actually favourable for the farmer. So farmers, in that sense, are in a pretty good position.”
Furthermore, Sikka pointed out that the industry has shown growth trajectory despite panning out of the pandemic induced pent-up demand.
“I think the Covid-19 impact is more or less gone. Last year was a Covid-19 free year and the Indian industry actually hit an all time record of 945,000 tractors. We believe that even on a high base this year, the industry should grow.”
“Even in August the industry has shown growth despite the month being the driest August in a century.”
The farm mechanisation major has projected a lower single digit growth for the domestic industry during FY24. The company has over 41% market share in the domestic sector.
In terms of electrification of tractors, Sikka said that the segment is “some time away” from using electric powertrains. However, farmers are increasingly using speciliased tractors rather than multi-usage ones in the country, he said.
In August, on a year-on-year basis, the domestic sales of the company’s tractors, which also includes sales of its subsidiary, Swaraj Tractors, grew by 3% to 20,647 units.
Meanwhile, Swaraj Tractors on Monday introduced its new range of tractors in 40 to 50 HP category. The new models are priced at Rs 6.9 lakh for 42 HP (31.3 kW) base variant and Rs 9.95 lakh for 50 HP (37.2 kW) top-end model.
