Revival Hopes Rev Up Tractor Counters

Share prices of tractor companies increased today on hopes of a revival in the sector.

The Mahindra & Mahindra (M&M) share surged seven per cent to the week's high of Rs 115.40, while Punjab Tractors witnessed a 3.97 percent jump at Rs 175.35 on the Bombay Stock Exchange.

"We feel that tractor companies, in the last two months, have been showing decent sales. A foreseeable revival in the economy as well as in the agriculture sector should further boost investor confidence," a dealer said.

Analysts say that rural demand for tractors is increasing and the inventory built-up at the dealer's end is almost exhausted.

The rise in prices is also been fueled by expectations that tractor sales volumes will improve following the elections in Uttar Pradesh. Analysts say politicians provide subsidies for tractors to farmers in the pre-election period.

In the last 15 trading sessions, M&M rose 30.6 per cent to Rs 107.80 on January 17, 2002, from Rs 82.55 on December 27, 2001. Volumes increased to 14.39 lakh shares.

On the other hand, Punjab Tractor lost marginally by 0.67 per cent to Rs 168.65 on January 17, 2002, from Rs 169.80 on December 27, 2001. Volumes rose to 22,869 shares.