Demand uptick on the back of firm crop prices to bolster tractor stocks

Higher rabi output, no BSVI impact and firm crop prices are positives

While December volumes for tractor makers were a mixed bag, brokerages believe that the outlook for tractor makers is positive. Mahindra and Mahindra reported a 4 per cent year-on-year volume uptick for December, while Escorts sold 10 per cent fewer tractors in the month. 

While tractor sales for the first nine months of FY20 for M&M and Escorts are down by up to 10 per cent, demand is expected to improve on expectations of better Rabi output and firm crop prices. The government too has increased its food grain production target by 6 million tonnes to 291 million tonnes for