Tractor sales momentum may persist for next 3 quarters: Escorts

New Delhi, India, November 4 () Engineering and agricultural equipment giant Escorts anticipates continued growth in tractor sales over the next three quarters. However, the company’s outlook for the next fiscal year will become clearer only after the upcoming general elections. In the first quarter of 2018-19, the company’s tractor volume increased by 20.2% to 45,533 units, and the majority of the factors driving tractor demand in the rural market are positive. “Most of the factors driving tractor demand in the rural market are positive,” Escorts Group CFO Bharat Madan said. “There is nothing negative as of now on the rural demand side, and we believe the sentiment will remain positive at least until the first quarter of next fiscal year.” He added that the excellent produce of the previous Kharif harvest and the upcoming Rabi season “looks pretty good.” “The MSPs (minimum support prices) are much better than last year, although they may not be in the same range as the government projects…However, the overall numbers are positive and better than last year,” added Madan. When asked about the company’s tractor sales forecast for the current fiscal year, he stated, “We are anticipating a 20 percent increase in domestic tractor sales.” Last year, the company sold approximately 80,000 tractors, of which 78,000 were sold domestically and 2,000 were exported, he added. Madan stated, “This year, we anticipate closer to 98,000 units. Export for us is very small, so for this year, we anticipate roughly 3,000 units exported and the remainder will be sold domestically.” He stated that the prognosis for the next fiscal year would become clearer only after the next year’s general elections and monsoon season. The momentum will continue for the next three quarters. After the first quarter of the next fiscal year, it will be important to see how things like the elections and the government’s agricultural policy play out, along with the monsoon. In the second quarter of the current fiscal year, Escorts’ tractor sales increased 3.3% to 21,039 units. “It was flat due to the base index resulting from the implementation of GST last year and the delay of the festive season compared to last year,” Madan explained. For the third quarter, he stated, “We anticipate good growth numbers. The fourth quarter may be a bit slower for tractors, but overall, we anticipate double-digit growth for tractors.”

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