- 25 Nov 2024
- ICICI Securities
WITLESSNESS GREEN SHOOTS OF DEMAND RECOVERY
News: According to media sources, Escorts Kubota's Chief Financial Officer has projected an 8-10% growth in festive sales for the tractor industry in FY25, driven by strong demand and favourable market conditions. This optimistic outlook aligns with the company's recent performance. The overall sentiment in the agricultural sector remains positive, bolstered by government initiatives and increasing adoption of modern farming practices.
Views: Tractors is expected to pick up pace going forward led by robust monsoons, healthy water reservoir levels and rise in rural spending by the government. On back of a positive festive season major tractor OEMs i.e., M&M and EKL have guided for a double-digit growth in H2FY25, which will eventually lead to a mid-single digit volume growth for FY25E. In tractor space, we continue to like M&M given its industry leadership both in terms of margin profile as well as market share.
Impact: Positive