Beneficial Rabi harvest earnings and regular demand from key agricultural states underpinned the robust begin to the fiscal yr.
The 41–50HP section remained the trade’s development engine, increasing 13.5% YoY and commanding 65.2% of whole volumes—up from 47.3% in FY19—reflecting an 8.4% CAGR over FY19–25.
The sub-30HP class grew 21.3% YoY, supported by horticulture adoption and demand from small farmers, whereas the 31–40HP vary contracted 4.2% YoY, persevering with its -3% CAGR decline since FY19.
This underlines a long-term structural shift towards greater HP tractors, aligned with superior mechanization wants.
Regionally, West and North India collectively accounted for 72.6% of Q1 volumes. West India has emerged because the dominant market, its share climbing from 28.9% in FY19 to 38.6% in Q1FY26, aided by sustained demand development.South India’s share, nonetheless, has dropped from 19% to 13.7% over the identical interval regardless of a 21.9% YoY rebound within the newest quarter. East India additionally posted a pointy 27.6% YoY restoration from a low base, reaching a 13.8% share.Based on ICRA estimates, the trade is poised to develop 4–7% in FY26, supported by rising greater HP penetration, government-backed mechanization initiatives, and efficiency-focused farming practices. Nonetheless, trade gamers stay watchful of monsoon efficiency and rural liquidity, alongside the tempo of restoration in weaker geographies.With the 41–50HP class now dominating gross sales, a beneficial regional combine, and enhancing mechanization tendencies, the sector is about to maintain its position as a key driver of India’s rural financial system and agricultural equipment market within the medium time period.
M&M: Purchase| Goal Rs 3,687
M&M is well-positioned for long-term development, backed by a sturdy product pipeline via 2030, with key ICE SUVs, BEVs, & LCVs set to launch in CY26. Geographic power in high-demand tractor markets and beneficial rural demand restoration additional assist volumes.
In Q1FY26, M&M outperformed the tractor trade with 10.5% YoY quantity development and expanded its market share to 45.2%, gaining floor throughout all HP segments—particularly within the dominant 41–50HP class (65% of trade volumes).
Regional positive factors in East and West India replicate deep rural penetration and efficient distribution. The corporate targets a 7% quantity CAGR over FY25–27E, supported by new launches and rural tailwinds. We estimate ~14%/13%/16% CAGR in income/EBITDA/PAT over FY25–27E.
(Disclaimer: Suggestions, strategies, views, and opinions given by consultants are their very own. These don’t characterize the views of the Financial Occasions)
