New Delhi, April 21
Domestic sales volume of tractors is set to hit an all-time high of 9.75 lakh units in fiscal 2026, increasing 3-5 per cent (year-on-year), a Crisil report said on Monday.
This will be supported by an expected above-normal monsoon, higher minimum support prices (MSPs) for key cash crops and better replacement and construction demand.
With the new TREM V emission norms1 expected from April 1, 2026, pre-buying towards fiscal end may also provide a fillip to volume.
As a result, tractor sales this fiscal are expected to surpass the peak of 9.45 lakh units achieved in fiscal 2023, sustaining the back-to-back volume growth seen during fiscal 2019.
There was a healthy 7 per cent increase in tractor sales in fiscal 2025, said the report.
The Indian Meteorological Department's forecast of above-normal monsoon should lift rural sentiment and reinforce farmer confidence, which is crucial for driving farm investments such as tractors.
"This, along with the expected rise in MSP for key cash crops, and pick-up in construction activity, especially roads, supported by sizeable government allocation in the Union Budget for this fiscal, should help drive 3-5 per cent volume growth for tractors this fiscal," said Anuj Sethi, Senior Director, Crisil Ratings.
Besides, the anticipated TREM V-driven price hikes from April 2026 could trigger pre-buying in the last quarter of fiscal 2026, providing a boost to volume, he added.
Rising volumes and easing input costs should keep the operating margin of manufacturers stable at 13.0-13.5 per cent this fiscal, in line with the past two fiscals.
With strong cash flow, low debt and robust liquidity, tractor makers are well-positioned to invest in capacity and upgrade emission control technologies.
A Crisil Ratings analysis of five tractor original equipment manufacturers (OEMs), accounting for over 90 per cent of industry volumes, indicates as much. Agriculture contributes to 70-75 per cent of tractor volumes and construction and related activities contribute the balance.
According to Poonam Upadhyay, Director, Crisil Ratings, tractor manufacturers have entered fiscal 2026 on a strong footing with margins stable at 13-13.5 per cent on softer input costs and sustained volume growth.
— IANS
Reader Comments
Great news for our farmers! 🚜 The monsoon forecast and MSP increases should really help rural economies. My uncle just bought a new tractor last month - perfect timing!
While the growth is positive, I hope manufacturers focus on making tractors more affordable for small farmers too. The price hikes from new emission norms might hurt marginal farmers the most.
Construction sector growth is driving demand too! Our contracting company just added 3 new tractors to our fleet. The government's infrastructure push is creating real opportunities.
Interesting analysis. The stable margins at 13-13.5% show the industry is healthy. I wonder if this growth will translate to more jobs in manufacturing sectors too?
The pre-buying trend before emission norm changes always creates artificial demand spikes. Hope the industry finds more sustainable growth drivers in the long term.
This is fantastic! More tractors mean more efficiency in farming. Maybe we'll see food prices stabilize with better farm productivity. ðŸ‘
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