On Wednesday, Escorts Limited reported a growth of 23% on a year-on-year basis in the domestic tractor market at 10,623 units sold in June given the healthy demand from the rural areas of the country. In the same period in 2019, the company had sold 8,648 units.
Escorts Limited which is a Faridabad-based tractor manufacturer and exporters said the company saw a drop in exports of 27% to 228 units in June.
The company sold a total of 17,690 units in the quarter ended in June which was 12% low year-on-year owing to the nationwide lockdown which was imposed in India in March end to contain the spread of the novel Coronavirus.
Corporate Head of Escorts Limited and Group Chief Financial Officer, Bharat Madan said that the growth of the tractor industry in India is widespread and can be expected to go upwards significantly because of the pent-up demand from the lockdown period, improved cash flow because of the record crop production, healthy farmer sentiment, availability of retail finance, above average Kharif sowing and a favourable monsoon forecast.
Escorts Limited reported their month-on-month sales of tractors in June improved by 65%.
Madan said, “Our inventory levels, both with the company and with the channel have been lowest ever. After necessary permissions, we were able to run our factories in multiple shifts to achieve production at about 90% of the capacity,”.
However, Madan warned of the supplychain situation which would continue to remain volatile because of the extended lockdown in various parts of India.
On the 29th of June, it was reported that the tractors witnessed a huge demand which led a healthy recovery through the month and on that basis it is expected to record a double digit YoY growth.
The tractor manufacturer in the country has increased the production by up to 50% to meet the swelling demand, claimed people aware of the development.
According to the credit rating agency named Crisil Limited, the tractor segment would be driven on the health demand in the FY 21 sales which is expected to be only 1% below that of the last Fiscal’s numbers even though a 37% year-on-year decline in volumes came in the period of April and May alone.
Crisil Limited earlier estimated that in FY 21 the tractor volumes would see a fall of 13%.