Mumbai: Escorts Ltd on Wednesday reported 23% year-on-year growth in domestic tractor sales at 10,623 units in June on the back of robust rural demand. The company had sold 8,648 units in the same month last year.
The Faridabad-based tractor manufacturer’s exports, however, dropped 27% to 228 units last month.
Bharat Madan, group chief financial officer and corporate head, Escorts Ltd said that the tractor industry growth is widespread and is expected to continue to grow significantly due to pent-up demand from the lockdown period, improved cash flows owing to record crop output, positive farmer sentiment, better than normal kharif sowing, availability of retail finance and good monsoon forecast.
Tractor sales for the company improved 65% month-on-month in June.
“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,” said Madan.
He, however, warned that supply chain situation continues to remain volatile in the wake of extended lockdowns in certain parts of the country.
The company sold a total of 17,690 units in the June quarter, down 12% year-on-year due to the nationwide lockdown in April.
Mint reported on 29 June that tractors have witnessed strong demand leading to a robust recovery through the month, which is expected to record a double-digit YoY growth. Tractor manufacturers have ramped up production by 50% to meet the surging demand, people aware of the development had said.
Credit rating agency Crisil Ltd expects the tractor segment to ride on the robust demand with FY21 sales expected only 1% below that of last fiscal’s numbers despite a 37% year-on-year decline in volumes in April and May. The credit rating agency had earlier estimated that the tractor volumes would fall 13% in FY21.