Tractor dispatches to grow 4–7% in FY26 on monsoon boost: ICRA
The industry recorded a robust 10.5 per cent year-on-year (YoY) growth in June 2025 and 9.3 per cent during the April–June quarter, reflecting improving sentiment and favourable weather conditions.
"Wholesale volumes are estimated to grow at a moderate pace of 4–7 per cent in FY2026. The projected growth is likely to be supported by above-normal monsoons, which are expected to boost agricultural production across key regions," ICRA stated.
Factors attributing to the growth
In addition to favourable weather, the easing of global commodity prices—especially steel—has offered cost relief to original equipment manufacturers (OEMs). Despite persisting macroeconomic uncertainties, a slowdown in global demand and a correction in Chinese steel prices have helped temper input costs, which is expected to support profit margins for tractor makers.
ICRA noted that the financial health of tractor manufacturers remains stable, driven by improving volumes, low leverage, and comfortable liquidity positions. The combination of strong fundamentals and favourable external factors is likely to keep the credit profile of OEMs healthy through the fiscal.
Industry players are now expected to continue investing in capacity expansion and technology upgrades, while maintaining fiscal prudence amid cautious optimism in the rural economy.>
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