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News: According to media sources, tractor sales in India are projected to grow by 4–7% in FY26, driven by a favourable monsoon forecast and robust agricultural output. The industry saw a 7% increase in wholesale volumes in FY25, and the upcoming TREM V emission norms, set to take effect from April 2026, are expected to prompt pre-buying that could further boost sales. IMD has forecast above-normal monsoon rainfall at 106% of long period average, while recent government estimates indicate a 7.9% year-on-year rise in kharif crop output and a 1.5% increase in rabi sowing—factors that are likely to support positive farm sentiment and tractor demand.
View: Industry expect tractor sales to potentially exceed the 10 lakh units mark for the first time in FY26, surpassing the previous record of 945,311 units sold in FY23 and 939,713 units in FY25 on the back of above normal monsoon. The sector’s growth is also being aided by higher minimum support prices for key crops and increased government spending in rural areas. The tractor industry has been witnessing good momentum on account of favourable weather conditions, good reservoir levels, strong rabi outlook and positive terms of trade for farmers. Our top bet in this space is M&M as well its ancillary names such as Swaraj Engines.
Impact: Positive