Good Monsoon, Rise in MSP to drive rural demand in coming months: Escorts said after record June Tractor sales

Biznextindia : Escorts Ltd Agri Machinery Segment (EAM) has achieved its highest ever June sales at 12,533 tractors, a growth of 15.5 percent against 10,851 tractors sold in June 2020. It’s domestic tractor sales grew by 12.5 percent to 11,956 tractors. The company has attributed the rise in sales to robust rural demand backed by a timely Monsoon.

“The continued growth in our volumes and that of tractor industry is a testament of resilience of rural and Agri sectors. Despite the challenges posed by the pandemic, the farmers of our country continued to work hard to make sure all of us have food on their plates. The on-ground situation eased in June as the second wave of pandemic started diluting. Most of the dealerships, except in few pockets, were able to remain open and serve customers, though for limited hours of operation” the company said.

The company expects the positive momentum will accelerate in the remaining months of the current fiscal due to positive farmer sentiment backed by above normal Monsoon, rise in MSP and record procurement by the government.

“Our inventory levels, both with the company and with the channel, continue to be at normal levels. We remain optimistic for the rest of the fiscal year, as timely and expected above-normal monsoon, increase in MSP prices, and record direct procurement by Government is leading to a positive build-up of farmer sentiments. The commercial activity also is expected to gain further momentum in the ensuing months. The enhanced pace of mass vaccinations is further going to help the rural sector” said the company.

“Inflation however continues unabated beyond industry expectations. While we are trying to offset a part of this through internal cost control measures, we have announced a significant price hike effective 1st July 2021 on all tractors. This is our third consecutive price hike in the last nine months. Despite this, inflation continues to put pressure on the margins” the company said.