After a record number of tractor sales in June, Escorts expects September-October 21 to be significant this time around
- Rural sentiment continues to be good and July sales are also expected to grow well
- Hoping for good festive sales, the company plans to increase production from current 10,020 units to 12,500 tractor units over the next 3-4 months.
- Expects Tractor Industry to See Single Digit Growth at S2FY22
Escorts recorded the highest June sales on record selling 12,533 units in June 2021 compared to 10,581 tractor units in June 2020.
According to the company, the continued growth in volumes and that of the tractor industry is a testament to the resilience of the rural and agricultural sectors.
In an interview with And nowEscort Group CFO Bharat Madan says June must have seen pent-up demand and currently rural sentiment continues to be good.
June was a very strong month, he said, and even July could see some follow-up buying due to the good harvest season and monsoon.
In order to offset the impact of commodity inflation, the company has increased tractor prices three times in the past 9 months and in the future any further price increases will depend on market behavior.
In the second wave of COVID, the supply chain was not a major issue, unlike the first. During this time, most dealerships, with the exception of a few pockets, were able to stay open and serve customers, albeit during limited hours of operation.
As the holiday season approaches, the company expects September to October to be significant this time around and plans to increase inventory levels by then.
Over the next 3-4 months, Escorts plans to increase production to 12,500 units / month from 10,020 units / month currently. In S2FY22, the tractor industry could experience high single-digit growth, where last year’s high base could prevent the industry from posting double-digit growth.
In the near term, they expect Agri’s margins to be burnt slightly due to commodity inflation, but in the longer term, they should rebound within the normal range of 17-18% of margins. ‘EBITDA.