D-Street is cheerful with the positive spread of the monsoon across the country. Monsoon is a boon for the revival of agricultural-driven economies like India. Nevertheless, tractor sales numbers have already started showing signs of positive development.
Indian Meteorological Department (IMD) had recently claimed that southwest monsoon had entered the country on June 26, 2020, which was 12 days prior to the usual date. However, the monsoon and its normalcy are very much important for Kharif crops while, in the case of Rabi crops, the procurement and price realizations have been very good this year.
The sales numbers of Mahindra and Mahindra, as well as Escorts, is a recent proof of the new trend. On Wednesday, Escorts reported 22.8% yoy growth in June sales numbers (domestic). This can be considered as a very strong comeback after lockdown. Meanwhile, Mahindra and Mahindra reported 12% growth (domestic) sales numbers. Interestingly, even during May 2020, Mahindra and Mahindra had reported 2% yoy growth. The sector may see a further course of action very soon with more economic activity.
The tractor segment in India also has a few unlisted players such as Tractors and Farm Equipment (TAFE), International Tractors, CNH Industrial (India). Numbers from these players would further give strength to the sentiment for the overall sector.
On Wednesday, both Escorts and Mahindra and Mahindra, were trading lower by 1% and 2%, respectively.
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