Rajesh Jejurikar, Executive Director and CEO, Auto & Farm Sector
Mahindra & Mahindra has retained its FY27 guidance for mid-single-digit growth in the domestic tractor industry despite an 18 per cent jump in June-quarter domestic tractor volumes, choosing to remain cautious even as the monsoon has improved, kharif sowing has accelerated, rural cash flows have strengthened, and farm mechanisation continues to gain momentum. The company said tougher second-half comparisons and the need to assess the remainder of the monsoon season before revising its outlook prompted it to maintain its guidance.Guidance stays unchanged despite bumper quarterA strong start to FY27 has not altered Mahindra’s view of the tractor market for the full year. Rajesh Jejurikar, Executive Director and CEO, Auto & Farm Sector, said the company would retain its guidance of mid-single-digit growth for the domestic tractor industry even after Mahindra’s domestic tractor volumes rose 18 per cent and exports increased 15 per cent during the June quarter. He attributed the cautious stance to a high base in the second half of last year, uncertainty over how the monsoon will progress through the rest of the season, and reservoir levels that, while improving, are still being monitored closely.Mahindra retained its leadership in the domestic tractor market with sales of 158,000 tractors and a 44.9 per cent market share during the quarter. Sequentially, market share improved by 280 basis points, underscoring the company’s continued dominance despite robust industry growth.Structural demand remains intactWhile remaining cautious on the annual outlook, management painted a constructive picture of the rural economy. Jejurikar said labour shortages, as workers migrate to industrial centres offering higher wages, are accelerating farm mechanisation and supporting tractor demand. Healthy rabi cash flows, aided by a 19 per cent increase in wheat procurement, a 16 per cent rise in government spending on rural development and agriculture, improving reservoir levels and faster kharif sowing have further strengthened rural sentiment. Rainfall deficit has narrowed sharply to around 15 per cent below normal, indicating a significant improvement in monsoon conditions, although the company said it would wait for greater visibility before revising its outlook.Growth beyond tractorsMahindra’s broader farm business also continued to gather pace. Farm machinery posted its highest-ever quarterly revenue of ₹362 crore, up 17 per cent year-on-year. Looking ahead, management said future growth would be driven by new product launches, faster export growth and improved execution in international markets following the restructuring of its Turkey operations.Margins stay resilient despite inflationMahindra also introduced a new reporting format for its farm business, separating the core tractor business from international subsidiaries and other farm operations. The core tractor business, including exports, delivered a 19.2 per cent PBIT margin despite 300-400 basis points of commodity inflation, highlighting the resilience of the domestic business. However, impairment related to the exit from the Erkunt Foundry business in Turkey weighed on international operations, pulling consolidated farm margins down to 14.2 per cent from 15 per cent a year ago. Farm profit nevertheless rose 15 per cent year-on-year, or 16 per cent excluding the impairment.Published on July 31, 2026
