Mahindra & Mahindra, the world’s largest tractor manufacturer, expects the volume growth of India’s tractor industry to be in low double digits in FY26. The revision in forecast comes amid good monsoon rains, adequate levels of reservoirs and a GST cut to 5% with effect from September 2025.
M&M had projected 5–6% industry growth at the start of FY26. “We are increasing the forecast to low double digits. Rainfall and reservoir levels have been favorable, while the lower GST supports demand,” said Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, M&M.
Revised Predictions Aligns With Analysts
Earlier, the domestic tractor market was expected to witness high single-digit growth. The revised outlook is in line with ICRA's revised forecast, which has upgraded the growth outlook to 8-10% from 4-7% earlier, factoring in above-normal monsoon conditions and a GST cut.
Sales Performance in FY25
Domestic tractor sales stood at 939,713 units in FY25, up 8.36% over last year. Wholesale volumes for September 2025 stood at 146,180 units, up 45% YoY. As analysts point out, the reduction in GST by seven percentage points could bring down costs by ₹40,000-60,000 per tractor, thereby making the product more affordable for farmers.
M&M Farm Equipment Division Results
The farm equipment sector at M&M reported a 32% increase in volumes at 123,000 tractors in Q2 FY26. Stand-alone PBIT grew 48% to Rs 1,684 crore, as margins expanded 220 bps to 19.7%, while core tractor PBIT margins went up to 20.6%. Consolidated segment revenue jumped 25% to Rs 10,225 crore and consolidated PAT rose 45% to Rs 1,163 crore.
"The Q2 FY26 results reflect continued performance in the Auto and Farm businesses, with gains in market share and profitability," said Anish Shah, Group CEO and Managing Director.
Outlook for FY26
Given the monsoon, GST changes, and market trends in the current period, India's tractor industry is expected to show growth at moderate levels in FY26, according to company statements and analyst projections.
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