Escorts Kubota Projects Strong Tractor Growth in FY26

Introduction

Escorts Kubota Ltd (EKL) anticipates a superior performance in India's tractor industry for the fiscal year 2025–26 (FY26), projecting mid to high single-digit growth in domestic tractor sales. This optimistic outlook is underpinned by favorable monsoon forecasts, increased government investment in agricultural infrastructure, and impending emission regulations that may stimulate pre-buying activities.

Favorable Conditions Fueling Growth

Neeraj Mehra, Chief Officer of EKL's Tractor Business Division, highlighted that all critical factors influencing the industry, such as positive rainfall forecasts and governmental focus on agricultural infrastructure, are aligning favorably this year. He stated, "This is for sure that the industry is looking at the highest-ever volume in the tractor market this year. And if all things fall into place, we are probably looking at a 10 lakh number this year."

Bharat Madan, EKL's Whole-time Director and Chief Financial Officer, echoed this sentiment, noting that the anticipated implementation of new emission norms from April 1, 2026, could lead to significant pre-buying in the latter half of FY26. He explained, "If that happens, there will be a lot of pre-buying that will happen for the old emission norm tractors both by customers and the channel. This means Q3 and Q4 of next financial year will see good pre-buying." 

Industry Trends and Projections

The tractor industry achieved record-breaking sales in FY23, with a sales volume of 9.45 lakh units. However, sales declined by 7% in FY24 to 8.76 lakh units. Despite this dip, the outlook for FY26 is positive. CRISIL Ratings projects that domestic tractor sales will reach an all-time high of approximately 9.75 lakh units in FY26, marking a 3–5% year-on-year increase. This growth is attributed to factors such as an expected above-normal monsoon, higher minimum support prices for key cash crops, and increased demand from the construction sector. 

Strategic Initiatives and Export Expansion

In FY25, EKL sold 115,554 tractors, marking a 1.0% growth compared to the previous year. Domestic sales increased by 1.6% to 110,563 units, while export sales declined by 11.2% to 4,991 units. Despite the decline in exports, EKL is optimistic about international markets. The company plans to introduce new models, including a 40–45 HP tractor under the Kubota brand in Q2 FY26 and a paddy-focused “Powertrac” series tailored for southern markets in Q3 FY26. These initiatives aim to increase exports to 20–25% of total volumes in FY26, up from the current 4.3%.

Conclusion

With favorable monsoon forecasts, supportive government policies, and strategic product launches, Escorts Kubota is well-positioned to capitalize on the anticipated growth in the tractor industry for FY26. The company's proactive approach to market dynamics and commitment to innovation underscore its confidence in achieving record-breaking sales in the coming fiscal year.

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