Mahindra & Mahindra is different compared to the development of the tractor industry. | Tech US News

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Mahindra & Mahindra Limited, India’s largest tractor manufacturer, expects the tractor industry to grow at around 5 percent in the current fiscal year.

“As things stand now, though the festival has been good, we believe we will end the year at around five per cent,” said M&M’s auto and farm sector executive director Rajesh Jejurikar. CNBC-TV18 in an interaction. “But on the upside, it could go up to 6.5 percent,” he added.

In the farm equipment segment, the company had a market share of 41.5 percent for the first half of the current fiscal year.

Jejurikar attributes the performance to strong and robust demand and the company’s improved performance in the SUV space, which has seen growth in both demand and profitability.

Mahindra & Mahindra has been the market leader in the SUV segment for three consecutive quarters in terms of revenue market share. To meet the growing demand, the company plans to increase its SUV capacity to 49,000 units per month by FY2024 from the current 29,000 units per month.

According to Jejurikar, the company’s EBITDA margin declined by 50 basis points compared to the same period last year as the company was unable to pass on higher input costs to customers. However, he adds that Tractor’s margins have improved since the June quarter due to lower commodity prices.

With the auto industry facing a shortage of semiconductors for most of the last financial year, Jejurikar believes the worst of the semiconductor shortage is over. However, this is something that will have to be tracked closely over the next few quarters.

Shares of Mahindra & Mahindra were trading 0.4 percent lower at Rs 1,281.75.

First Publication: IST

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