Tractor Dispatches To See 4-7% Growth In FY26, Says Icra

Tractor dispatches from companies to dealers are expected to grow at a moderate pace of 4-7% in the current fiscal, as per rating agency Icra. The domestic industry saw volumes grow by 10.5% year-on-year in June this year and 9.3% in the April-June quarter compared with the same period last year.

"Going forward, wholesale volumes are estimated to grow at a moderate pace of 4-7% in FY2026. The projected growth is likely to be supported by above-normal monsoons, which are expected to boost agricultural production across key regions," Icra said in a statement. The rating agency said that despite global macroeconomic headwinds, commodity costs have eased, driven by a slowdown in global demand and a correction in Chinese steel prices.

This trend is likely to support margins of original equipment manufacturers it added.

As a result, the credit profile of tractor manufacturers is expected to remain healthy, backed by rising volumes, low debt, and adequate cash and liquid investments, Icra said.