Icra Downgrades Tractor Sales Forecast to 4-6% for Fiscal Year'15

Ratings agency Icra today revised downwards its tractor sales forecast for the current fiscal to 4-6 per cent from 8 per cent earlier.. The agency said untimely rains in some parts of the country during February and March impacted Rabi crop as well as consumer sentiments. Icra, however, continues to maintain a volume compound annual growth rate of 8-9 per cent for the tractor industry over the next five years as long-term industry drivers remain favourable. After seeing a robust performance last year, growth in the domestic tractor industry shall also be contingent on the timeliness and adequacy of rainfall during 2014 south-west monsoons, Icra said in a release here.. However, current predictions portend a weaker monsoon, it said.. According to Icra, expectations of bumper Rabi harvest have, however, been tempered by unseasonal hail and rainfall during February and March while a 7 per cent volume correction in April was partly on account of high base of the corresponding month a year ago.. Stating that the spatial distribution of rainfall will also be a critical determinant, it said states in southern and western India are more vulnerable to the effects of lower rainfall on account of less irrigation penetration as against states like Punjab, Haryana and western Uttar Pradesh, where reliance on rain-fed agriculture is lesser.. After seeing volumes in both domestic and export markets shrink by as much as three per cent in fiscal 2013, the domestic tractor industry witnessed strong 18 per cent growth in the last fiscal.. The turnaround in performance was on account of a revival in underlying agricultural demand, coupled with a spurt in sales during festive months, Icra said.. On the domestic front, a good monsoon contributed to healthy Kharif output and along with increase in minimum support prices (MSP), rural inflows were healthy, Icra said.. It added that good soil moisture content along with brimming reservoirs also pushed up acreage of most Rabi crops.

Icra Downgrades Tractor Sales Forecast to 4-6% for Fiscal Year'15

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