Mahindra Revises FY27 Tractor Industry Outlook to Flat as Monsoon Falls Short

Mahindra & Mahindra has revised its FY27 forecast for the Indian tractor industry to broadly flat. In July, the company had expected growth of around 5%. It cited a weak monsoon, pressure on farm incomes and higher input costs for the change.

Why the Mahindra outlook changed

• The southwest monsoon ended at 87% of the long-period average, and reservoir storage was 16% below normal as of 15 October.
• Maharashtra and Karnataka were hit hardest, with rainfall deficits of 19% and 30% respectively.
• Mahindra said input costs rose faster than crop prices, which weakened farmers’ purchasing power.
• Rajesh Jejurikar, head of Mahindra’s auto and farm sectors said “the reservoir levels are much worse than what we would have thought them to be.”

Mahindra’s Q2 FY27 tractor performance

Mahindra’s tractor sales, including exports, fell 6% year-on-year to about 1.16 lakh units in the September quarter, and its domestic market share dropped 150 basis points to 41.5%. Core tractor profit before interest and tax (PBIT) declined about 15% to ₹1,345 crore from ₹1,574 crore, while core tractor revenue stayed almost flat at ₹7,652 crore. As a result, the core tractor PBIT margin narrowed to 17.6% from 20.6% a year earlier. Rising steel, base-metal and rubber prices contributed to the pressure, and price increases of about 4% between April and August 2026 did not fully offset them.

First half and October numbers

Mahindra sold 2,74,068 tractors in April-September 2026, up 7% year-on-year. Domestic sales rose 6% to 2,62,872 units, and exports rose 16% to 11,196 units. In October, domestic dispatches fell 13% to 62,626 units, which the company linked mainly to Diwali falling in November this year instead of October. Even so, domestic sales for April-October were still 2% higher at 3,25,498 units.

Popular Tractors

Mahindra 575 DI

45 HP 2979 CC

Check Tractor Price

Eicher 380

40 HP 2500 CC

Check Tractor Price

Mahindra 585 DI Power Plus BP

50 HP 3054 CC

Check Tractor Price

Swaraj 744 FE Plus 4WD

50 HP 3307 CC

Check Tractor Price

What others expect

Escorts Kubota expects industry volumes to fall by double digits in the second half of FY27 and to contract slightly for the full year. ICRA forecasts 1-4% growth in domestic tractor wholesale volumes for FY27, compared with 23.5% in FY26.

What Mahindra expects next?

The company expects more margin pressure in the December quarter, an improvement in Q4 FY27 and a return to normal margins in FY28. It plans price adjustments, product refreshes, higher exports and restructuring of its international farm subsidiaries.

Tractor Junction also Offer a Monthly Subscription of Tractor Sales (Wholesale, Retail, Statewise, Districtwise, HPwise) Report. Please contact us for the detailed report.

Subscribe our Telegram Channel for Industry Updates- https://t.me/TJUNC
Follow us for Latest Tractor Industry Updates-
LinkedIn - https://bit.ly/TJLinkedIN
Facebook - https://bit.ly/TJFacebok