Good monsoon and buoyant farm sentiments are likely to push tractor sales ahead of the upcoming rabi season.
According to Munish Kumar, Senior Vice-President, Sales and Marketing, Sonalika International Tractors Ltd, August to October is likely to be the peak sales months this time.
Typically, rabi season sowing is expected to start from November with cropping being completed by March. Accordingly, the company is expecting a 36 per cent growth in sales during these months to 34,000 units, as against 25,000 units sold in the same period last fiscal.
Sonalika, with a 12.5 per cent market share, is the third largest tractor-maker in the country after Mahindra and Mahindra and Tafe. Its tractor offerings vary between 20 HP and 120 HP.
“Ideally, sowing for the next season should begin around October –November. Good monsoon and infrastructure boom should see an upward movement in tractor sales,” he told BusinessLine.
In August, the company registered a 31 per cent growth and sold 4,887 tractors vis-à-vis 3,730 tractors sold in the same period last year. For the full year, the company expects an over 40 per cent jump in domestic sales to 1 lakh units, this fiscal. It had sold 70,000 units in FY17. Exports, which currently account for 15 per cent of its sales, are likely to grow to 15,000 units, a 25 per cent jump over last fiscal. Turnover (from domestic sales) is expected to be in the tune of ₹10,000 crore.
Kumar pointed out that the company’s margins may take a 2-3 per cent hit with the implementation of GST. Previously, the VAT rate was around 5 per cent, which has now been hiked to 18 per cent under the new indirect tax regime. Despite the increase in the tax rates, the company will not pass on the cost to customers, he said.