Tractor sales volume is predicted to boost by a single digit of 3-6 per cent this financial year even though Covid-19 second wave. 27 per cent extension noted in financial year 21, Ind-Ra ( India Ratings and Research) said on Thursday.
Rating Agency said in an interview that tractor sales volume were expected to increase from the second quarter as restrictions and lockdowns have been relaxed.
And it said that the macroeconomic tailwinds remain constant for the rural economy, together with the expected normal monsoon, improved rural income and the forecast of a good harvest of Kharif.
OEMs (original equipment manufacturers) released data. Ind-Ra said the tractor industry saw a growth in sales volume in June 2021 even though Covid-19 second wave affected April-May 2021 sales volume, which decreased sales to 76 per cent of the financial year 2020 21 in the fourth quarter.
Nonetheless, it said given that the prior quarter is by and large a primary quarter with seasonally good sales of around 33%, particularly in May and June for land groundwork for the Kharif season, the business losses are probably not going to be recuperated in the resulting part of the year.
Ind-Ra further said farm tractor purchase might be conceded for putting something aside for higher clinical costs amid the expectation of a third Coronavirus wave.
"On the off chance that the nation observes a third wave which is pretty much as extreme as the subsequent one coming about in nationalized lockdown, the development on a year-on-year premise could be flattish," it said.
On the effect of the second wave of COVID-19, the rating agency said it was more widespread and severe in rural India compared to the first wave, which was primarily restricted to urban regions.
Collectively, the top five states are Uttar Pradesh, Madhya Pradesh, Rajasthan, Maharashtra and Gujarat, accounting for 56 per cent of the tractors sold in India, recorded around 34 per cent of the total COVID-19 cases in India, with 40-75 percent of their cases during the second wave, being recorded in rural districts.
"Ind-Ra accepts the subsequent wave and the expectation of an ensuing wave could modify the utilization inclination in country districts for putting something aside for unforeseen clinical use," it said.
Additionally, lower-pay levels in the principal quarter of the fiscal year 2021-22, also as a loss of lives, could hose shopper assessments and henceforth farm truck buy might be conceded, it said adding "this will particularly be in the event of substitution interest, which represents 30-35 percent of the complete volumes".
Be that as it may, steps were taken by the middle to further develop ranch pay, including rural framework store, expanding endowment for composts and least help cost for rabi yields and high acquirement of harvests in the monetary year 2020-21, has prompted higher money in possession of ranchers and this manner empowering the acquisition of farm vehicles.
"Additionally, the public authority's push on country foundation is probably going to help development in non-horticultural farm trucks, which accounts for around 30 per cent of the tractor volumes," Ind-Ra said.
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