Analysts say tractors are likely to see relatively faster recovery in the second half of this fiscal. The segments benefit from a bumper Rabi production and the forecast of a normal monsoon, which augur well for rural incomes. For tractors, the sentiment is only moderately negative as agricultural activities are exempt from the lockdown, and as the prospects for the crop season are better.
“Tractor industry volumes are expected to recover sooner than other segments, led by pent-up demand and positive rural sentiment, owing to healthy Rabi output and expectations of good monsoon. Channel checks indicate expectations of a single-digit decline in FY21,” analysts at Emkay Global Financial Services said in sector update.
“We expect Escorts to sustain the market share in domestic tractors ahead, led by the continuation of aggressive marketing efforts, the success of its dual-brand strategy – Farmtrac and Powertrac series, and focus on network expansion,” the brokerage firm said. The stock was; however, trading above 12-month target price of Rs 898 per share.
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