Mahindra Cuts Tractor Industry Growth Forecast Amid Weak Monsoon

India’s Mahindra & Mahindra has lowered its tractor industry growth forecast for the current financial year to flat growth from its earlier estimate of 5%. The company cited weak monsoon rainfall, lower reservoir levels and rising agricultural input costs, which have affected farmers’ purchasing power and reduced expectations for tractor demand.

The company warned that weaker tractor demand could put pressure on its core tractor business margins in the third quarter, although conditions are expected to improve by the first quarter of fiscal 2028. Despite the challenges in the agricultural sector, Mahindra reported a 12.9% increase in second-quarter profit after tax to ₹51.02 billion. Revenue also grew 27.1% to ₹424.77 billion, supported by strong demand for its SUVs, including the Scorpio and Thar.

Mahindra recorded a 26% increase in total vehicle sales during the quarter, while price hikes and cost-efficiency measures helped manage rising input costs. Following the results, the company’s shares gained 5.6% to close at ₹3,127.50, reaching a nearly two-month high. The revised forecast highlights the impact of weaker rainfall on India’s rural economy and agricultural demand.

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