Mahindra Lifts Tractor Growth Outlook for FY26 to Low Double Digits After Strong Q2 Performance

Key Highlights:

• Mahindra revises FY26 tractor growth forecast to low double digits.

• September 2025 tractor sales up 45% year-on-year.

• GST cut saves ₹40,000–₹60,000 per tractor.

• Farm division market share hits 43%, PBIT up 48%.

• Industry outlook aligns with ICRA’s 8–10% growth projection.

September 2025 witnessed a significant boost in tractor demand as favorable weather, healthy reservoir levels, and a major GST reduction lifted the rural economy. Mahindra & Mahindra (M&M), the world’s largest tractor manufacturer, has now raised its tractor industry growth forecast for FY26 to low double digits.

Also Read: Mahindra Tractors Sales Report October 2025: 72,071 Units Sold, 12% Growth

Mahindra Revises Forecast on Strong Rural Demand

Mahindra had earlier projected a modest 5–6% growth for the tractor industry this year. However, the company has now revised the outlook to low double digits after witnessing strong sales momentum in recent months.

Rajesh Jejurikar, Executive Director and CEO of M&M’s Auto and Farm Sector, said, “The tractor outlook we’d given at the beginning of the year was 5 to 6% industry growth. We're increasing that to low double digits because the year's been much better, the rainfalls have been good, reservoir levels are good, and we've also factored in the benefit of the lower GST.”

The revision aligns with ICRA’s latest industry projection for FY26, which now expects 8–10% growth, up from the earlier 4–7% forecast.

GST Cut and Monsoon Boost Tractor Sales

The major growth drivers include a 7-percentage-point GST reduction in September 2025 and strong monsoon rains that improved rural liquidity.

Industry executives estimate that the GST cut could save buyers between ₹40,000 and ₹60,000 per tractor, making them more affordable for farmers and rural entrepreneurs.

In September 2025, wholesale tractor volumes jumped 45% year-on-year to 146,180 units, reflecting a strong recovery in rural demand.

During FY2024–25, the domestic tractor industry came close to its previous peak, selling 939,713 units, marking 8.36% growth compared to the previous year.

M&M’s Farm Division Achieves Record Market Share

Mahindra’s Farm Equipment Division reported an exceptional performance in Q2 FY26. The company achieved its highest-ever second-quarter market share at 43%, a gain of 50 basis points.

The division’s volumes surged 32% to 123,000 tractors, while standalone profit before interest and tax (PBIT) grew 48% to ₹1,684 crore. Margins expanded by 220 basis points to 19.7%, with core tractor PBIT margins improving to 20.6%.

Consolidated revenue from the farm segment rose 25% to ₹10,225 crore, and profit after tax (PAT) jumped 45% to ₹1,163 crore.

Strong Momentum Across Auto and Farm Businesses

Anish Shah, Group CEO and Managing Director of M&M, said, “We are pleased with the strong execution and solid performance delivered across the group in Q2 FY26. Auto and Farm sustained their leadership with consistent gains in market share and profitability.”

Jejurikar added that M&M’s auto and farm businesses continue to reinforce their leadership, noting a 390 basis point gain in SUV revenue share year-on-year in Q2 FY26.

Also Read: Tractor Industry Outlook Brightens: ICRA Projects 8-10% Growth for FY2026 on Strong Monsoon and GST Cut

CMV360 Says

Mahindra’s upgraded growth outlook highlights a positive shift in India’s rural economy. With better monsoons, healthy reservoir levels, and the government’s GST cut driving affordability, the tractor industry is set for robust expansion in FY26. Mahindra’s strong performance and leadership in both farm and auto segments reflect its continued dominance and confidence in the country’s agricultural recovery.