M & M’s tractor business turns more fertile than SUVs, CVs

M&M, Mahindra & Mahindra

Latest News – M&M’s tractors may not be as visible as its sports utility vehicles (SUVs) which vroom on Indian roads, but it is the tractor that is driving the auto major’s profitability while being a smaller contributor to revenues. As things stand this year, tractors could further expand its share in both revenue and profitability. This is because tractor sales, driven by prospects of a normal monsoon, have grown at 11 per cent this year against a decline in passenger vehicle sales.

The company’s profit before tax from the farm equipment segment (primarily tractors) rose 31 per cent last year to Rs 2,562 crore while the same from automotive (SUVs & commercial vehicles) declined over 17 per cent to Rs 2,162 crore. Automotive segment’s profit before tax was higher at Rs 2,623 crore in FY16 when farm clocked PBT of Rs 1,956 crore. However, it is not the first time that the farm segment contributed more to the company’s PBT.

The farm segment is much smaller in size, roughly half compared to the revenues of (Read More)

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