sh 2013 q2 1 icra tractors

8/12/2019 Sh 2013 q2 1 Icra Tractors

http://slidepdf.com/reader/full/sh-2013-q2-1-icra-tractors 1/5

1

ICRA LIMITED

Corporate RatingsAnjan Deb Ghosh

+91 22 6179 6392

[email protected]

Contacts:

Subrata Ray

+91 22 6179 6386

[email protected]

Shishir Kumar

+91 124 4545 822

[email protected]

Kinjal Shah

+91 22 6179 6381

[email protected]

ICRA RESEARCH SERVICES

INDIAN TRACTOR INDUSTRY

Light at the end of the tunnel

June 2013

mailto:[email protected]










2

ICRA LIMITED

TABLE OF CONTENTS

1. Overview…………………………………………………..……………………………………………………………………………………..……………….…………………………..……….….….3 2. Sales Performance: Trends and Outlook

Trend in Yearly Sales Volumes..……….….....………………………………………………………………………………………………………………………………………….…….…....4

Trend in Monthly Sales Volumes.…..…...………………………………………………………………………………………………………..…………………………………...…….…….4

3. Competitive Landscape: Trends and Outlook

Impact of Regional Variations in Growth.……......……….......................................................................................................................................5

Product and Market strategies of OEMs...……………….........................................................................................................................................6

4. Region-Wise Performance: Trends and Outlook

Trend in Sales across Geographies….....................................………………………………………………………………….……………………….…………….…………………7

5.

Special Feature: Market Profile (North)Sale Volume, Market Share and key Characteristics: Punjab .............................................................................................................................8

Sale Volume, Market Share and key Characteristics: Haryana ...........................................................................................................................9

Sale Volume, Market Share and key Characteristics: Uttar Pradesh..................................................................................................................10

Sale Volume, Market Share and key Characteristics: Rajasthan.........................................................................................................................11

6. Export Market: Trends and Outlook

Export potential…...................................………………………………………………………………………………….…….………………………….…………………..………..….12

7. Farm Mechanisation Level: Trends and outlook

Implements market in India….........……………………………………………………………………………………………………………………………………………………….….…..13

8. Agri-Output and Monsoon Performance: Trends and outlook

Rabi crop update..........................................................................................................................................................................................…15

Monsoon Update............................................................................................................................................................................................15

9. Quarterly Performance trend of listed tractor OEMs

Escorts Limited ..........................………………………………………………………………….………………………….…….…….……………………………...……………..….……17

Mahindra and Mahindra Limited…………………….…………………………………………………………………..……….………………………….………..………………...……...20



3

ICRA LIMITED

Overview

Indian tractor industry has started the year strong with robust 31% YoY growth in sales in Apr-13, followed by healthy volume growth in May-13 as well (M&M andEscorts has reported 24% and 17% growth YoY respectively). This volume recovery stands out in a backdrop of ~4% decline in volumes during Q4FY13, and virtually

flat sales in Q3FY13. Recent buoyancy in tractor sales is a result of festivals like Gudi Padwa and Navratra falling in April, instead of March in the previous year;

positive sentiments in farming community from a near-normal monsoon forecast for the current year; besides build-up of channel inventory by some market

participants. Further, regions in South and West are also showing initial signs of turnaround, after witnessing flagging sales growth over the last five quarters. FY14

growth is however expected to be modest and ICRA expects volume to expand by 5%-7%. Growth estimates could be revised upwards, contingent on the timing and

spatial distribution of 2013 monsoons, and its impact on the Kharif crop. We maintain a volume CAGR of (8-9%) for the tractor Industry over the next five years as

long term drivers continue to remain favourable. Government of India (GOI) remains committed towards rural development and agri-mechanisation; besides other

factors like scarcity of farm labour, healthy credit availability, moderate penetration and shortening replacement cycle, continue to encourage demand for tractors.

While tractor sales declined as much as 3% in FY13, growth across different parts of the country was pretty un-even. Central region, comprising of Madhya Pradesh

and Chhattisgarh was at the fore-front with 36% YoY sales growth in FY13, albeit on a small base; while Northern region, the largest tractor market of the country

reported steady 10% growth. In contrast, South and West saw sharp volume contraction of 27% and 23% respectively, during FY13. Inter-play of growth variation

across regions also impacted the market share of tractor manufacturers. FY13 was a challenging period for original equipment manufacturers (OEMs) as they dealt

with receding demand, and industry over-capacity. Tractor manufacturers however maintained pricing discipline by not resorting to aggressive discounting, and this

enabled them to maintain their profit margins in the face of falling utilisation levels. Among key players, market leader M&M was able to increase profitability, in

spite of volume declines, supported by cost control initiatives and price increases to pass on cost inflation.

Table 1: Volumes

Volumes YoY Growth (%)

FY09 FY10 FY11 FY12 FY13 FY14e FY09 FY10 FY11 FY12 FY13 FY14

Domestic + Export 345,827 441,174 545,128 607,658 590,915 632,279 0% 28% 24% 11% -3% 7%

Source: CMIE Database; ICRA Estimates

INDIAN TRACTOR INDUSTRY

Light at the end of the tunnel

June 2013 ICRA RESEARCH SERVICES



4

ICRA LIMITED

Please contact ICRA to get a copy of the full report

CORPORATE OFFICE

Building No. 8, 2nd Floor,

Tower A, DLF Cyber City, Phase II,

Gurgaon 122002Ph: +91-124-4545300, 4545800

Fax; +91-124-4545350

REGISTERED OFFICE

1105, Kailash Building, 11th

Floor,

26, Kasturba Gandhi Marg,

New Delhi – 110 001

Tel: +91-11-23357940-50

Fax: +91-11-23357014

CHENNAI

Mr. Jayanta Chatterjee

Mobile: 9845022459

Mr. Leander RayenMobile: 9952615551

5th Floor, Karumuttu Centre,

498 Anna Salai, Nandanam,

Chennai-600035.

Tel: +91-44-45964300,

24340043/9659/8080

Fax:91-44-24343663

E-mail: [email protected]

[email protected]

HYDERABAD

Mr. M.S.K. Aditya

Mobile: 9963253777

301, CONCOURSE, 3rd Floor,No. 7-1-58, Ameerpet,

Hyderabad 500 016.

Tel: +91-40-23735061, 23737251

Fax: +91-40- 2373 5152


MUMBAI

Mr. L. Shivakumar

Mobile: 9821086490

1802, 18th Floor, Tower 3,

Indiabulls Finance Centre,

Senapati Bapat Marg, Elphinstone,

Mumbai 400013

Ph : +91-22-6179 6393

6179 6300/01

Fax : +91-22-2433 1390


KOLKATA

Ms. Anuradha Ray

Mobile: 9831086462

A-10 & 11, 3rd Floor, FMC Fortuna,

234/ 3A, A.J.C. Bose Road,

Kolkata-700020.

Tel: +91-33-22876617/ 8839,

22800008, 22831411

Fax: +91-33-2287 0728


PUNE

Mr. L. Shivakumar

Mobile: 9821086490

5A, 5th Floor, Symphony,

S. No. 210, CTS 3202,

Range Hills Road, Shivajinagar,

Pune-411 020

Tel : +91- 20- 25561194,

25560195/196,

Fax : +91- 20- 2553 9231


GURGAONMr. Vivek Mathur

Mobile: 9871221122

Building No. 8, 2nd Floor,

Tower A, DLF Cyber City, Phase II,

Gurgaon 122002

Ph: +91-124-4545300, 4545800

Fax; +91-124-4545350


AHMEDABADMr. Animesh Bhabhalia

Mobile: 9824029432

907 & 908 Sakar -II, Ellisbridge,

Ahmedabad- 380006

Tel: +91-79-26585049/2008/5494,

Fax:+91-79- 2648 4924


BANGALOREMr. Jayanta Chatterjee

Mobile: 9845022459

'The Millenia', Tower B,

Unit No. 1004, 10th Floor,

Level 2, 12-14, 1 & 2, Murphy Road,

Bangalore - 560 008

Tel: +91-80-43326400,

Fax: +91-80-43326409




































5

ICRA LIMITED

ICRA Limited

An Associate of Moody's Investors Service

CORPORATE OFFICE

Building No. 8, 2nd

Floor, Tower A; DLF Cyber City, Phase II; Gurgaon 122 002Tel: +91 124 4545300; Fax: +91 124 4545350

Email: [email protected], Website: www.icra.in

REGISTERED OFFICE

1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi 110001

Tel: +91 11 23357940-50; Fax: +91 11 23357014

Branches: Mumbai: Tel.: + (91 22) 24331046/53/62/74/86/87, Fax: + (91 22) 2433 1390 Chennai: Tel + (91 44) 2434 0043/9659/8080, 2433 0724/ 3293/3294, Fax

+ (91 44) 2434 3663 Kolkata: Tel + (91 33) 2287 8839 /2287 6617/ 2283 1411/ 2280 0008, Fax + (91 33) 2287 0728 Bangalore: Tel + (91 80) 2559 7401/4049 Fax

+ (91 80) 559 4065 Ahmedabad: Tel + (91 79) 2658 4924/5049/2008, Fax + (91 79) 2658 4924 Hyderabad: Tel +(91 40) 2373 5061/7251, Fax + (91 40) 2373

5152 Pune: Tel + (91 20) 2552 0194/95/96, Fax + (91 20) 553 9231

© Copyright, 2013 ICRA Limited. All Rights Reserved.

All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the

information herein is true, such information is provided 'as is' without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied,

as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be

liable for any losses incurred by users from any use of this publication or its contents.

sh 2013 q2 1 icra tractors

Documents