Faridabad-based tractor manufacturer and agri-solution provider Escorts Kubota Ltd (EKL) said its tractor brand Kubota generates 25% of revenue from the South India region for the company, whereas Powertrac tractor generates only 15% of revenue from the region. Southern region also contributes nearly 30% to its overall revenue in the agri-solution business. The company has three major brands in tractor segment – Kubota, Farmtrac and Powertrac.
In agri-solution segment, the major contributing states for the company are Tamil Nadu, Kerala and Telangana. Powertrac and Kubota tractors have significant presence Tamil Nadu, Karnataka and Telangana as Karnataka is the second largest market for tractors. EKL is a joint venture between Indian tractor and construction equipment manufacturer Escorts and Japanese tractor manufacturer and agri-solution provider Kubota Corporation, joining hands in 2022 by taking 10% stake in the former. The MD and Chairman of EKL is Nikhil Nanda, the third-generation scion of the Nanda family. Har Prasad Nanda founded the Escorts Group in 1942.
Rajan Chugh, Agri Solutions Business Division, EKL, said, “All the five states in the southern region significantly contribute to the rice transplantation business. We are also planning new solutions for horticulture with Kubota and Farmtrac Atom tractor series catering to the banana, sugarcane or orchids. We have also expanded our plant in Polivakkam, Tiruvallur district of Tamil Nadu.”
As part of its expansion, the EKL launched paddy rice-transplantation tractor under Kubota brand which will be imported from Japan. The company aims to sell nearly 3,000 units of Kubota rice-transplantation tractor in FY27. The company is also planning its new greenfield plant near Jewar, where the Noida International Airport will be coming up. The acquisition of land would be finished by March 2026 and the construction of the plant is expected to finish by FY28-FY29 and the facility aims to enhance to its capacity for tractors, agri-solutions and construction equipment machineries. In the next five years, the company wants to increase its production capacity of tractors, construction equipment machineries from 1,70,000 units to 3 lakh units.
Chugh also said that the agri mechanisation has seen a growth of 14% to 15% CAGR growth in the past five years due to the steps such as the creation for agri infra fund wherein the farmer gets loan to purchase asset with a 3% interest subvention. “Moreover, with the GST rationalisation, the farm machinery has become more affordable.”
Speaking about tractors moving to BS 3 &4 to BS 5, Chugh said, “We are observing a slowdown for a short period of time due to increase in price of the asset because of engine cost going up.”
Bharat Madan, Whole Time Director & CFO at EKL, said, “Moving from BS 3 or 4 engines to BS 5 engines will increase the cost for tractors by 10% to 15%. We are discussing with the government to delay the adoption of BS5 engines by at least one or two years.”
Madan also said that the installation of electric engines in tractors will increase the cost to Rs 12-14 lakh and the engine can be installed in below 35HP tractors.
Speaking about sourcing of raw materials and localisation, Chugh said, “We are trying adopt whatever technologies that Kubota has. On the other side, we are also global OEMs which have manufacturing units in India, especially for engines. We are investing for localisation of component manufacturing for products that we are bringing from Kubota and also aiming to make the manufacturing hub for tractors and other machineries. The localisation process is already taking place in the Faridabad plant.”