Hit by inadequate monsoon and a drought-like situation in Maharashtra and Karnataka, Mahindra & Mahindra (M&M) has lowered its growth forecast for the domestic tractor industry volume to nearly flat in the financial year 2027. The country’s largest tractor manufacturer had earlier projected tractor sales to grow 5% in FY27.
“You can see that there is a significant deterioration in the rainfall. The reservoir levels are much worse than what we would have thought it to be. So we believe these are 2 strong driving factors, and revise our forecast from plus 5% to flattish for the full year,” said M&M Executive Director and CEO for Auto and Farm Sector Rajesh Jejurikar after the company's second-quarter results (Q2FY27).
He added that higher input costs for farmers and drought conditions in Maharashtra and Karnataka, both very large tractor markets, have hit industry volume. As per Mahindra’s presentation, the southwest monsoon ended at 87% of the long-period average, while reservoir storage was 16% below normal as of October 15.
Earlier, India Meteorological Department (IMD) had said that India's 2026 southwest monsoon ended with a cumulative rainfall deficit of nearly 13% (recording 759.4 mm against the Long Period Average of 868.6 mm), marking the country's driest monsoon season since 2015.
The domestic tractor industry sold around 11.6 lakh units in the financial year 2026, registering growth of 23.47%. While the Southern and Western markets have been impacted due to lower rainfall, Mahindra said that the northern markets are performing better with Uttar Pradesh remaining strong and Madhya Pradesh showing signs of improvement.
Mahindra & Mahindra (M&M) reported a 25% year-on-year rise in consolidated profit after tax (PAT) to Rs 4,588 crore for the second quarter of FY27, led by strong growth in its automobile business and improved profitability across its financial services and technology businesses. Consolidated revenue from operations also rose 25% to Rs 57,553 crore during the July-September quarter.
The automobile business’ consolidated PAT grew 55% to Rs 2,388 crore, while revenue increased 39% to Rs 37,756 crore, supported by strong demand for SUVs. The farm equipment business recorded a decline in revenue and profitability. Total automobile sales grew 26% to 3.31 lakh units (includes sales by LMM & MEAL) in Q2FY27 while utility vehicle volumes came at 1.83 lakh units.
“Our Q2 FY27 Consolidated PAT growth of 25% reflects the resilience of our group and underlines the disciplined execution across businesses. Auto continued to grow on the back of strong consumer demand, while Farm experienced a marginal decline on account of the festive season shift,” said Anish Shah, Group CEO & Managing Director, M&M Ltd.
Shah added that Mahindra Finance maintained its growth trajectory while Tech Mahindra displayed acceleration in its transformation journey.
Jejurikar said, “SUV volume grew 26% YoY and retained market leadership in revenue market share. EV product range continue to show momentum with maintaining #1 position in revenue market share for the 1st half of the year. Auto consolidated PBIT margin grew to 8.8%, 110 bps up QoQ and Farm consolidated PBIT margin grew 20 bps QoQ despite significant hike in commodity prices.”
