Drought sparks fears for tractor sales

Mahindra & Mahindra already saw tractor sales fall 2.4% from the previous month and 4.5% on a year-to-year basis.

Two-wheeler makers also seen at risk: Hero MotoCorp falls 0.4%, while Bajaj Auto loses 0.8%.

Analysts are particularly concerned that drought will hit auto sales during the critical festival season in the second half of the year when companies use promotions to bolster sales.

"To some extent the slowdown in tractor sales of M&M has been factored in, and UVs would provide support," said Yaresh Kothari, an analyst at Angel Broking, referring to utility vehicles. "The impact of drought would be visible more in the second half of FY13 after festive season for two-wheeler manufacturers."