The Indian tractor industry could clock strong double-digit volume growth this year provided monsoons pan out as well as expected, said Bharat Madan, CFO of Escorts in an interview to CNBC-TV18.
Apart from monsoons, government policies that benefit the agricultural sector like higher minimum support prices could also boost sales, he said.
The company’s stock price has seen a phenomenal run over the last one year from roughly Rs 129 to Rs 520. This has also been backed by good sales numbers due to good monsoon last season after two drought years.
Madan said the company is now internally working on cutting costs and targeting double-digit margins too over the next couple of years. In nine months this year, the company has done margin of nearly 8 percent.
The company is also looking to increase export volumes and aims to hit nearly 10,000 units in tractor sales in the long term, he said.
With utilisation levels of the tractor unit at close to 65 percent and construction equipment at 30-35 percent, Madan said there would be no need for capacity enhancement over the next 3 years.