See double-digit growth in tractor industry in FY18; uptick in market share: Escorts

The Escorts stock is trading near all-time highs as strong tractor sales continue. The management expects FY17 to end with 23 percent growth.

In an interview with CNBC-TV18, Bharat Madan, CFO, Escorts says that they expect the growth to be better next year. They expect double-digit growth in tractor industry in FY18, if monsoon is normal, said Madan.

Madan is also confident of the market share for the company going up by 1 percent next year from the current 10.8 percent.

Below is the verbatim transcript of the interview.

Anuj: Big sales growth in March, 23 percent but I am more interested in the overall number, 7,000 is a number that you achieved in March. What is the likely net run rate from here?

A: In the last one year we did about 62,000-63,000 total number in terms of tractors, so it is roughly 5,000 plus average for last year. However, we expect the growth to be better next year.

Latha: What is giving you this confidence? Describe to us the way in which rural demand is shaping up?

A: We have seen the strength happening in the last few months. If you look at our stronger markets specially north and central India and about a year ago we had seen more success happening in the southern market, which is not be a strong market for us but now we are seeing the strength happening in the last three-four months and markets like Uttar Pradesh, Madhya Pradesh, Rajasthan, all picked up and Punjab which was not growing for the last three years has started showing some growth now. Haryana has done very well. So, all the factors are good and in stronger market we are seeing good trajectory happening, rabi crop is expected to be proper this time. So these factors are adding up to this. There may be some blips in-between like the goods and service tax (GST) transition maybe you can see some of that happening depending on when the tax gets introduce from July 1 or September 1. I think that will have some temporary blip but overall the trend looks well and if the monsoon also happens to be good then we can have a peak year next year.

For entire interview, watch accompanying video.