Mahindra & Mahindra is eying revenues of $2.5 billion from its farm equipment division in the current financial year. The division comprises tractor manufacturing and a small portion of other farm-related equipment like combined harvesters.
This would be 4-5 per cent higher compared with the revenues accrued from division in the last financial year, according to Sanjeev Goyle, senior vice president - Marketing & AppliTrac of Mahindra & Mahindra Limited.
The company expects this marginal growth in revenues due to a 5-6 per cent negative growth in tractor sales witnessed across the industry in the first half of the current financial year. It hopes for a better performance in the second half owing to improved agriculture scenario.
M&M, which accounts for a 42 per cent market share in tractor sales between its two brands of Mahindra and Swaraj, sold a little over 100,000 units in the April-September period. North India was showing a positive growth while there was a slowdown in the South due to the failure of monsoon during the kharif season, he said.
AP’s contribution
Contribution from Andhra Pradesh, where the company has a 52 per cent market share, has come down to 10 per cent from the previous 12 per cent, he said unveiling an advertisement campaign specific to the state. For the first time, Mahindra has roped in a Telugu movie star, Mahesh Babu, to endorse the brand.
Responding to a question Goyle said the present slowdown had not impacted the capacity expansion plans and the tractors from its new line at the Andhra Pradesh facility with an annual capacity of 100,000 units would be rolled out from January next year.
He said engaging tractors for non-farm activities like transport was going to touch 50 per cent from the current 45 per cent in the near future.
It has so far sold 25,000 units of its 15 horse-power Mahindra tractor launched last year as an entry-level option at a price point of around Rs 2 lakh, according to Sandeep Jaiswal, vice president-sales.
