M&M's tractor sales momentum crucial for uptick from current levels

Capital allocation and auto segment volume trajectory are the other triggers

The gradual recovery in tractor sales and margin performance of Mahindra & Mahindra (M&M) stood out in otherwise lacklustre June quarter results. The overall volume decline of 56 per cent over the year-ago quarter translated to a similar dip in revenues in the quarter. While demand for tractors limited the sales fall in that segment to 24 per cent, the auto segment’s volumes collapsed 74 per cent.

A year ago, sales in the auto segment, comprising passenger and commercial vehicles, were 54 per cent higher than tractors; in the recent quarter, tractor sales were more than twice that recorded by the