Tractor firms may do marginally better

 The tractor industry is expected to marginally better its performance this fiscal, especially in the second half, after a three-year decline in compound annual growth rate.

 Though industry sales dipped by 25.13 per cent in 2002-03 to 1,60,969 units, a good monsoon, depleting inventory, rising rural credit and focus on mechanised farming and agricultural exports are expected to improve sales in 2003-04.

 While sales volumes were down 15 per cent in April-August 2003, the markets expect the second half to be better. In fact, major stocks have gained between 20 per cent and 37 per cent over the past couple of trading sessions.

 The Mahindra & Mahindra scrip, for instance, has gained from Rs 199.60 on September 1, 2003 to Rs 271.65 on October 7. Punjab Tractors has gained from Rs 167.65 to Rs 223.25, while Eicher has improved from Rs 49.05 to Rs 60.20.

 India is one of the largest markets for tractors in the world, but stagnating farm incomes, erratic rainfall, excess capacities and high inventories have compounded the industry