Mahindra Rise cuts F27 tractor outlook to flattish levels

Mahindra Rise cut its F27 tractor-industry outlook to flattish in October 2026 after the southwest monsoon forecast reached 87% of the long-period average and reservoir storage fell 16% below normal; farm profit after tax declined 9% year on year to Rs 1,053 crore in Q2 F27.

Why did Mahindra Rise cut its F27 tractor-industry outlook?

Mahindra Rise cut its F27 industry outlook because monsoon and water-storage conditions deteriorated between May and October 2026, increasing yield risks in tractor-dependent farm markets. The full June-to-September southwest monsoon forecast was 92% of the long-period average, or LPA, in May, declined to 90% in July and reached 87% by October.

India's reservoir storage moved from 19% above normal in May to 7% below normal in July and 16% below normal as of October 15. Mahindra Rise cited prolonged dry spells, poor soil moisture and lower reservoir availability, as well as negative terms of trade from input costs rising faster than retail prices. Maharashtra received 19% less rainfall than LPA over the prior three months, while Karnataka was reported to face drought conditions and rainfall 30% below LPA.

How did Mahindra Rise farm volumes and market share change in Q2 F27?

Mahindra Rise reported Q2 F27 farm-equipment volume of 116,000 units, down 6% year on year, while market share including Gromax fell 150 basis points to 41.5%. A basis point is one-hundredth of a percentage point. In H1 F27, volume increased 7% year on year to 274,000 units, but market share still declined 70 basis points to 43.4%.

The quarterly decline contrasted with the H1 volume increase, while H1 market share of 43.4% was below 43.6% in F26. The share had risen from 40.0% in F22 to 41.2% in F23, 41.8% in F24 and 43.3% in F25 before reaching 43.6% in F26. Farm-machinery revenue, including MITRA, nevertheless rose 5% to Rs 345 crore in Q2 F27 from Rs 330 crore in Q2 F26, following 30% growth from Rs 253 crore in Q2 F25.

How much did Mahindra Rise farm earnings decline in Q2 F27?

Mahindra Rise's farm consolidated revenue declined 6% year on year to Rs 9,572 crore in Q2 F27, while profit before interest and tax, or PBIT, fell 14% to Rs 1,376 crore and profit after tax, or PAT, fell 9% to Rs 1,053 crore. The larger PBIT decline than the revenue decline occurred alongside commodity-price hikes cited in the presentation.

Farm consolidated PBIT margin was 14.4% in Q2 F27, compared with 15.7% in Q2 F26 and 14.2% in Q1 F27. The result represented a 130-basis-point year-on-year decline but a 20-basis-point sequential increase. Mahindra Rise said the year-on-year margin decline occurred despite steep commodity-price hikes.

How did Mahindra Rise core tractor profitability compare with other farm businesses?

Mahindra Rise's core tractor PBIT margin was 17.6% in Q2 F27, down from 20.6% in Q2 F26 and 19.2% in Q1 F27. Core tractor, which includes tractors and exports from India but excludes Powerol and farm machinery, recorded revenue of Rs 7,652 crore, broadly unchanged from Rs 7,645 crore a year earlier but below Rs 9,964 crore in Q1 F27.

International subsidiaries reported a PBIT loss of Rs 130 crore in Q2 F27, compared with a Rs 164 crore loss in Q2 F26, as revenue fell to Rs 1,259 crore from Rs 2,003 crore. Other farm businesses, comprising Powerol, farm machinery and domestic subsidiaries, generated Rs 161 crore of PBIT on Rs 1,899 crore of revenue, versus Rs 197 crore on Rs 1,713 crore a year earlier. The 17.6% core tractor margin was above 17.4% in F23 and near 17.7% in F24, but below 20.4% in F26.

What is happening in Mahindra Rise's overseas farm subsidiaries?

Mahindra Rise said its exits from Sampo in Finland and Erkunt Foundry in Turkey were concluded, while restructuring at MAM in Japan was on plan. Management expects the divestment and restructuring actions to reduce losses in F27 versus F26, but did not quantify the expected reduction or specify a completion date for MAM.

Overseas tractor industries contracted in H1 F27, with a 15% decline in MAgNA's under-110-horsepower market, an 18% decline in Brazil's under-120-horsepower market and a 36% decline in Turkey. MAgNA's market share fell to 6.0% from 6.8% in H1 F26, Brazil's was unchanged at 6.7%, and Turkey's rose to 6.3% from 5.8%. Mahindra Rise disclosed an Oja Small Utility launch and refreshed 40-horsepower and 50-horsepower products for MAgNA.

Conclusion

Mahindra Rise's flattish F27 industry outlook combines domestic weather and farm-economics pressures with lower overseas-market activity and continuing subsidiary losses. Q2 F27 farm PAT fell 9% to Rs 1,053 crore, farm consolidated PBIT margin declined to 14.4%, and core tractor PBIT margin declined to 17.6% as the monsoon forecast reached 87% of LPA.

The next developments to watch are reservoir and rainfall conditions following the October 15 storage reading, the effect of Maharashtra's 19% rainfall deficit and Karnataka's 30% deficit on tractor demand, and management's stated aim to reduce F27 subsidiary losses through the completed Sampo and Erkunt Foundry exits and the MAM restructuring. Product activity in MAgNA includes the Oja Small Utility launch and refreshed 40-horsepower and 50-horsepower offerings.