Shares of tractor makers jumped sharply on Thursday, September 4, after the GST Council slashed tax rates on tractors and related parts, providing a major boost to companies in the agri-machinery space.
Escorts Kubota, VST Tiller Tractors shares rally
Escorts Kubota Ltd. rose as much as 8.7 per cent to Rs 4,000, while VST Tillers Tractors Ltd. gained over 4 per cent to Rs 5,315 after rising 17 per cent in pre-open trade. Shares of Mahindra & Mahindra also surged 6.5 per cent, hitting an intraday record high of Rs 3,550 before settling slightly lower. Swaraj Engines, a Mahindra subsidiary, also traded with gains of around 4 per cent.
Tractor makers stock surge: GST rate cut triggers rally
The rally came after the GST Council on Wednesday night announced a sharp reduction in GST on tractors—from 12 per cent to 5 per cent. The GST rate on tractor tyres and parts was also reduced from 18 per cent to 5 per cent, improving affordability for farmers and dealers alike.
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Sector Outlook Strengthens
The move is especially significant for Escorts Kubota, where 87 per cent of Q1 revenue came from agri-machinery products directly impacted by the GST cut. VST Tillers also derives a large portion of its business from tractors, making the company a clear beneficiary.
Mahindra & Mahindra, India’s largest tractor maker, saw investor interest rise as well. The company gets 33 per cent of its domestic volumes from the tractor segment, which contributed 25 per cent to its topline in FY25.
The cut in input and product GST is expected to reduce acquisition costs, boost rural demand, and improve overall margins across the value chain — from manufacturers to dealers.
