Leading credit rating agency ICRA in its statement said: “Credit outlook for tractor industry remains 'Stable' supported by low leverage along with healthy liquidity.” ICRA pointed out that commodity pressures are likely to moderate margins in FY22 from previous year levels.
Statement by the Vice President, ICRA, Mr. Rohan Kanwar Gupta reads: "The credit outlook on tractor industry remains 'Stable'. Despite expectations of some margin pressure, the operating margins for most OEMs in the industry are expected to remain at healthy levels, with return indicators being robust. OEMs continue to focus on developing new application-oriented products and are working on emission norm related product launches." He adds:"In line with ICRA's stable outlook on the industry, the credit profiles of OEMs are expected to remain healthy, supported by limited debt, healthy cash and liquid investments and limited investment plans." Besides, the rating agency expects a 1-4 percent YoY growth in domestic tractor volumes in FY22.
"Even as uncertainty with regard to the evolution of the pandemic exists, the underlying demand drivers for the industry remain intact. Expectations of healthy rabi cash flows, continuation of various Government support programmes, healthy financing availability and a normal monsoon forecast, are likely to aid farm sentiments," the agency said
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