Millat Tractors Limited (MTL) expects tractor sales to recover by 5-10% in FY27 as improving farm economics and government support measures help revive demand after two challenging years for the agriculture sector. At the company’s Annual General Meeting, as cited by research house AHL Research, MTL maintained a market share of around 60-65% despite subdued industry sales during FY26. Management attributed the weak market to poor agricultural performance and lower crop prices following the withdrawal of support prices.

The company believes demand will gradually improve, supported by the government’s indicative pricing mechanism and wheat support measures aimed at boosting farmers’ incomes.

Management noted that recent margin compression was largely driven by product mix changes rather than cost pressures. Gross margins eased to around 28-29% in recent quarters from 35-38% previously, as sales under the Punjab tractor scheme tilted towards lower-horsepower models, which carry relatively lower margins.

On the export front, MTL reported exports of about 1,300 tractors in FY26 and said it has expanded its presence in African markets after AGCO approved its products for sale there. The company has appointed dealers in East and West Africa and expects export volumes to rise in the coming years. Exports to AGCO in Mexico are also continuing.

Management further highlighted that more than 90% of tractor components are now localized through a network of over 200 domestic vendors, providing production flexibility and a competitive advantage.

In a diversification move, MTL disclosed that its electric bike assembly line is operational, with a range of premium EV models set to launch in mid-November 2026.

AHL Research said the company’s outlook remains supported by an expected cyclical recovery in tractor demand, growing export opportunities and its strong localization base.