The Hindu Business Line : Farm equipment cos shine

The market seemed to have picked up some positive cues from SBI’s move to soften its interest rates on loans to the farm machines including tractors as also for the four- and two-wheelers. Stocks of automobile companies, many of which makes tractors, moved up on this added factor — prospect of higher tractor sales, according to market sources. The leading bank on Wednesday announced rate cut by 1 to 2 percentage points for the agriculture implement sector durin g the present festive season till December 31, 2007. SBI has also cut rates for vehicle loans in the range of between 0.50 and one percentage point.

Downtrend

During the current fiscal, the industry was showing a downward trend as spending in the domestic farm sector was stagnating, industry insiders added. The tractor industry grew at a robust rate of 30 per cent in 2004-05. The market leader is M&M, followed by Bajaj Auto, Eicher, VST Tillers Tractors, Punjab Tractors and HMT. The removal of import duty on second hand tractors has increased competitiveness, experts said. Analysts felt that other banks are likely to follow the SBI trail of rate reduction. M&M shot up by around 2.5 per cent. Escorts’ gain was 1.35 per cent. Punjab Tractor was up around 1 per cent. But VST Tillers, Bajaj and HMT were marginally down at close.

Jayanta Mallick

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