Tractor stocks rally up to 14% on GST rate cut: Here's how Mahindra, Escorts Kubota, VST Tillers shares are performing

This comes on the heels of sweeping GST (Goods and Services Tax) rate cuts, which were announced at the 56th GST Council meeting on Wednesday night.

The panel reduced GST on tractors from 12% to 5%. Additionally, the rate on tractor tyres & parts was cut down from 18% to 5%.

Shares of Mahindra & Mahindra zoomed as much as 8.03% to an intra-day high of ₹3,550 apiece. The scrip, currently trading 5.93% higher at ₹3,480.90 per equity share, is the top gainer of the NIFTY 50 pack.

The stock of Escorts Kubota surged 13.66% to the day’s peak of ₹4,180 per equity share. It was trading at ₹3,791.50 apiece, up 3.10%, as of 1:19 pm.

Shares of Swaraj Engines, a Mahindra & Mahindra subsidiary, rose as much as 7.44% to a peak of ₹4,324 apiece during Thursday’s trading session. At the time of writing, they stood at ₹4,147 apiece, having risen 3.05%.

VST Tillers Tractors' stock soared 6.81% to an intra-day peak of ₹5,463.50 per equity share. The scrip stood at ₹5,314.50 apiece, up 3.90%.

The GST rate was changed across the sectors, including FMCG, insurance, auto, cement, and agriculture, among others.

Tractor industry volumes to grow in FY26

In a statement on Monday, rating agency ICRA said that the tractor industry could see volume growth in the range of 4-7% in the current fiscal (FY26), supported by a favourable monsoon.

During the previous fiscal (FY25), the industry reported volume growth of 7%.

Furthermore, pre-buying ahead of the TREM V (Tractor Emission Norms Stage V) emission norms, proposed to take effect from April 1, 2026, could further aid volume growth, the rating agency added.

Demand for tractors remained strong in July 2025, with wholesale and retail volumes rising by 8% and 11% year-on-year (YoY), respectively.

According to ICRA, a favourable monsoon is expected to bolster agricultural activities and industry volumes.

The India Meteorological Department (IMD) has forecast above-normal precipitation at 106% of the long-period average (LPA) during the current monsoons, as per its second long-range forecast.

Additionally, the third Advance Estimates for kharif and rabi crops for AY2024-25, released by the Ministry of Agriculture and Farmers Welfare (MA&FW) in May 2025, indicate a YoY increase of 7.9% and 4.5%, respectively, in foodgrain output.

This provides optimism regarding an improved agri-economy and demand for tractors, it added.