WERE ANY more evidence needed to reflect how surprising 2020 has been, consider tractor sales. In April Hemant Sikka, president of Mahindra & Mahindra’s farm-equipment business—which makes around 300,000 of the things a year, more than any other company anywhere—sat in his Mumbai flat near his shuttered main factory wondering if he still had a business. India’s nationwide lockdown that began a couple of weeks earlier led analysts to foretell doom for all manner of vehicle sales. Instead, Mr Sikka’s main challenge has turned out to be meeting unprecedented demand, both at home and abroad.
The Indian conglomerate’s tractor sales have broken records since May; production is operating at 100% of capacity. At its American factories the company has added a second shift. Regional managers around the globe are clamouring for tractors to replenish sparse dealer lots.
After collapsing in March, the share price of Mahindra & Mahindra has doubled, pulled along by the booming tractor division. So have the share prices of Deere and AGCO, two American manufacturers of farm equipment, suggesting that investors are eyeing bountiful profits from the industry as a whole.
Mahindra’s particular niche—durable, low-horsepower machines—has been especially sought-after. In America that is the fastest growing segment, with sales...
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