Escorts Kubota and VST Tillers Share Price Jump as GST Cuts Boost Tractor Stocks

Market Performance

The stock market on September 4 witnessed strong action in tractor and agri-machinery stocks. Shares of Escorts Kubota surged nearly 14% intraday to ₹4,180, while VST Tillers Tractors and Mahindra & Mahindra also saw significant gains, rising up to 10% during the session.

This sharp rally was triggered by the GST Council’s decision to slash taxes on tractors, tyres, and farm machinery, which immediately lifted market sentiment.

GST Relief: The Big Trigger

The 56th GST Council meeting brought a wave of relief for the agriculture sector. The council announced multiple reductions in tax rates that directly impact tractor manufacturers and farmers alike.

• GST on tractors cut from 12% to 5%
• GST on tractor tyres and parts reduced from 18% to 5%
• GST on farm machinery for soil preparation, cultivation, harvesting, and threshing lowered to 5% from 12%
• Bio-pesticides and micronutrients now taxed at 5% instead of 12%

This sweeping tax relief is set to make tractors and farming equipment more affordable, easing the burden on farmers who have been struggling with high input costs.

Company Impact: Escorts Kubota and VST Tillers

Escorts Kubota

As a major player in the agri-machinery space, Escorts Kubota derives a large part of its revenue from tractor sales. The company’s stock surged 14% intraday, reflecting investor optimism. With GST cuts reducing costs on tractors and key components, the company is expected to see a strong demand push ahead of the festive season.

VST Tillers Tractors

VST Tillers Tractors also benefited from the announcement, with its stock price jumping close to 10%. Known for its compact tractors and tillers, the company stands to gain from lower taxation on machinery used for cultivation and soil preparation.

Mahindra & Mahindra

Although not in focus as sharply as Escorts Kubota, Mahindra & Mahindra shares also gained up to 10%, as GST relief covers a wide range of farming equipment where the company holds significant market share.

Rural Sentiment and Market Timing

The timing of this GST cut aligns well with positive rural conditions:

• Timely and widespread monsoon rains improving sowing activities
• Healthy water reservoir levels boosting irrigation prospects
• Kharif sowing acreage surpassing last year’s levels
• Early festive season demand setting in across rural India

With these favorable factors in place, tractor sales are expected to gain further momentum in the coming months.

Summary

The GST Council’s move to slash tax rates on tractors, tyres, and farming machinery has injected fresh energy into the stock market. Escorts Kubota jumped 14% to ₹4,180, while VST Tillers Tractors and Mahindra & Mahindra rose up to 10%, reflecting strong investor confidence.

By cutting GST to 5% across tractors, tyres, and key farm equipment, the government has eased costs for farmers and strengthened rural demand at a crucial time. The combination of lower taxation, healthy monsoon, and festive season ahead makes the outlook brighter for India’s tractor and agri-machinery industry.