Escorts Kubota Limited announced robust growth in its tractor sales for December 2025, with the Agri Machinery Business Division recording a 38.5% year-on-year increase. The company sold 7,577 tractors in December 2025 compared to 5,472 tractors in the same period last year, demonstrating strong momentum in the agricultural machinery sector.

Tractor Sales Performance

The tractor segment showed impressive performance across both domestic and export markets. Domestic tractor sales reached 6,828 units in December 2025, marking a 36.1% growth compared to 5,016 units sold in December 2024. The domestic market benefited from several favorable factors including supportive government policies, lower GST rates, and continued state subsidies that enhanced affordability for farmers.

Export tractor sales demonstrated even stronger growth, with 749 tractors sold in December 2025 compared to 456 tractors in December 2024, representing a significant 64.3% increase.

Market Drivers and Industry Outlook

The domestic tractor industry sustained strong performance in December 2025, driven by multiple positive factors. The industry benefited from strong Kharif output, enhanced Rabi sowing compared to the previous year, increased water availability, and positive rural sentiment. These factors collectively contributed to heightened retail demand across the agricultural machinery sector.

Quarterly and Nine-Month Performance

The company's performance extended beyond the monthly figures, showing consistent growth across longer periods:

Construction Equipment Challenges

While the tractor segment showed strong growth, the Construction Equipment Business Division faced headwinds in December 2025. The division sold 812 machines compared to 873 machines in December 2024, representing a 7.0% decline. The company noted that December 2024 sales figures included pre-buying ahead of emission norm changes, making direct comparison challenging.

The Construction Equipment industry continues to face challenges from slow project mobilization, weak rental rates, and elevated costs from CEV Stage V compliance. However, the company observed visible improvement in sentiment in December compared to previous months, with government infrastructure spending and fund-flow initiatives expected to support gradual recovery into 2026.

Escorts Kubota Limited has received a significant tax demand order from Maharashtra's tax authorities, with the company disclosing the development to stock exchanges on December 30, 2025. The order pertains to input tax credit eligibility issues and carries substantial financial implications for the agricultural and construction equipment manufacturer.

Tax Demand Details

The Assistant Commissioner of State Tax, Pune South, Maharashtra passed the order on December 29, 2025, at 05:21 P.M. (IST). The comprehensive financial impact of this tax order includes multiple components that significantly affect the company's obligations.

Nature of Tax Issue

The tax demand centers around the eligibility of Input Tax Credit (ITC), a crucial component of the Goods and Services Tax (GST) framework. Input tax credit allows businesses to reduce their tax liability by claiming credit for taxes paid on inputs used in their business operations. The tax authority has questioned the company's claim for such credits, leading to the confirmation of the demand along with applicable interest and penalties.

Company's Response Strategy

Escorts Kubota Limited has indicated its intention to challenge the tax order through proper legal channels. The company plans to file an appeal before the appellate authority, which is the standard procedure for contesting tax demands under the GST framework. This approach allows the company to present its case and seek relief from the imposed tax liability.

Regulatory Compliance

The disclosure was made in strict compliance with SEBI Listing Regulations, specifically Regulation 30 read with Para A (20) of Schedule III. The company provided detailed information as required under SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024, ensuring transparency for investors and stakeholders.

The company secretary Arvind Kumar signed the disclosure, confirming the accuracy of the information provided to both BSE Limited and National Stock Exchange of India Limited. This development represents a significant regulatory matter that the company will need to address through the appropriate legal and tax advisory channels while maintaining compliance with all applicable regulations.