The tractor industry is expected to perform well, thanks to favourable monsoon conditions, which will benefit the rabi crop and boost rural demand. This positive sentiment is a key factor to watch for tractor companies like Escorts and M&M, both of which are likely to benefit.

In addition, the onset of the festive season across regions is expected to further support growth. Analysts report a significant rise in tractor inquiries, indicating strong potential for these companies to outperform the broader industry in FY25.

In an interaction with CNBC-TV18, Anish Shah, MD and CEO of Mahindra & Mahindra, in August, mentioned seeing early signs of recovery.

Shah stated a good monsoon has provided further momentum, and a full recovery in the tractor sector is anticipated in the second half of the year, with Navaratri expected to drive strong demand for the segment.

Shah expects a 5% growth for the tractor business in the current financial year.

Meanwhile, the FTSE adjustment is taking place today, with the settlement set for September 23. According to IIFL, Escorts Kubota is likely to see inflows, while Nuvama expects M&M to receive approximately $60 million in inflows.

Also Read | August auto sales preview: Two-wheelers and tractors may outperform; passenger and commercial vehicles likely to struggle