With good monsoon this year, a large part of corporate India is set to post handsome growth in the coming two quarters in sales and profitability ranging between 15 and 45%, as per Assocham reports.
"The firms benefiting directly from abundant rainfall relate to those in the irrigation infrastructure, farm equipment like tractors, seed development and the food processing", the ASSOCHAM comprehensive Paper 'Monsoon Showers Fortune on Farm Related Firms' noted.
With Monsoon being the lifeline of the Indian economy, it is no surprise that good rains would bring good fortune not only to the companies engaged in the farm related sectors but also the entire macro picture," ASSOCHAM President Mr. Sunil Kanoria said.
These stocks to gain from good monsoon:
Mahindra and Mahindra
With a good monsoon, sale of tractors for Mahindra and Mahindra is expected to rise. The sale during the Sep-Mar 2017 window is expected by at least over 15 per cent. Mahindra and Mahindra is the largest tractor manufacturer in the world.
Rallis India is a subsidiary of the Tata Group which is a key player in the agriculture business. Bountiful rains are expected to generate 33.58% higher sales during the monsoon months.
The company has reported a profit of Rs 174.20 crores for its first quarter of 2016, implying a 55% increase in sales.
Coromandel International Ltd
It is a mid cap company operating in fertilizers sector and is likely to see a trend of surge in sale during the months Sep-March, post the active period of monsoon and sowing of seeds.
The company is expected to see a rise in sales by 5.13% for the period March -September 16, and a 19.82% for the period September 16-March 17.
Jain Irrigation Systems is a leading manufacturer of micro irrigation systems, piping, tissue cultured plants, solar photovoltaic and solar water heating systems. As per Assocham report, a growth of 17-18% is expected in the sales during the monsoon season.
The leading sugar firms like Balram Chini and Mawana Sugar are projected to improve their performance significantly in the coming months, thanks to rain Gods and firming of prices.