Monsoon is expected to be normal in the country this year. This can increase the income of rural India. Rural India accounts for 53% of India’s GDP, so the growth of this sector will also support India’s economy.
If yields are good this year, then inflation can also be controlled. Experts say that rising inflation is a big concern. Especially at a time when the country is experiencing a second wave of coronavirus infection.
Brokerage firm Motilal Oswal says a good monsoon will benefit two-wheelers, autos, rural financing, agrochemicals and select FMCG companies.
Here we are telling you about some stocks which will have good effect of better monsoon.
Expert: Gaurav Garg, head of CapitalWaya Global Research
Coromandel International – Buy
Target: Rs 865-875
The Murugappa Group company is the second largest company in the country making Coromandel fertilizer and other agri inputs. It has a strong hold in Andhra Pradesh and Telangana. The company will benefit from increased demand in villages and normal monsoon.
Dhanuka Agritech – Buy
Target: Rs 890
There is no debt on the company and its grip is on the market across India. It manufactures over 300 products including herbicides, insecticides, fungicides and plant growth regulators.
Escorts – Buy
Target: Rs 1,380-1,390
Escorts manufactures farming machines, tractors and other equipment. A better monsoon will boost the company’s sales.
Kaveri Seed Company- Buy
Target: Rs 740-750
The company has no debt and is in the business of research, production, processing marketing of hybrid seeds. With the normal monsoon, the demand for hybrid seeds will increase and the company will benefit.
National Fertilizers – Buy
Target: 79 rupees
This state-owned company has a reach in the bio fertilizer and urea segment. If the rains are good this year, the company can benefit well from June to September.
Expert: Vinod Nair, Head Research, Geojit Financial Services
Hindustan Unilever – Buy
Target: Rs 2,580
A good monsoon is good for FMCG companies like HUL as their demand increases. Due to good rain, the crop is good and the farmer has money to spend. FMCG companies benefit from this. A large part of HUL’s income comes from villages.
Hero MotoCorp – Buy
Target: Rs 3,345
Demand of auto companies like Hero Moto increases as monsoon is normal for the third consecutive year. Companies like Hero Moto have a higher market share in the rural market. Hero MotoTo is attractive at the current level in terms of investment.
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