With 52 percent of the net cultivated area in India dependent on the monsoon, it is essential to the country’s agricultural environment, in addition to electricity generation, refilling reservoirs, etc. throughout India.
June and July are considered the most important monsoon months for agriculture since that is when most of the kharif crop is sown.
A regular monsoon is expected to boost a number of companies and industries, particularly the agricultural sector, which is vital to India’s economy.
The listed firms provide investment opportunities and will be closely monitored by the investors due to the expected favourable influence on rural demand, agricultural growth, and general economic activity during the monsoon season.
Here are a few Indian-listed companies that are expected to benefit from the monsoon because of the rising demand and agricultural growth:
Hindustan Unilever Limited
A good monsoon is beneficial for FMCG firms such as HUL since it increases agricultural productivity and huge disposable income, potentially driving robust demand. HUL is the market leader in the consumer goods sector and derives 40-45 percent of its revenue from rural India.
Since HUL receives the majority of its revenue from rural India, thus a good monsoon would boost its rural income and support growth. Increased farm productivity leads to lower input costs, which improves profit margins.
Rohit Jawa, CEO and Managing Director, is optimistic about an improvement in consumer demand due to a normal monsoon and better macroeconomic indicators.
With a market capitalisation of Rs. 5.52 lakh crore, the share price of this FMCG stock jumped by nearly 1.2 percent to hit an intraday high at Rs. 2,377.9 in the morning trading session Friday, compared to its previous closing price of Rs. 2,349.55.
HUL reported a 0.6 percent YoY growth in revenue from operations from Rs. 14,953 crore in Q4 FY22-23 to Rs. 15,041 crore in Q4 FY23-24. However, during the same period, net profit decreased by 1.5 percent from Rs. 2,601 crore to Rs. 2,561 crore.
Hindustan Unilever Limited is India’s largest Fast Moving Consumer Goods (FMCG) company and one of the country’s largest Foods and Refreshment businesses with brands including Brooke Bond, Lipton, Horlicks, Boost, Bru, Kissan, Knorr, and Magnum.
HUL, founded in 1888, is a subsidiary of Unilever Plc, a British consumer goods that is one of the world’s leading suppliers of Food, Home Care, Personal Care, and Refreshment products.
Mahindra & Mahindra (M&M) Limited
With a market share of more than 41% in FY23, M&M is the largest tractor manufacturer in India and leads the tractor category on a standalone level. A good monsoon will increase sales of the company’s agricultural machinery, tractors and other farm equipment.
Tractor volumes are likely to benefit, as normal monsoon leads to surplus reservoirs, resulting in increased farm production and rising demand from rural regions.
Mahindra & Mahindra has a large rural market share, so a regular monsoon and increased government spending can be a good news for the company. The company believes that the macroeconomic factors will support the industry’s growth.
The business anticipates multiple positive factors for the industry over the upcoming quarters, including stable commodity prices, normal monsoons, and rising government expenditure.
With a market capitalisation of Rs. 3.17 lakh crore, the share price of this large-cap stock jumped by nearly 2.8 percent to hit an intraday high at Rs. 2,566.4 in the morning trading session Friday, compared to its previous closing price of Rs. 2,494.7.
M&M reported a 9.3 percent YoY growth in revenue from operations from Rs. 32,365 crore in Q4 FY22-23 to Rs. 35,373 crore in Q4 FY23-24. During the same period, net profit increased by 4.2 percent from Rs. 2,998.37 crore to Rs. 3,124.94 crore.
Kaveri Seed Company Limited
One of the leading seed manufacturers in India, Kaveri Seeds Company Ltd (KSCL) has experience in seed production of major agricultural crops backed by a very strong in-house R&D program for a variety of crops including maize, cotton, sunflower, bajra, rice and several vegetable crops.
KSCL is a debt-free company engaged in research, production and marketing of hybrid seeds; a good monsoon would boost demand for seeds, and growth in cotton cultivation will also increase supported by a better monsoon.
With a market capitalisation of Rs. 4,356 crore, the share price of the stock jumped by nearly 1.3 percent to hit an intraday high at Rs. 860.05 in the morning trading session Friday, compared to its previous closing price of Rs. 848.85.
Kaveri Seed Company reported a 0.95 percent YoY fall in revenue from operations from Rs. 144 crore in Q3 FY22-23 to Rs. 142.63 crore in Q3 FY23-24. During the same period, net profit decreased by 71 percent from Rs. 38.15 crore to Rs. 11.07 crore.
Coromandel International Limited
Coromandel International Limited is India’s second-largest manufacturer and marketer of Phosphatic fertiliser and amongst India’s leading Agri solutions providers, offering a wide range of products and services across the farming value chain.
The company operates in two major segments: Nutrient and other allied businesses and Crop Protection, including fertiliser, crop protection, bioproducts, specialty nutrients and organic businesses.
The company has a strong presence in the South Indian states of Andhra Pradesh (AP) and Telangana, and the normal rainfall will contribute to higher volumes in the fertiliser and crop protection segments, which would raise demand in rural areas.
With a market capitalisation of Rs. 38,267.3 crore, the share price of the stock jumped by 0.63 percent to hit an intraday high at Rs. 1,311 in the morning trading session Friday, compared to its previous closing price of Rs. 1,302.7.
Coromandel International reported a 28.5 percent YoY fall in revenue from operations from Rs. 5,475.82 crore in Q4 FY22-23 to Rs. 3,912.72 crore in Q4 FY23-24. During the same period, net profit increased by 33.5 percent from Rs. 246.44 crore to Rs. 163.91 crore.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
