As the southwest monsoon has hit Kerala, a few farm-related stocks are back to focus. Good monsoons tend to increase rural demand, and analysts say that if the monsoon goes well this year, one may see a lift in farm income and thus the demand especially when the food prices are rising.
“Normal to good monsoon is positive for domestic farm input sector including farm mechanisation as well as rural consumption in consumer durables as well as FMCG space also it will boost agri-sector income in the near future. This will also have an engulfing impact on other industries such as steel, cement, tractor and two-wheeler,” said Siddharth Sedani – Vice President, Equity Advisory, Anand Rathi Shares and Stock Brokers.
A few industries that are favourably impacted by the monsoon season are Two-wheelers, tractors, consumer durables, FMCG and fertilisers. Analysts have given targets for these stocks that might flourish during the monsoon in India:
Tata Consumer Products Limited
Siddharth Sedani from Anand Rathi shares and stockbrokers has given a target of ₹904 on the shares of Tata Consumer Products Limited. This translates to an upside of 20.85%
Tata Consumer has a high presence in the high growth categories supported by a consumption shift to packaged food. In addition, tailwinds of at-home consumption should continue to aid growth. Higher volume traction in India business, digitization across the supply chain coupled with synergy benefits in upcoming periods are the key growth drivers.
Bayer CropScience Limited
The company enjoys a unique position in the market because of its capability to offer innovative products, technologies, processes, services and business models. Siddharth Sedani has suggested a target of ₹ 6,039 on the shares of the company. These shares are currently trading at ₹ 5399.95 levels, indicating an upside of 11.83%
Coromandel International Limited
Analysts at Anand Rathi Shares and Stock Brokers continue to remain positive on the company on the back of its strong business model, good monsoon, high operating cash flows, strong balance sheet, new product launches, fast-growing organic nutrients business and agriculture reforms. They have given a target price of ₹ 1012 on the share price of the company which translates to an upside of 6.32 as compared to its current price of ₹ 952.65.
Escorts Limited
The company provides agricultural machinery such as tractors, railways and other construction equipment. The demand for tractors and other Agri machinery tends to increase as farmers expect a healthy crop season on account of timely monsoon.
Chola Wealth Direct has a buy call on the shares of Escorts Limited with a target price of ₹1970.00 apiece. This translates to an upside of 21.26% when compared to its current share price of ₹ 1624.55.
Kaveri Seed Company Limited
Kaveri Seed Company Limited is India’s largest Agri company specializing in hybrid seeds. A good crop season would lead to good demand for seeds which could benefit the company.
On 24th May 2022, ICICI Securities gave a buy call on the shares of the company, with a target price of ₹ 665.00. The shares are currently trading at ₹587.00 levels right now, indicating an upside of 13.29%.
National Fertilizers Limited
National Fertilizers Ltd is a government-run fertilizer and urea producer. It has a market share of 16% of the total urea production and this makes it the second-largest Urea producer in the country. It may witness an increase in demand during a healthy crop season as fertilizers will be needed to support high-output crop production.
Disclaimer
The content in this news article is not investment advice. 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.
