Monsoon Stocks: In the midst of the COVID 19 crisis, there is a good news for the economy, even this year, the monsoon is expected to be normal. The India Meteorological Department says that the South West monsoon will knock Kerala in its due time only on June 1. Due to better monsoon, it can increase the income of rural India. If rain is good, farming is good. Due to which companies related to agriculture get demand. At the same time, the rural income increases due to good yield, which increases the demand. Firms like FMCG and Auto benefit from this. In such a situation, some stocks can be monitored from now on, in which experts or brokerage houses are positive.
What is IMD’s estimate
According to the Meteorological Department, the monsoon may remain between 96 and 104 percent in the long term period average. According to IMD, the situation of El Nino remains neutral, it is less likely to proceed. This year, monsoon can be 98 per cent with an error of 5 per cent of the long period average (LPA). At the same time, according to weather information agency Skymet, 103 percent of the LPA may get rain this year.
Better monsoon: Which sectors benefit
Ajay Kedia, Advisor of Kedia Commodity, says that if monsoon remains normal, the demand for seeds, fertilizers, agricultural implements, pumps etc. increases due to increase in farming activities. If the rural income increases, then the affordability increases. This increases demand for FMCG, two wheeler and consumer goods. According to brokerage house Motilal Oswal, good monsoon will benefit two-wheelers, auto, rural financing, agrochemicals and select FMCG companies.
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Monsoon’s contribution to the economy
In India, more than 60 percent of the cultivable land is such, where there is no proper irrigation. In such a situation, farmers in those areas depend on rain for farming. In this season crops like rice, maize, pulses, cotton and sugarcane are dependent on monsoon. With the increase in yield due to better monsoon, prices of food and drink will remain under control. Explain that due to the second wave of Corona virus, pressure has increased on the country’s economy.
Keep an eye on which shares
Coromandel International
Brokerage house Motilal Oswal has fixed the target at Rs 1030, recommending investment in Coromandel International. In terms of current price of Rs 730, the stock can get around 41 per cent return. Coromandel is in the international fertilizer business. The company also produces pesticides and specialty nutrients. The company is also in rural retail business. Good rains will increase the demand for fertilizer in agriculture, which will benefit the company.
Dober india
Brokerage house Sharekhan has recommended a target of Rs 675 while recommending investment in Dobber India. In terms of current price of Rs 537, it can get 26 percent return. Dabur makes many products that have good demand in rural areas. The second wave of COVID has increased the demand for health, immunity and hygiene products, especially Chyawanpras, from which Dobar is expected to benefit significantly.
Hero Motocorp
The brokerage house Citi has set a target of Rs 4000, giving the best advice. In terms of current price of Rs 2844, the stock can get 40 percent return. The company’s fourth quarter results have been estimated. Demand for two wheelers increases in rural areas due to normal monsoon. In such a situation, Hero MotoCorp will get the benefit of its good market share.
(Note: We have given the details of the shares here based on the report of the brokerage house. Seeing the risk of the market, take the opinion of the experts before investing.)
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