Stocks That Gain from No Rain!
BANGALORE: The country is said to be experiencing one of the driest monsoons since 1951 of about 92.4 millimeters, which is 43 percent less than normally received. India derives a huge amount of GDP from the agro based industries or agriculture that highly depends on a strong monsoon, but it is unlikely that there will be much contribution from these industries to the economy of the country this year. The monsoon has been delayed, as well as scarce this season.
The loss looms over farmers who are dependant on the rains and because of which the prices of agro based products have already been hiked. As the budget is also in session in a week’s time, investors will stay away from agro based industries as the stocks will decrease. This again is not all loss to other industries that gain from no rain.
It is surprising that companies actually profit with huge margin when there is scarcity of rain. Products that is very essential for irrigation will have booming profits like Finolex industries that supply pvc pipes; Kaveri seed company that supplies hybrid seeds will be in demand since they are not monsoon prone. Bajaj electrical are also in for growth as their motors are famous among the rural buyers. There will also be a high demand in generators so Kirloskar oil engines will also benefit from scanty rain.
These are some of the companies that will gain from less rainfall even though they are very close to the needs of farmers all round the year.
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