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The positive commentary by two leading weather forecasters has helped rural themed stocks gain significantly over the past few trading sessions. The companies that will be among the early beneficiaries of a normal monsoon are those that offer agricultural inputs such as seeds, pesticides and farm equipment.
The rise in disposable income will, then, help push up the demand for discretionary items, benefiting a host of sectors from auto makers, consumer goods to financial services and consumer durables.
Business captains, however, say most of the gains for companies would come in the second half of the financial year. Rajesh Jejurikar of Mahindra & Mahindra says given the sentiment and latent effect, real improvement can be expected after October. Harsh Mariwala, chairman of Marico, too, believes the second half will be better than the first for consumer goods firms.
Other than good monsoon, what would push up farm income would be higher crop yields and minimum support prices. Industry players add that the slew of measures taken in the Union Budget to boost the rural economy - infrastructure, rural welfare, social schemes - will play a vital role in improving rural income. Given the positive outlook, companies tapping rural consumers could see a substantial improvement in volumes and revenues with the early signs likely to be visible in the June quarter.
A look at some key companies with high rural exposure:
