What goes up, when the rain comes down

After being faced with two consecutive droughts in the past two years, the rain gods will have a big hand deciding the fate of the Indian economy. We’re here to decipher, the effects of a good monsoon on different sectors and stocks.

A favourable monsoon should start reflecting on the rural consumption demand sometime after the harvest of the summer sown Kharif crops, i.e., in the October-December quarter. Also, higher spending by the government on the MNREGA should keep the wages of the labourers high. It seems likely that we shall have a higher demand of goods and services from 55 percent strong rural population of India.

What Sectors to watch out for?

Rural spend should go to sectors such as auto, consumer durables and to the ailing manufacturing sector as well. So what are we looking to buy in view of this expected demand? Two/four wheeler car makers, manufacturers of home appliances, air conditioners as well as jewellery.

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Nitin has 9+ yrs of experience in Market Research & Quantitative Stock Analysis, but most profoundly an exposure to Retail Psychology. He is an MBA from SP Jain & attended the NYU Stern School of Business, New York.

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