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Farm related firms to witness rise in their earnings due to good rains: Study
Thanks to bountiful rains this year, a large part of corporate India with direct connect with the agro and the entire rural economy is set to post handsome growth in the coming two quarters in sales and profitability ranging between 15 and 45% with benefits of Monsoon accruing to several mid and large cap firms Mahindra and Mahindra, Rallis India and Jain Irrigation, according to a study by industry body Assocham.

The study titled 'Monsoon Showers Fortune on Farm Related Firms' noted, "The firms benefiting directly from abundant rainfall relate to those in the irrigation infrastructure, farm equipment like tractors, seed development and the food processing."

It said a host of other firms engaged in fertilizers, seeds, farm equipment, food processing and consumer consumption would immensely benefit from a sizeable improvement in the demand for farm inputs as also higher farmers' income leading to a significant rise in rural demand.

The paper projected that with a good monsoon, sale of tractors for Mahindra and Mahindra is expected to rise. The sale during the Sep-Mar 2017 window is expected by at least over 15 per cent, also resulting in commensurate uptick in bottom line.

Other leading tractor and farm equipment firms including Escorts and VST Tillers Tractors are also expected to do well both in income and net earnings, according to the paper.

"With Monsoon being the lifeline of the Indian economy, it is no surprise that good rains would bring good fortune not only to the companies engaged in the farm related sectors but also the entire macro picture," Assocham President Sunil Kanoria said in a release.

Likewise, for Rallis India is a subsidiary of the Tata Group which is a key player in the agriculture business, bountiful rains are expected to generate 33.58% higher sales during the monsoon months. 

Similarly, Coromandel International Ltd, a mid cap company operating in fertilizers sector is likely to see a trend of  surge in sale during the months Sep-March, post the active period of monsoon and sowing of seeds. The company is expected to see a rise in sales by 5.13% for the period March -September 16, and a 19.82% for the period September 16-March 17. 

Likewise, the leading sugar firms like Balram Chini and Mawana Sugar are projected to improve their performance significantly in the coming months, thanks to rain Gods and firming of prices.  

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