Monsoon Bonanza For Agri-Linked Sectors
With the monsoon arriving early and expected to deliver above-average rainfall, FMCG, vehicles, lenders, etc are likely to see 10-15 pc earnings growth this fiscal
Monsoon Bonanza For Agri-Linked Sectors
Mumbai: Sectors such as tractors, agri-inputs, rural NBFCs, and consumer durables could see 10-15 per cent year-on-year earnings growth in the second half this fiscal (H2 FY26) -- supported by rural liquidity and demand recovery -- if the monsoon maintains above average intensity and distribution across key agrarian regions, according to a report.
The expectation of a good monsoon continues, and the impact of stable crop output and softening global prices becomes more evident, and a 25-basis-point reduction in the repo rate to 5.75 per cent is widely anticipated in the June 6 policy decision. A further cut to 5.50 per cent by August is plausible if inflation remains below 4 per cent. These rate cuts could provide a significant boost to rate-sensitive sectors such as housing, automobiles, and NBFCs, said smallcase manager GoalFi in its report.
The broader equity market could also benefit from increased visibility on consumption, lower inflation, and monetary easing.
A normal monsoon has historically lifted rural incomes by 5–7 per cent, triggering a ripple effect across consumption-linked sectors. FMCG majors, two-wheeler sales, rural NBFCs and microfinance lenders could see uptick in demand.
