As we all know that the monsoon has entered the state of Maharashtra and heavy rainfall can be experienced in the coming time. And if the monsoon conditions are good in the country, which are the stocks that can be benefited from that?
2 Stocks to Watch:
- If we talk about monsoon, Agriculture is the first thing that is affected by this.
- The company has expertise in the manufacturing of complex fertilizers, which are the fertilizers that minimise the use of urea in production.
- The urea usage makes the land barren after a certain period, hence, the Government is also coming forward to reduce the usage of urea and increase complex fertilizers.
- Hence, the push of the government will surely provide benefits to the stocks which are indulged in complex fertilizers manufacturing.
- The factors that are important to analyse a stock are earning visibility and growth in earnings. And both of these factors are visible in Coromandel International.
- If the monsoon conditions are favourable then the purchasing power of the farmers will automatically rise and this can lead to the purchase of high-quality complex fertilizers.
- The major revenue of the company comes from 2 states, i.e., Telangana and Andhra Pradesh.
- And it has a huge scope to expand because there are various other states like Punjab, Haryana, UP, MP, Maharashtra, etc. which are leaders in agricultural production. The company has a very less market share in these states.
- Hence, the expansion can very effectively increase the market hold of Coromandel International.
ii) Escorts Limited:
- The next company that can be positively impacted is Escorts Limited.
- If the monsoon conditions in the country go in favor of the farmers, then, it will ultimately lead to a rise in demand for tractors as they are very beneficial for agricultural production.
- This company has around 80% to 90% revenue coming purely from the sale of tractors.
- This stock may also perform well if there is a good monsoon in the country.
With the push of the government towards the usage of complex fertilizers and the expectation of favourable monsoon conditions, these two companies should be on the radar of every investor as both earning visibility and growth in earnings are in favourable conditions. Do proper research and study before making any investment decision.