Five stocks that could benefit from a sub-par monsoon
According to IMD, the country has received a mere 92.4 mm of rainfall in June, which is 43% less than the average seen between 1951 and 2000.
But while some are worried stiff, there are others who are looking at the bright side of a bad monsoon. There are several companies that are likely to register higher sales if monsoon deviates from its regular path.
According to India Meteorological Department, the country has received a mere 92.4 millimeters of rainfall during the last month, which is 43% less than the average seen between 1951 and 2000. If rainfall - or the lack of it - continues to be a worry, then sales of companies involved in making inverters, cooling solutions and ice creams are likely to soar.
Here are a few such companies that could benefit from a sub-par monsoon:
A market leader in the air-conditioner space in India, the company will benefit from higher sales of air-conditioners as the soaring temperatures are likely to extend beyond their usual months. The Tata Group company holds a 19.8% market share in the air-conditioner segment.
The cooling business division contributed about 39% to its total sales in FY14.
Headquartered in Mumbai, the company is planning to increase its market share in the air-conditioner segment by up to 9% in FY15. The heat wave across the country will help it push its cooling solutions.
The cooling product division of the company contributed about 41% to its total sales in the fourth quarter of FY14, with revenues from air-conditioners being accounted for this segment.
This air-cooler manufacturer's fortunes are largely shaped by the weather.
Historically, the company has recorded higher sales during the scorching summer months. It is a market leader in the air- cooler space and enjoys a market share of nearly 40% in an organised market worth Rs 3,000 crore.
A battery manufacturer for automobiles and inverters, it is likely to post higher battery sales meant for the home inverter segment. Analysts believe that home inverter battery contributes nearly 20% to its sales, and in case of a higher power deficit due to rainfall shortage, the battery volumes are likely to see an uptick.
According to the FY13 annual report, the company derived 96% of its income from the ice cream/frozen dessert segment.
India’s total market size for the ice cream segment is estimated at around Rs 3,000 crore, of which the organised market sales is estimated at nearly Rs 2,000 crore.
Ice cream sales are expected to pick up due to the heat which, in turn, will improve the profitability of the company.