India is expected to witness an ‘above-normal’ monsoon in 2025, which could provide significant relief to the economy and policymakers. A healthy and well-distributed monsoon can help ease inflationary pressures and boost rural consumption.
The India Meteorological Department (IMD) declared the arrival of monsoon in India on May 24, eight days ahead of its normal date schedule of June 1. According to the IMD, the southwest monsoon hit Kerala on Saturday, May 24. Monsoon hit Mumbai on May 26, 16 days earlier than usual. According to IMD, it was the earliest onset on monsoon in Mumbai since 1950.
Monsoon is crucial for India’s agriculture sector, which supports the livelihood of about 42 per cent of the population and contributes about 18 per cent to India’s economy.
Over 75 per cent of India’s annual rainfall occurs during the southwest monsoon period (June–September). A strong monsoon is critical for agricultural output, water reservoirs, inflation, consumption, and overall economic growth.
A healthy monsoon increases agricultural productivity, stimulates rural demand, and benefits sectors like agrochemicals, fertilisers, tractors, two-wheelers, and FMCG.
Moreover, it boosts consumption and eases price rises, which can create a conducive environment for the Reserve Bank of India to cut interest rates and maintain an accommodative monetary policy stance.
Stocks to buy to reap the benefits of a healthy monsoon
Ajit Mishra, SVP of research at Religare Broking, said a healthy monsoon bodes well for India’s rural economy, boosting consumption, farm incomes, and overall rural demand.
To capitalise on this, Mishra suggests investors can look at sectors like auto, rural-focused financers, and agri-allied consumption.
From the auto space, Mishra picks Hero MotoCorp, while Mahindra & Mahindra Financial Services can be a rural-focused play. ITC is a bet on agri-allied consumption.
Mishra said these companies are well-positioned to benefit from higher rural spending and better credit demand.
Improved farm output can also drive growth in agrochemicals and building materials.
“A diversified approach across these sectors offers a strong opportunity to play the rural revival theme, as a normal monsoon supports both demand recovery and macro stability in India’s rural landscape,” said Mishra.
Kunal Kamble, Senior Technical Research Analyst at Bonanza, recommends three stocks- PI Industries, Insecticides India and Hero MotoCorp to play the monsoon theme.
“Buy PI Industries stock above ₹3,780 for the target of ₹4,050 with a stop loss of ₹3,630.
Buy Insecticides India stock between ₹750-810 for the target prices of ₹1,100 and ₹1,300, with a stop loss of ₹650. One can buy Hero MotoCorp between ₹4,200-4,350 for the target of ₹5,050-5,300, with a stop loss of ₹3,900,” said Kamble.
Prashanth Tapse, Senior VP (Research), Mehta Equities, is positive about ITC and Dabur.
“Monsoon will benefit the FMCG and auto segments, but one must consider the stocks that are at comfortable valuations. ITC and Dabur are our top consumption picks,” said Tapse.
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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
