After two years of severe drought, the country is witnessing a good monsoon, based on rainfall data so far. ~80% of India has received normal to above normal rainfall this year. The overall monsoon rainfall till 27th July’16 has been 0.4% above the long term average versus a deficiency of 13% and 15% in 2014 and 2015 respectively.
The area under cultivation has now risen to ~80mn ha -the highest it has been in past 9 years, growing 6% yoy. In the current global environment of uncertainty, stocks of companies deriving revenues from the domestic consumer offer the best risk adjusted return.
According to Deutsche Bank, preferred consumer/rural interfacing beneficiaries include: M&M, Hero Motocorp, Titan, Godrej consumer, GSK consumer, ITC, Zee, Bajaj Finserv, Shriram Trans Fin, HDFC Bank, HDFC, LIC HF, HPCL, Shree Cement, Bharti, Coromandel.
