Hero MotoCorp, M&M, Canara Bank, Godrej Agrovet, among stocks to buy amid strong monsoon

The Indian stock market is showing optimism due to the early arrival of the south-west monsoon, which reached the country in May, weeks ahead of its usual June onset especially for agriculture and broader rural economy.

Following the early arrival, the (India Meteorological Department) IMD says the June-September monsoon is expected to be better than usual across much of the country, offering a promising outlook for agriculture and water resources.

The department forecasts overall rainfall at 106% ±4% of the long-period average (LPA), signaling a robust monsoon season that could support timely sowing of kharif crops and ease pressure on water reservoirs.

Sectors in focus:

Analysts suggest that sectors linked to the rural economy, such as agriculture, tractors, two-wheelers, and FMCG may see positive momentum during this monsoon season which will drive demand in these sectors, making them key beneficiaries of strong monsoon seasons.

Gaurang Shah, Senior Vice President at Geojit Financial Services, has a positive outlook on various sectors for the long term. He says that they are closely monitoring large-, mid, and small-cap cement stocks for the upside trend for the monsoon.

"In the tractor segment, Mahindra & Mahindra and Escorts are expected to perform well. For the fertiliser sector, he recommends keeping an eye on Coromandel International," Shah said.

Meanwhile, the brokerage firm Way2Wealth has released its monsoon stock picks, expecting them to benefit from improved rural liquidity and demand. The firm highlights that these are fundamentally strong companies that have shown a positive correlation with monsoon trends and broader macroeconomic indicators.

India is set to see higher output in key rabi crops like wheat, pulses, rice, and coarse cereals in 2024-25, while oilseeds may see a slight decline, says the second advance estimates by the Ministry of Agriculture. With this strong crop performance and a low base, ICRA projects a 5.5% year-on-year growth in agricultural GVA for Q4 FY2025, up from 0.9% in Q4 FY2024.

According to the ICRA report, the early and above-normal monsoon is expected to have a wide-ranging impact across sectors. Rabi crop output is expected to increase, with wheat procurement at highest levels since FY2022. Sugar output is anticipated to rise due to adequate rainfall. Cement demand is likely to rise due to increased rural housing activity, while tractor and two-wheeler sales are projected to grow by 4-7% and 6-9%, respectively.

Analysts have recommended a slew of stocks to buy, which they expect to benefit from the good monsoon season.

Here are the stocks to buy:

Gaurang Shah stock picks:

He suggests to buy and hold these stocks for a longer period to witness their growth.

Mahindra & Mahindra - Buy

Escorts - Buy

Coromandel International - Buy

Way2Wealth stock picks:

The brokerage firm suggests these stocks to buy for a time horizon of 6-8 months.

Canara Bank | Buy | Target Price: Rs. 125

Coromandel International | Buy | Target Price: Rs. 2,700

Emami | Buy | Target Price: Rs. 660

Godrej Agrovet | Buy | Target Price: Rs. 840

Hero MotoCorp | Buy | Target Price: Rs. 5,000

Supreme Industries | Buy | Target Price: Rs. 4,750

Swaraj Engines | Buy | Target Price: Rs. 4,600

Bayer CropScience | Buy | Target Price: Rs. 6,450

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.