Mahindra, Eicher Motors, Escorts shares beat index since IMDs monsoon forecast
Since IMD made its prediction mid April the shares of tractor manufacturers has see an growth which is higher than the stock market indices.
Key highlights:
- IMD forecast predicted normal rainfall for the country during the June-September
- Shares of Mahindra, Eicher Motors and Escorts rise
- Tractor shares gain more than the index since IMD forecast
Shares of Mahindra & Mahindra (M&M), Eicher Motors and Escorts have gained more than the index since the IMD made the first monsoon prediction two months ago.
Looking at the indices, from April 18, or since the first announcement of monsoon prediction by IMD, Sensex and Nifty has touched all-time highs on many days.
The Indian Meteorological Department (IMD) and private forecaster Skymet have predicted a normal and well-distributed monsoon, that is, rainfall is expected at 96% ± 5% of the Long Period Average.
Monsoon seen normal this year, IMD says; bonds cut losses
Nifty, which was trading at 9105.15 points on April 18, today closed at 9647.25 points. In less than two months, the benchmark gave returns of 6%. While, Sensex, which was trading at 29319.1 points on April 18, today closed at 31213.36 points.
Mahindra & Mahindra (M&M) gave double the returns than that of Sensex. On April 18 shares of the company were trading at Rs 1262.75 per piece. Today, it closed at Rs 1417.85 per piece, giving returns of 12.2%.
M&M, which is one of the largest tractor manufacturers in India, has see a growth in sales of 70% since the previous monsoon season as rainfall had been above average.
"With road transport being a major means of transporting agricultural produce from the farms to the market, commercial vehicle operators are expected to benefit from a normal monsoon. A normal monsoon would result in better freight availability, improve utilisation of the existing fleet, and support freight rates," said Dipanshu Rustagi, a Moody's Assistant Vice President - Analyst.
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