Market experts believe that after the budget, there may be a good spurt in rural themed stocks.
Invest In Rural Theme Stocks
Before the budget, once again there is a stir in rural themed stocks. Experts also say that the government has been focusing on the rural sector for a long time. However, apart from demonetisation, GST and NBFC Crisis, the rural demand has been weak due to slowdown. Due to the slowdown in the world economy, exports have also been weak, due to which the growth of the agri sector has been weak. But at present, there are many such factors, which apart from rural income growth, rural demand is expected to increase. At the same time, the government can also increase allocation on the rural sector in the budget. In such a situation, before the budget, experts are advising to invest in stocks related to the rural theme.
Due to these, the outlook of rural sector is strong
According to brokerage house Prabhudas Liladhar, there are some big factors behind the strengthening outlook of the rural sector.
- This time the water reservoir is strong due to better monsoon, which is better for rabi crops. The yield is expected to be better this time.
- Growth in rural income is expected due to increase in food inflation and higher crop prices.
- In the past, farmers will also benefit from the increase in milk prices.
- Under the PM Kisan Yojana, 6000 rupees are being added to the farmers’ accounts annually. This is also a big factor to support rural income.
- Further, under the PM Kisan Man Dhan Yojana, farmers will get a pension of Rs 3000.
- The way the investment is planned on infra, the rural sector will benefit from it.
- In the budget, the government can increase allocation on the rural sector.
What is the expert saying
According to Santosh Meena, Senior Analyst, Trading Bells, this is the right time to invest in rural themed stocks. The way the government has increased its focus on the rural and infra sectors in the recent past, more allocation can be seen in both these sectors in the budget. In such a situation, one should invest in quality rural stocks before the budget, which can be seen after the budget. The way the government is reforming, it will also benefit the rural sector.
According to brokerage house Prabhudas Leeladhar, the rural growth in the second quarter of the current financial year was only 2.1 percent, compared to 5 percent in the fourth quarter of FY 2019. But in the fourth quarter of the financial year 2020, it is expected to increase to 4.5 percent. At the same time, the rural income growth is expected to be 15 percent in the fourth quarter. The brokerage says that a few selected rural stocks can outperform after the budget.
Which stocks to invest in
ITC, Britannio Industries, Hero MotoCorp, Maruti Suzuki, Mahindra & Mahindra, HDFC Bank, Shriram Transport Finance
(Note: Here the current market price is taken at Friday’s closing price.)
(Disclaimer: We have not advised investment here. This information is based on the report of experts and brokerage houses. Investment in the stock market is subject to risk, so consult the experts before investing.)