Moneycontrol Pro Panorama | After harsh monsoon, hopes turn to festive season

Businesses hope that the festival season can bring in the cheer.

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Every year scores of Indians await the monsoon rains. The rains provide respite from sweltering heat to all, rejuvenate ground water levels and help kickstart Kharif, the biggest crop season in India. So, a higher than normal rainfall should have brought relief for citizens and policymakers.

On the contrary, many citizens and businesses would like to see an end to the monsoon rains this year. Excess rains have inundated several parts of the country damaging crops, disrupting supply chains and business activities. And now, a delayed monsoon withdrawal is posing risk to the harvest season.

Apart from damage to personal properties and livelihoods, the harsh rains have driven up vegetable prices and hurt sales of certain businesses.

Heavy rains are feared to have impacted sales of exterior paints, beverages and out of home consumption products. Channel checks by analysts indicate subdued retail sales in the automobile sector in September. Weak sales of residential properties are also partly attributed to heavy rains.

In agriculture, farmers skipped a couple of agrochemical sprays due to continuous rains. This can lead to higher returns of unsold goods in the agrochemical sector. “Though crop prices remain firm, and acreages sown expanded, we forecast a moderation in growth for domestic agrochem,” warn analysts at Nuvama Institutional Equities.

With Ganesh Chaturthi and Onam failing to lift sales in automobile and real estate sectors, hopes are now pinned on Dusshera and Diwali. Read Vatsala Kamat’s piece to know the answer to the question: Will it be a festive season sans cheer for automakers?

Excess rains have helped improve water levels at key reservoirs and good soil moisture augurs well for Rabi or the winter crop season. Analysts expect an improvement in sales of tractors and two-wheelers.

Still, as India faced unusually harsh monsoon rains, the seasonal slowdown faced by businesses and the hit to individual incomes seem more acute this year.

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