Do it yourself

A lot of the recent macro research effort of stock market participants has been devoted to the state of rural demand in the country. In their latest commentary, most consumer goods companies have reported continued pressure on rural demand. Even though many market economists and analysts have forecasted imminent recovery in rural demand, the corporate commentary did not sound that much sanguine. Nonetheless, higher food prices and expected good monsoon are expected to help the rural economy to some extent. A good performance of the rural sector is important for investors. Almost two third of the Indian consumers derive their livelihood directly from the rural economy, including farming, horticulture, animal husbandry, cottage industry, forestry, etc. The rural economy directly supports a large number of industrial enterprises, like crop protection, farm equipment, transportation, food processing, etc.; besides providing material indirect support to industries like textile, consumer s...

In past couple of months a number of research reports have expressed concerns over the rural demand in the wake intense second wave of pandemic and subsequent lockdown of economic activities. Some consumer facing corporates have also expressed similar sentiment in their interaction with analysts and investors. The popular views seems to be that unlike last summer, when the rural demand remained resilient despite a wider and stringent lockdown, this year the demand may not show similar resilience. Wider and deeper spread of infection this time is one of the primary reasons behind these concerns. Rising stress in household and unorganized sector is also expected the discretionary spending in check. In this context, there are few points that need to be noted by investors before forming a negative view on consumption theme. Record production in crop year 2020-2021 Firstly, as per the third advance estimates for the 2020-2021 crop year, the agriculture ministry has expected record foo...