Earnings upgrades are rare in India’s Covid-19 ravaged economy, reports Mint. But thanks to better monsoon rains and healthy farm sentiments, agrochemical companies are seeing upward revision in earnings estimates.
“While most industries are staring at a grim future due to Covid-19 induced uncertainty, we believe the domestic agriculture-inputs industry has entered a conducive growth phase after languishing in the tepid growth zone for the past three years,” says analysts at Edelweiss Securities Ltd.
As of 3 July, kharif crop sowing is 88% higher than the previous year’s levels. Timely onset of monsoon and better water availability are driving crop acreages.
Fertilizer sales grew 22.7% in the first quarter (Q1 FY21) of the current fiscal, data compiled by Prabhudas Lilladher Pvt. Ltd showed. Domestic seed companies are projecting double digit (15-20%) growth in sales, reflecting benefits of higher crop acreages, points out analysts at Edelweiss.