Confident industry will grow at 15% on back of rains .... India

Confident industry will grow at 15% on back of rains ....
INDIA








• Outlook on the industry's growth: When we gave the first guidance and that time we
were talking about 10 percent, we didn’t know what exactly was going to happen with
the rains. As we have seen the monsoon set in and do well with a good spread across the country, we have confidence that the industry should grow at 15 percent right now. Also expects M&M to do better than the industry.




• I am sure you have a good ability to forecast. So we will let you stay with your
projections. A lot will depend on what kind of cash flows come in post the harvesting
and how much farmer prosperity moves along those lines. I am intentionally using the
word farmer prosperity and not farmer income because farmer prosperity is a
combination of what kind of price they get out of the produce that they make. It is not
just how much they produce but what price they get for it. If the price is good, that is
when they make money.



• How are the prices right now?: Minimum support prices (MSPs) have gone about 5-7
percent this year. So that is what it is now. We have to see what happens when the
harvest come in.



• Lag time between the harvest coming in and farmer incomes growing: Two-three
months after the harvest starts. So basically, November-December is when you will see
how good the cash flow is.



• This year, yes, we expect it. One is base effect, the second is the carryover out of what looks like a good season. So this year season looks good. The rains have been well spread and there is no reason to believe that sales won't be good this year and that is the reason we have upped our forecast for the industry to 15 percent.






Happy Investing
Source:Moneycontrol.com