Agro Chemicals Sector Check - Forecast Of Subpar Rains Likely To Dent Earnings: Prabhudas Lilladher

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Prabhudas Lilladher Report.India Meteorological Department and Skymet, in their recently released monsoon forecast have predicted ‘Normal’ monsoons (96% of long period average) and ‘below normal’ rainfall (94% of LPA) for the forthcoming monsoon season. IMD expects monsoon to be at 96% of LPA; with El-nino patterns likely to develop during second half of the season (mid-August to September). On the other hand, Skymet, expects monsoons to be at 94% of LPA with Northern and Central parts of the country risking deficit rainfall. The gloomy forecast of 96%/94% of LPA is a concern to the beleaguered agri input industry, which is already reeling under high channel inventory and high cost raw material inventory amid a falling raw material cost scenario. We have factored in revenue growth of 9.6% YoY in FY24E for our agrochemical coverage universe versus 8.7% compound annual growth rate clocked over FY14-16 (FY15/FY16 witnessed deficit rainfall). However, we believe that pressure this time would not be as severe as FY15/16 largely as-channel inventory is higher particularly for insecticides grades only, overall inventory remains at comfortable levels; domestic crop prices continue to be remunerative; Government’s thrust on improving farm income;expectations of special aid from govt to the farming community in case of crop damage or losses (due to adverse weather conditions etc.) given Lok Sabha elections next year..Click on the attachment to read the full report:.Agro Chemicals Q4 Results Preview — Challenges To Persist For Domestic Players: Prabhudas Lilladher.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Agro Chemicals Sector Check - Forecast Of Subpar Rains Likely To Dent Earnings: Prabhudas Lilladher

IMD predicts ‘normal’ rainfall with 49% probability of ‘normal’ to ‘above normal’.

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