Investing in Bharat: 3 stocks which benefit from government focus on increasing rural incomes

The government has been focussing on specific industries which don't come under the traditional definition of agriculture but still are very important for increasing the income of marginalised sections in coastal and rural areas. Right from an animal feed maker to an exporter of poultry products, a number of companies which are part of the rural economy are likely to be beneficiary as policy makers focus on increasing rural incomes.

When it comes to the rural economy, most believe that it is auto and FMCG companies which give a good idea how the rural economy is working, But there is another set of companies which might have a better insight on how the rural and even semi urban part of the economy are doing because they work in this part of the country and also because of the fact of lending in those businesses which operate in the area. Despite all the headwinds, these small finance banks have been able to grow.

There are sectors which under perform for years and then they come back to focus. Thanks to the fact that the textile industry was completely dominated by China and other countries, the Indian textile industry has been in bad shape for decades. However, post covid, partially due to China Plus one narrative. Secondly due to the fact that the government has been focusing on manufacturing, textile stocks have come into focus. This list is drawn from Stock Reports Plus, powered by Refinitiv, with over 4,000 listed stocks along with detailed company analysis focusing on five key components - earnings, fundamentals, relative valuation, risk and price momentum.

While a large part of India’s rural economy is about agriculture, in the last couple of years, there has been an effort on the policy level that other parts of the rural economy which are not agricultural related get the boost. So be it horticulture, animal husbandry and fishing all of them have been a push in one form or other to increase both productivity and income levels. From an investment perspective, there are few players which are listed as a large part of this is still with smaller players who operate on a regional basis. But as the overall market size grows the large players are increasing their presence. This is not to say that there are only opportunities and no challenges. The biggest being the fact that any change in the rural economy matrix is always time consuming, so companies need to have the ability to go through long cycles.