Key Points
The report highlights how the poor monsoon and weak farm output caused by El Nino in FY 2015-16 led to a slowdown in rural wages and consumption..
Consumption stocks in the FMCG segment, two wheelers (2Ws) and cement sectors are likely to benefit from El Nino acting as margin tailwinds while agri-oriented businesses could bear the brunt, a Nuvama report said..
It said rural wages and consumption slowed across categories (FMCG, 2Ws, cement) with agri-oriented businesses (tractors, rural financiers) bearing the brunt...
However, falling input prices boosted margins of FMCG and 2Ws, driving their outperformance, while agri-oriented businesses underperformed, the report said.. "El Nino will have a likely direct impact on those exposed to rural demand FMCG, 2Ws, cement, tractors, agro-chemicals and rural financiers..
Against a Nifty weight of 37.8, the model portfolio weight of BFSI stocks is at 33.8, said a Nuvama report, witnessing a 400 bps climbdown..
