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News: On the back of muted rainfall activity in the month of August at -36% of LPA (driest month in over a century) and cumulative rainfall in June-Aug period at -10% of LPA with September likely to witness normal rains, the cumulative rainfall in the current monsoon season 2023 is expected to be below normal in nature (90-95% of LPA).
Views: Tractor industry has already surprised us on the positive side with tractor sales volume building strength despite high base. We don’t expect lower rainfall to have meaningful adverse effect on tractor sales with industry forecast for lower single digit growth in FY24E. Moreover domestically in the last your years we have had normal to positive monsoons (a very rare phenomenon), so a tad below normal monsoon in 2023 will not meaningfully change Agri income landscape.
Impact: Neutral