Increasing rural electrification and positive farm sentiment to boost demand for agricultural pumps: CRISIL
Increasing rural electrification and positive farm sentiment riding on normal monsoon, and improved cash flows after a healthy rabi season last fiscal will boost demand for agricultural pumps in the country this fiscal, leading to 8-10% revenue growth for their manufacturers, said CRISIL Ratings on Thursday.
Higher volume-driven growth and stabilising input prices will lead to operating margins rising up to 100 basis points to 11-12% this fiscal, and improve cash accruals. That, along with steady working capital levels and moderate capex spending needs will ensure debt remains at levels similar to last fiscal, supporting stable credit profiles. An analysis of agricultural pump manufacturers rated by CRISIL, which accounts for 40% of the sector’s revenue, indicates as much. The Rs 5,000 crore sector is dominated by conventional pumps (grid-connected and diesel pumps), which account for 92% share, followed by solar pumps (8%).
Anuj Sethi, Senior Director, CRISIL Ratings said “This fiscal, the sector’s growth of 8-10% will be largely volume-driven because of positive farm sentiment, better farm cash flows, increasing rural electrification, and stable pump prices. Last fiscal, despite volumes declining on year by 6%, the sector’s revenue grew 17% largely due to a steep rise in realisation, in keeping with higher input prices (mainly pig iron and mild steel),” Thanks to better demand, conventional pumps are expected to grow 7-8% this fiscal despite facing some headwinds, while solar pumps will see 15% growth, propelled by government incentives.”
Prices of rice may continue to go up, says govt
Local prices of rice may continue to go up, the govt said on Thursday, attributing the projected rise to low kharif production forecast and 11 per cent surge in export of non-basmati variants.
As on September 19, retail price of rice showed an increase of 0.24 per cent over the week, 2.46 per cent over the month and 8.67 per cent over the year, the govt said. On an average of five years, there is an increase of 15.14 per cent, it said.
The ministry had earlier informed that domestic rice production is estimated to declined by 6 per cent to 104.99 million tonnes in the 2002-23 kharif season.
Kharif sowing nears to end; paddy acreage down by 5.51 pc
As sowing of kharif (summer) crops almost comes to an end, paddy planting continued to lag behind as sown area under this crop fell 5.51 per cent from last year to 401.56 lakh hectare so far, according to the agriculture ministry.
Besides paddy, there is marginal lag in sowing of pulses, oilseeds and jute/mesta. Consequently, the total sown area under kharif crops declined 1.24 per cent to 1,097.57 lakh hectares so far this kharif season, as against 1,111.36 lakh hectares in the year-ago period, it said.
Sowing of kharif crops had begun with the onset of southwest monsoon from June. Harvesting of some kharif crops has started and will be in full swing from October.
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