Monsoon Impact on Stock Market in India Explained

Every year, not just farmers who keep a close eye on the weather, investors do too, because favourable monsoon conditions stimulate growth in a few sectors of the economy. The sectors include fertilisers, agrochemicals, FMCG, etc.

In today’s blog post, we will give you an overview of the best monsoon stocks along with the benefits of investing in them.

What are Monsoon Stocks?

Monsoon stocks are the shares of the company’s performance of which are dependent on the Indian monsoon. A good monsoon can help them earn high profits, whereas a poor monsoon can significantly impact their revenue. This generally happens because the monsoon affects income and spending, etc. Therefore, an active investor keeps an eye on monsoon forecasts so that it can identify the stocks which have high growth potential. 

Top Monsoon Stocks in 2026

1. Hindustan Unilever Limited
2. Mahindra and Mahindra Limited
3. Coromandel International Limited
4. UPL Limited
5. PI Industries Limited
6. Escort Kubota Limited
7. Chambal Fertilisers and Chemicals Limited
8. Rallis India Limited
9. Kaveri Seed Company Limited
10. Jain Irrigation System Limited

Company	Current Market Price (INR)	Market Capitalisation (in INR crore)	52-Week High	52-Week Low
Hindustan Unilever Limited	2103	4,93,978	2660	2022
Mahindra and Mahindra Limited	3083	3,83,423	3840	2896
Coromandel International Limited	2056	60,657	2720	1706
UPL Limited	597	50,411	812	563
PI Industries Limited	2619	39,725	4330	2527
Escort Kubota Limited	2919	32,656	4180	2700
Chambal Fertilisers and Chemicals Limited	454	18,208	581	400
Rallis India Limited	238	4441	386	216
Kaveri Seed Company Limited	846	4,345	1242	705
Jain Irrigation Systems Ltd-DVR	30.3	2207	59	27

Overview of Best Monsoon Stocks

The overview of best monsoon stocks is as follows:

1. Hindustan Unilever Limited

It was established in 1933 as Lever Brothers India Limited. In 2007, it was renamed Hindustan Unilever Limited. Being one of the largest FMCG companies in India, it offers products like Surf Excel, Lux, Dove, etc. The company has its headquarters situated in Mumbai.

2. Mahindra and Mahindra Limited

The company was established in 1945 as Mahindra and Mohammed as a steel trading company. It manufactures automobiles such as tractors and other farm equipment. The company came up with an IPO in 1956, and its headquarters are situated in Mumbai.

3. Coromandel International Limited

The company was incorporated in 1961, and initially the company began its journey as Coromandel Fertiliser, which was a joint venture between EID Parry, IMC and Chevron. It was engaged in the manufacturing of fertilisers, crop protection products, organic fertilisers, etc. and is a key player in the Indian agriculture sector. It has its headquarters situated in Chennai.

4. UPL Limited

The company was incorporated in 1985 and was initially known as Vishwanath Commercials Limited. Later, the company changed its name to United Phosphorus Limited and finally adopted the name UPL in 2013. IPO of the company was launched in 1985. Over time, it has become one of the world’s leading agriculture solution providers. The company manufactures crop protection chemicals, etc. and has its headquarters situated in Mumbai.

5. PI Industries Limited

The company was incorporated in 1946 and initially known by the name Mewar Oil and General Mills Limited. The company changed its name to PI Industries Limited in 1992. The company was listed in 1993. It is one of India’s leading agri-science businesses and offers custom synthesis, etc. The company’s headquarters are situated in Gurugram.

6. Escort Kubota Limited

It was founded in 1944 by Har Prasad Nanda and Escorts Agents Pvt. Ltd. It is one of the leading engineering companies in India. It manufactures tractors, construction equipment, etc. The company is known for its innovation in farm mechanisation. Its headquarters are situated in Haryana.

7. Chambal Fertilisers and Chemicals Limited

The company was founded in 1985 and was initially named Aravali Fertilisers Limited. In 1989, it changed the name to Chambal Fertilisers and Chemicals Limited. The company produces urea and other crop protection-related products. It has a strong distribution network across India. The company has its headquarters situated in New Delhi.

8. Rallis India Limited

The company was incorporated in 1948, and in 1960, the Tata group and Fisons became key shareholders in the company. However, in 1990, the company strategically exited its engineering and chemical business and started focusing primarily on the agri sector. Some of the key products of the company include agrochemicals, seeds, and speciality fertilisers, etc. The company was originally incorporated in Kolkata and later shifted it headquarter in Mumbai.

9. Kaveri Seed Company Limited

Founded in 1986, it is one of the biggest seed companies in India. The company has good experience in seed production, processing and marketing of quality seeds of different crops such as cotton, rice, maize etc. Its IPO took place in 2007 and the company went public. It has its headquarters in Hyderabad.

10. Jain Irrigation Systems Ltd-DVR

The company was incorporated in 1986 by Bhavarlal H. Jain. It was started as a petroleum products and agriculture inputs manufacturer. The objective of the founder was to increase the income of farmers. Later in 2000, the company diversified into PVC piping, tissue culture plants, fruit processing, and renewable energy solutions. It has become one of the largest manufacturers of drip irrigation systems, and its headquarters is situated in Maharashtra.

Read Also: Best Sugar Stocks in India

Key Performance Indicators (KPIs)

Company	Debt to Equity (x)	ROE (%)	ROCE (%)	Operating Profit Margin (%)	Net Profit Margin (%)
Hindustan Unilever Limited	0	30.58	22.54	22.44	23.38
Mahindra and Mahindra Limited	0.01	21.04	26.16	14.19	10.58
Coromandel International Limited	0.07	15.57	21.58	9.62	6.02
UPL Limited	0.64	5.53	11.06	12.90	4.65
PI Industries Limited	0.02	11.76	13.74	23.88	19.58
Escort Kubota Limited	0	19.34	14.22	15.66	20.74
Chambal Fertilisers and Chemicals Limited	0.10	18.76	20.73	11.81	8.77
Rallis India Limited	0	9	13.52	9.9	6.34
Kaveri Seed Company Limited	0	16.83	17	21.94	21.21
Jain Irrigation System Limited	0.69	-0.42	7.49	8.45	-0.50

Factors Affecting Best Monsoon Stocks

The key factor that affects the best monsoon stocks are as follows:

• Monsoon Forecast: This is one of the key factors that influences the performance of monsoon stocks. A regular monsoon across the country can help companies in producing crop production, etc.
• Government Policies: The government plays a key role in framing policies related to the agriculture industry. Favourable policies related to this sector can help companies in increasing their revenue.
• Prices of Commodities: The prices of agriculture-related commodities significantly influence the profitability of farmers. These commodities include rice, wheat, cotton, etc.

Benefits of Investing in Monsoon Stocks

The key benefits of investing in monsoon stocks are as follows:

• Strong Growth: The companies engaged in the agriculture sector can experience growth and sales during the monsoon season. Hence, one can invest in these stocks and earn profit.
• Diversification: By investing in monsoon stocks, one can diversify their investment portfolio. The monsoon stocks include companies engaged in fertilisers, agrochemicals, tractors, etc.
• Rural Consumption: As the rural income increases during the monsoon season, it also increases consumer spending across all the companies engaged in this sector.

Risk of Investing in Monsoon Stocks

The key risks of investing in monsoon stocks are as follows:

• Monsoon Pattern: The key risk of investing in monsoon-related stocks is that the monsoon pattern is very uncertain. Sometimes a delay in rainfall or below-normal rainfall can significantly impact the performance of such stocks.
• Ongoing Climate conditions: Changing climate patterns, the frequency of floods, droughts, etc. can create uncertainties for businesses
• Market Volatility: Even if the monsoon arrives on time, the performance of monsoon-related companies can vary based on market volatility. 

How to Invest in Monsoon Stocks

To invest in monsoon stocks, one can follow the steps mentioned below:

1. Open a Demat Account with Pocketful: To start investing in monsoon stocks, the first step is to open a lifetime free demat account with Pocketful.
2. Complete KYC: To activate your account, complete the KYC process by providing your PAN, Aadhaar, and bank details. Completing your KYC is a mandatory process.
3. Use Screener: To make investments in monsoon stocks, it is suggested to access the screener provided by Pocketful and view the monsoon stocks list. The data and filters available on the screener are easy to analyse and understand.
4. Choosing Stocks: Selection of stocks will be the next step after using the screener. The stock should be selected based on the company’s financials and its growth prospects.
5. Steps to Invest: Instead of investing your entire capital at once, it is advisable to invest it gradually. It can help an investor take advantage of various market levels.
6. Portfolio Tracking: Once the investments are made, it is advisable to track them regularly to book profits.

Should You Invest in Monsoon Stocks?

Investment in monsoon stocks is suitable only for those investors who can take risks, as monsoon stocks are highly volatile. These stocks also have high growth potential, especially when the rainfall forecast is favourable. However, an investor should focus on fundamentally strong stocks and diversify their portfolio.

Read Also: Best FMCG Stocks In India

Conclusion

On a concluding note, monsoon stocks offer an investment opportunity that can help an investor in getting the benefit of Indian agriculture economies rising disposable incomes in the hands of the rural sector. So many other factors can impact the performance of monsoon stocks, such as the financial performance of the company, government policies, prices of commodities, etc. Therefore, it is advisable to consult your investment advisor before making any investment in monsoon stocks. 

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