Caution required on agri stocks: Dipan Mehta

In a chat with ET Now, Dipan Mehta, Member, BSE and NSE, shares his views on the agri stocks.



ET Now: The agri theme has played out really well the last few days, the UPL results and Jain Irrigation in the last couple of days, we have seen the seed companies seeing rallies. Your take?



Dipan Mehta: They are benefiting from various reasons. UPL's performance was quite fantastic and again they are trying to right-size the company in terms of which are the productive assets and which are the unproductive assets. They are open to divestments as well, so that is a bit of on the positive side. They have very close look at their debt level so that also may benefit the company going forward. But I do not want to play on the agro theme till the uncertainty about the monsoon is not over and done with. No doubt long-term prospects for all agro companies is excellent given the kind of investment and the kind of challenges which Indian agriculture sector is facing but there are short term headwinds in terms of El Nino and drought situation and we have seen that whenever the monsoon is sub par, a lot of these agro chemical companies tend to take a dip so I would be a bit cautious on the sector as a whole and no doubt companies across the sector have come out with good set of numbers but that is more of the past where the climatic conditions favour these sector and these companies but going forward we need to be a bit cautious.