If agriculture production is efffected due to low rainfall, tractors will not be purchased, says Vinay Khattar

Vinay Khattar, Head Research (Individual Clients), Edelweiss Financial Services Limited

ET Now: What about some of the other businesses especially agro ancillary businesses, for example some of the tractor makers in auto companies is that of interest to you as well at this point?

Vinay Khattar: Our sense is that if the rainfall is quite low and that is significantly below its long period average and by that I mean 10% or below, you would see impact on the demand happening especially in the rural areas.

It is an important vector that we must remember that almost 50-53% of India’s population is dependent on agriculture in one way or the other and it is also very key determinant of rural demand. Now, if the rainfall is very low and the agriculture production is affected seriously, then the last ticket items like tractors and so on would not be purchased very aggressively.

Rural base demand whether that is on the auto ancillary side or agri ancillary side or auto side, it is going to be impacted negatively.