Jefferies expects above-average rainfall to aid rural demand, inflation outlook

Vishal Mega Mart

30/05/2025 09:27

** Higher-than-normal rainfall in India this year will be  positive for agricultural growth, rural demand and inflation outlook, but may weigh on energy, construction sectors, says Jefferies

** Power demand has already declined by 3.6% year-on-year in May so far after a muted 2% growth in April

** Jefferies shaves 1.5 percentage points of weight from power to metals in its India model portfolio

** Also cuts weight on JSW Energy JSWE.NS by 1.5 percentage points and adds Jindal Stainless into its portfolio

** Prefers TVS Motor Company TVSM.NS, Bharti Airtel BRTI.NS, Vishal Mega Mart VSSL.NS, and Godrej Consumer Products GOCP.NS as its preferred consumption-related plays in India

** While higher-than-normal rainfall may drag sectors like power in the near term, they will spur a revival in economic growth by the September quarter and help power fiscal 2026 growth, says Jefferies

** India's benchmark Nifty 50 .NSEI has gained ~5% for the year, and is eyeing a third straight monthly gain in May, helped by robust institutional flows, sequential improvement in corporate earnings

 (Reporting by Bharath Rajeswaran)

 ((bharath.rajeswaran@thomsonreuters.com ; +91 9769003463;))