2025-05-29-Jefferies-季风是积极因素_但近期有小问题_11页_415kb

India Equity Strategy Summary

Monsoon Forecast and Impacts

• A strong monsoon is expected for FY2025-26, with 6% above-average rainfall, supporting agricultural GDP growth, rural demand, and inflation control.
• Early monsoon onset may adversely affect power and construction sectors in Q2-25 but is projected to rebound in Q3-25, with overall GDP outlook unchanged.

Inflation and Rural Economy

• Inflation has eased significantly, with food inflation dropping to 2% in April 2025, underpinning expectations for further interest rate cuts (totaling ~75bps).
• Rural indicators, such as currency circulation and wage growth, show improvement, indicating stronger informal economy activity. Rural CPI inflation has fallen sharply, benefiting consumer demand.

Sectoral Recommendations

• Underweight: Power due to reduced agricultural water demand, with adjustments in model portfolio.
• Overweight/Neutral: Banking, telecom, consumer staples, materials, and healthcare.
• Buy/Sell Recommendations: Prefers TVS Motors, Bharti Airtel, VMM, and GCPL for rural consumption. Adds Jindal Stainless and overweight materials/steel; trims JSW Energy exposure.

Overall Outlook

• Strategy focuses on BoP consumption plays, with moderate inflation support for growth and affordability. Short-term disruptions may occur, but long-term recovery is expected.