The world is divided into two categories of people, as Mark Twain once said. The first ones are people who have seen the Taj Mahal, a famous landmark. The second group consists of those who haven’t. In the same way, there are two different kinds of investors in the realm of investments: those who are aware of investment opportunities and those who are not.
Investors have possibilities on the stock market that promise large rewards. But first, you need be familiar with how a stock market operates. The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the two locations where the stock market is traded. The fact that there are no market makers involved in the deals is the finest part! Stop, stop, stop! Don’t yell out the scheme to everyone; instead, pay attention to Raju. We are anticipating additional financial guidance!
You may have read a variety of books and frequented the library, but there may be one genre in particular that you particularly appreciate, so you look forward to spending time reading books in that genre. Similar to how not all stocks come from the same sector, investors must know which sector to invest in. Automobiles, agriculture, textiles, and other industries are only a few of the divisions made up of the stock market.
The agriculture industry is starting to take the lead among these. Check out this excellent guide to Indian agricultural stocks now.
Factors to Consider Before Buying Agricultural Stocks in India
Because there is so much opportunity for further consumption, agriculture is a vital industry that is always expanding.
According to Jeremy Grantham, “Modern agriculture has been appropriately described as a method of converting oil into food. The cost of food will increase along with the price of oil. All investors should take advantage of the sector as a result. To achieve good profits, you must invest in the correct agricultural equities, though. Therefore, the following are some things to think about before investing in any agriculture-related listed company:
1. Assessing the range of products of the company
Investors need to be informed of the numerous product categories the company offers. The reason is that a business with a wide range of products has a better possibility of generating more sales.
For instance, the sales of the other products make up for a drop in the sales of one product. This results in a higher total profit for the business. As a result, this makes the business a good choice for investors.
2. Determining the location of the company
Before purchasing agricultural stocks in India, an investor should be aware of the company’s location. The rationale is because the sales of agricultural or associated businesses are impacted by the changing seasons. For instance, if a certain area experiences less rainfall, the yield is affected, which affects the sales of the company.
It is therefore vital to invest in businesses whose revenues are unaffected by poor harvests. On the other hand, a business that has operations in several cities and is present in a number of markets makes more money. For instance, if the company’s specific location has a decline in sales, they can expand their sales in other states.
3. Determining the financial strength of the agri stocks
Before purchasing Indian agricultural equities, investors should evaluate the company’s financial stability. It determines the company’s expansion and long-term viability. By looking at the company’s results, particularly during the off-season, investors can gauge its financial health.
Top 5 Agricultural Company Stocks
The comment attributed to Alan Autry, “High tech companies that focus on research, development, and production will learn that they can be the perfect complement to our world-famous agricultural heritage,” is accurate.
Agriculture businesses that are featured below are serving as testimony to the same. Let’s examine the top agricultural stocks in India now:
1. Kaveri Seeds Corporation Limited
The Indian business is a comprehensive supplier of numerous agricultural goods. Micronutrients, soil improvers, hybrid seeds, organic fungicides, etc. are the company’s main areas of interest. The following are some things to think about before buying Kaveri Corporation Limited’s agricultural stocks:
- Share price: 500.90
- Market capitalization: 2,921
- PE: 13.75
- ROE: 16.58 %
- Net sales: Rs. 969
2. Bombay Burmah Trading Corporation Limited
Among the most well-known corporate entities in India is Bombay Burmah Trading Corporation Limited. The business is involved in pepper, rubber, coffee, tea, and other plantations as well as plantation products.
Before buying shares of Bombay Burmah Trading Corporation Limited’s agricultural sector, you should take into account some of the following:
- Share price: 940.15
- Market Capitalisation: 6,559.61
- PE: 662.08
- ROE: 4.68%
- Net sales: Rs. 339
3. Goodricke Group Limited
In terms of tea production, Goodricke Group Limited is a pioneer. The business is a division of Camellia PLC UK, the world’s biggest tea producer in the private sector. Being a tea-producing company, Goodricke offers a wide variety of tea goods, ranging from bulk CTC tea to Orthodox tea.
Tea is handled differently when it is grown, manufactured, blended, sold, purchased, and traded. Before buying Goodricke Group Limited’s agri stocks, you should take the following into account:
- Share price: 243.45
- Market capitalization: 525.85
- PE: 99.77
- ROE: 1.63%
- Net sales: Rs. 823
4. JK Agri Genetics Limited
One of the pioneers in the Indian seed sector, JK Agri Genetics Limited has exhibited a remarkable dedication to the farming community.
The business develops, processes, manufactures, and conducts research on a variety of products, including castor, sorghum, wheat, cotton, pearl millet, paddy maize, tomato, sunflower, and others.
The following are some things to think about before investing in JK Agri Genetics Limited’s agricultural stocks:
- Share Price: 638.00
- Market capitalization: 295.84
- PE: 38.27
- ROE: 5.44%
- Net sales: Rs. 245
5. Agri Tech Private Limited
Somnath Farms Private Limited was the original name under which Agri Tech Private Limited was founded. Later, the business became a public limited corporation. The corporation is involved in the study, creation, and production of seeds.
The following are some things to think about before buying Agri Tech’s agricultural stocks:
- Share Price: 83.00
- Market capitalization: 49.30
- PE: 17.93
- ROE: 2.99%
- Net sales: none
Why are Agricultural Stocks so Popular?
“Agriculture has not cropped production, as popular belief holds,” as said by Allan Savoury, “it is the production of food and fiber from the world’s land and waters.” There cannot be a city, stock exchange, bank, university, church, or army without agriculture. Agriculture is the cornerstone of any civilized society and sound economy.
The development drivers in agriculture have the same vision and conviction. Following are some of the elements that contribute to the popularity of investing in this industry:
- 58% of India’s workforce depends on the sector for their living. In addition, it represents 17.8% of the total gross value added (GVA).
- India has dramatically increased the volume and diversity of its agricultural output. The expansion of numerous agrochemical industries has been influenced by this favorable trend.
- The agricultural sector is expanding as a result of two main factors: the population is expanding quickly and there is a constant need for economic expansion. As a result, India’s agricultural stocks have increased.
- Better yields have resulted from the use of “Kisan Drones” to promote the assessment of crops.
- The agriculture sector has benefited from the Central Government’s investment of Rs. 131,000 crores.
The Bottom Line
There are numerous investing options in the agricultural business. However, a thorough review of the financial data is required to determine the company’s actual net worth, which necessitates a close look at the profit and loss statement.
Finology has developed the ideal solution because it is quite time-consuming and labor-intensive. Ticker by Finology helps with real-time analysis of financial data.
It offers details on India’s agricultural stocks. It has a wealth of data to make stock analysis simple, like the return on assets, the PE ratio, the return on equity, and many more.
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