Shares of consumer, power and capital goods companies are likely to remain in focus after the India Meteorological Department (IMD) forecast a below-normal monsoon for 2026, while also warning of an intense summer marked by heatwaves and rising temperatures.
The IMD expects seasonal rainfall at 92% of the Long Period Average (LPA), indicating a weak monsoon. At the same time, heatwave alerts and strong winds across parts of India signal a prolonged and harsh summer, setting the stage for sector-specific winners and losers in the equity markets.
Power And Mining Stocks Seen As Key Beneficiaries
A hotter summer typically drives a surge in electricity consumption, boosting demand for thermal power and coal. Companies such as Adani Power, JSW Energy, Tata Power, NTPC and Coal India are expected to benefit from higher power demand and improved plant load factors.
Similarly, mining companies including NMDC and Vedanta could see improved output, as fewer rainy days typically allow for more productive mining operations, alongside increased coal demand.
Cooling Demand Lifts Consumer Durables
Rising temperatures are likely to boost sales of cooling products such as air-conditioners, air coolers and fans. Stocks like Voltas, Blue Star, Havells and Crompton Greaves Consumer Electricals are expected to witness strong seasonal demand tailwinds.
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Additionally, companies in the refrigerant chemicals space, such as SRF and Navin Fluorine, may benefit from higher consumption of gases used in cooling appliances.
Summer Consumption Trends Favour Beverages And Ice Creams
A strong summer is typically positive for beverage and ice cream makers. United Breweries and Varun Beverages are likely to see higher sales volumes, driven by increased demand for cold beverages.
Similarly, companies such as Zydus Wellness may benefit from seasonal demand for products like talcum powder, while ice cream and dairy players could also see a pickup in consumption.
Mixed Outlook For FMCG Majors
The impact on fast-moving consumer goods (FMCG) companies is more nuanced. While summer-driven categories may perform well, a weak monsoon could hurt rural demand, which forms a significant portion of revenues for many firms.
Companies like Dabur and ITC, which have exposure to beverages and summer products, may benefit partially. However, both derive a sizeable share of revenue from rural markets, making them vulnerable to weaker farm incomes.
Hindustan Unilever (HUL), along with peers such as Colgate, Marico and Britannia, could face demand headwinds, as rural consumption tends to slow in years of deficient rainfall.
Pressure On Autos And Agri-Linked Sectors
A below-normal monsoon is typically negative for rural-focused sectors. Tractor manufacturers like Mahindra & Mahindra and Escorts Kubota, as well as two-wheeler makers such as Hero MotoCorp, may see muted demand, as farm incomes and sentiment weaken.
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Fertiliser and agrochemical companies, including Coromandel International and Rallis India, could also face pressure due to lower sowing activity, which directly impacts demand for their products.
Cement And Pipes See Mixed Impact
The outlook for cement companies remains mixed. On one hand, fewer rainy days support construction activity, benefiting players such as UltraTech Cement and Dalmia Bharat. On the other, weaker rural incomes may dampen demand from the housing segment.
Pipe manufacturers like Finolex Industries and Supreme Industries may see improved offtake, as demand for agricultural pipes and pumps typically rises during summer months.
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