A subdued monsoon is a disappointment but it is unlikely to affect the rural economy, Sanjeev Prasad, Senior Executive Director & Co Head (Strategy) at Kotak Institutional Equities, told CNBC-TV18. The concerns are more in the non-agricultural segment of the rural economy such as construction and mining which have not been doing well in the past, he said. One good monsoon would not have changed the segment, he added.
Prasad said that two-wheeler companies may face inventory pile-up if festive demand does not pick up. Subdued festive demand will hurt two-wheeler firms, he said. Among the larger auto players, he said the brokerage is positive on Tata Motors and Maruti Suzuki .
Tata Motors is a good bet for medium-term and the benefits of Slovakia plant will reflect in the next 2-3 years, he said.
Prasad said a rate cut by Reserve Bank of India will depend on how inflation pans out near term. He expects a 25 basis point-rate cut in the next six months. Private banks and sone public sector majors like State Bank of India will benefit from lower rates, he added.
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