{"id":24958,"date":"2026-04-24T15:29:55","date_gmt":"2026-04-24T09:59:55","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=24958"},"modified":"2026-04-24T15:35:00","modified_gmt":"2026-04-24T10:05:00","slug":"el-nino-risk-92-monsoon-stock-impact","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/el-nino-risk-92-monsoon-stock-impact\/","title":{"rendered":"El Ni\u00f1o Puts 92% Monsoon at Risk \u2014 Stocks That Win and Lose"},"content":{"rendered":"

The India Meteorological Department<\/a> on April 13, 2026, forecast the southwest monsoon at 92% of the Long Period Average (LPA), the first below-normal reading since 2023, driven by the expected development of El Ni\u00f1o conditions between June and September, per IMD’s official press release. The LPA baseline is 87 centimetres (1971\u20132020 average), putting this year’s projected rainfall at approximately 800 mm with a model error of \u00b15%. The IMD puts the probability of a deficient monsoon (below 90% of LPA) at 35%, more than double the climatological norm of 16%. Private forecaster Skymet, in its April 7 forecast, put rainfall slightly higher at 94% of LPA but flagged August and September as especially vulnerable, with a 70% chance of below-normal rainfall in September alone. For equity markets, the split between winners and losers is already visible in analyst notes.<\/p>\n

WHY THIS EL NI\u00d1O IS MORE DANGEROUS THAN USUAL<\/h2>\n

The timing is what makes 2026 unusually risky. El Ni\u00f1o is not developing before the monsoon; it is developing during it, which historically produces worse outcomes. InCred Equities noted that the probability of a deficit shifts sharply when El Ni\u00f1o develops during the monsoon season rather than before it. Critically, in 9 of the 16 El Ni\u00f1o years between 1951 and 2023, India recorded very low monsoon rainfall, per IMD historical data cited by InCred, and every moderate or strong event in the dataset since 2000 produced an all-India deficit.<\/p>\n

Jefferies put the probability of El Ni\u00f1o causing a meaningful rainfall deficit at 60%, noting that historically such events have produced rainfall deficits of around 15% over the past 25 years. A partially offsetting factor: the Indian Ocean Dipole is expected to turn positive toward the end of the monsoon, a condition historically linked to better rainfall, and northern hemisphere snow cover from January to March 2026 was slightly below normal, which IMD noted has an inverse relationship with monsoon weakness. The IOD buffer, however, arrives late in the season, when kharif crops are already harvested or abandoned.<\/p>\n

Approximately 60% of India’s farmers depend entirely on the monsoon for kharif cultivation, per IMD. Kharif crops, rice, pulses, oilseeds, and cotton, are sown June to August and are overwhelmingly rainfed, making them the first casualty of a weak monsoon, per InCred. Downstream effects on food inflation typically materialise within one to two quarters of a deficit.<\/p>\n

STOCKS THAT BENEFIT: POWER AND COOLING<\/h2>\n

JM Financial<\/a> identified coal-fired power generators as direct beneficiaries of an El Ni\u00f1o year. Reduced hydro generation, which JM Financial explicitly flagged as negative for NHPC and SJVN, forces the grid to rely more heavily on thermal capacity, driving up merchant power prices and utilisation rates for NTPC and Adani Power. JM Financial also noted that El Ni\u00f1o years have historically seen an extension of Section-11 directions, emergency generation orders, which benefit thermal operators, including Tata Power’s Mundra plant.<\/p>\n

On the consumer side, Jefferies named Voltas, Blue Star, and Havells India as likely beneficiaries of a hotter, drier summer driving air conditioner and cooling equipment demand. The caveat: Voltas trades at a PE of 90\u2013126x and Blue Star at 70\u201390x, meaning earnings upgrades need to be substantial to justify current valuations. UltraTech Cement and Ambuja Cement are also flagged by Jefferies as secondary beneficiaries, drier conditions extend the construction working season, supporting volume growth with UltraTech carrying a market cap of approximately \u20b93.4\u20133.5 lakh crore.<\/p>\n

STOCKS AT RISK: RURAL DEMAND CHAIN<\/h2>\n

A deficient monsoon compresses rural incomes across the kharif belt, creating a sequential demand shock that runs from farm to showroom. Systematix Institutional Equities noted that a weak harvest typically leads to lower kharif sowing, reduced reservoir levels, weaker rabi prospects, and slower tractor sales within two quarters. Named stocks at risk include Mahindra and Mahindra, Escorts Kubota, and Ashok Leyland on the tractor and CV side, and Bajaj Auto and Hero MotoCorp on two-wheelers, all deriving a disproportionate share of domestic volumes from rural and semi-urban markets.<\/p>\n

For FMCG, InCred believes the volume growth impact will be limited given that GST rate cuts have reduced product prices by approximately 10% over the past two to three years, supporting rural purchasing power independently of the monsoon. Hindustan Unilever, however, remains exposed to the sentiment effect; any analyst downgrade of rural volume expectations typically reprices the stock before the actual data arrives.<\/p>\n

The current setup reflects market pricing for strong summer demand but does not fully discount a rural slowdown, creating an expectation gap that could trigger sharp sectoral rotation if monsoon weakness intensifies into August\u2013September.<\/p>\n

KEY DATES AND WHAT TO WATCH<\/h2>\n

The next IMD forecast update is due in the last week of May 2026. That second-stage forecast will carry significantly narrower error bands and will be the trigger for institutional repositioning across monsoon-linked stocks. Skymet’s data shows June tracking near normal at 101% LPA, supported by the current Madden-Julian Oscillation pulse, with deterioration concentrated in August and September. Systematix flags Mahindra and Mahindra and Hero MotoCorp as first movers to watch; both report Q1 FY27 rural volumes in late July, which will be the market’s first hard data point on monsoon-driven demand destruction.<\/p>\n

Also Read: Tata, Bajaj IPOs Erased Up to 60% From Peak as Brand Premium Fades<\/a><\/p>\n

FREQUENTLY ASKED QUESTIONS<\/h2>\n

Which stocks benefit from El Ni\u00f1o and a weak monsoon in India?<\/h3>\n

Power generators with high thermal capacity, NTPC, Adani Power, and JSW Energy, benefit from reduced hydro output and higher merchant prices, per JM Financial. Consumer durables companies including Voltas, Blue Star, and Havells benefit from higher AC demand during hotter summers. Cement companies UltraTech and Ambuja gain from extended construction seasons in drier conditions, per Jefferies.<\/p>\n

Which stocks are at risk from a below-normal monsoon in 2026?<\/h3>\n

Tractor makers Mahindra and Mahindra, Escorts Kubota, and Ashok Leyland and two-wheeler companies Bajaj Auto and Hero MotoCorp face rural demand compression, per Systematix Institutional Equities. NHPC and SJVN face hydro generation shortfalls directly, per JM Financial. Hindustan Unilever faces sentiment risk from rural volume downgrades.<\/p>\n

What did IMD forecast for the 2026 monsoon?<\/h3>\n

IMD, on April 13, 2026, forecasts 92% of LPA, approximately 800 mm, for the June to September southwest monsoon, the first below-normal forecast since 2023. The probability of a deficient monsoon (below 90% LPA) is 35%, more than double the long-term average of 16%. A second-stage updated forecast will be issued in the last week of May 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"

The India Meteorological Department on April 13, 2026, forecast the southwest monsoon at 92% of the Long Period Average (LPA), the first below-normal reading since 2023, driven by the expected development of El Ni\u00f1o conditions between June and September, per IMD’s official press release. The LPA baseline is 87 centimetres (1971\u20132020 average), putting this year’s […]<\/p>\n","protected":false},"author":11,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[],"ppma_author":[1523],"class_list":{"0":"post-24958","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":1523,"user_id":11,"is_guest":0,"slug":"nikki","display_name":"Nikki Lodha","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/ae2e265bd56e0e890c866fbaa55d29846ba20cc5372adf666652268816af117e?s=96&d=mm&r=g","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/24958","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=24958"}],"version-history":[{"count":4,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/24958\/revisions"}],"predecessor-version":[{"id":24964,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/24958\/revisions\/24964"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/24961"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=24958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=24958"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=24958"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=24958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}