Jai Kisan cuts no ice

Promise to up farm investment fails to enthuse markets.

The sales pitch of the United Progressive Alliance (UPA) government to increase investments in the farm sector has not been able to impress the stockmarket.

Farm sector stocks, including tractors, seeds and pesticides stocks, have either registered losses in line with the broad market movement, or a marginal positive return in the past month, since the announcement of big-ticket rural sector reforms.

Market sources said the dynamics of farm stocks had little to do with the new government's policies and "all depends on individual company's performance."

Fertiliser stocks have shown a mixed trend after black Monday, May 17. The Basant Agro Tech India scrip is down 10 per cent to Rs 7.20, the EID Parry scrip is down nearly 1 per cent to Rs 179.50, Indo Gulf Fertilisers is down 1.56 per cent to Rs 91.50 and Mangalore Chemicals is down 4.5 per cent to Rs 5.71.

The few gainers in the May 18-June 25 period includes Bharat Fertiliser Industries, which gained 8.11 per cent to Rs 4.00.

The Chambal Fertilisers scrip gained 7.81 per cent to Rs 21.40, Deepak Fertilisers gained 6.10 per cent to Rs 34.79, GSFC gained 7.54 per cent to Rs 45.65, Hindustan Lever Chemicals gained 31 per cent to Rs 309.75 and Zuari Industries gained 3.44 per cent to Rs 37.54.

The Mahindra & Mahindra scrip has appreciated 8.54 per cent from Rs 401.70 on May 17 to Rs 436.00 on June 25, while the Punjab Tractors scrip has appreciated more than 9 per cent from Rs 185.00 to Rs 202.00 over the same period.

The lesser known VST Tillers Tractors has, in fact, gained more than 34 per cent from Rs 30.55 on May 17 to Rs 41.05 yesterday. But the Eicher scrip is down 0.39 per cent, Escorts is down 0.19 per cent, during the same period.

Sharad Shukla, head of investment advisory services at IL&FS Investmart said, "The Common Minimum Programme (CMP) is just a statement of intent. Investors want to see the policies implemented before they seriously start investing in agri-sector stocks. While the tractor stocks have performed well, it's more to do with the reversal in their earning cycle, which has turned favourable, and the declining inventory stock."