Floods have affected Chennai, Kanchipuram (more rains than Chennai), Thiruvallur, Nagapattinam and Cuddalore districts in Tamilnadu and also in Pondicherry/Karaikal. North East monsoon season is not yet done with and maybe other districts are affected. For example, I’ve read reports that in cauvery delta (Tiruchi and Thanjavur Disctricts) samba paddy cultivation areas are inundated.
It remains to be seen if floods this will seriously affect Repco’s business. In medium-long term I think this would be a non event. Anyway we need to wait for the quaterly results to gauge any hit in the earnings of finance companies. Auto companies who have manufacturing base in Chennai are the ones who are affected and will post lower earnings for sure. Eicher Motors have already announced that they have lost production of 11,200 motorcycles and still as of today running in 50% capacity only.
Sundaram Finance who is a dominant lender (they also have a HFC arm) in Tamilnadu has taken a hit in the markets. They have announced special 8.5% loans for flood affect home renovations upto 10 lac. This is from the NHB’s 6.5% refinancing package. So there might be opportunity like this to gain market share or earn goodwill & trust.
Disc: Invested in Eicher Motors only from the businesses discussed.
| Subscribe To Our Free Newsletter |
